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Cobell v. Norton, ‘A window on the balance of power in Washington’

ASK THIS | December 16, 2005

D.C. attorney Lee Helfrich writes: “Cobell …has included several instances of overt deception, intentional and negligent destruction of records, and efforts to mute truthful testimony. Any District of Columbia litigator would know better than to try this stuff with Lamberth on the bench.”

By Lee Helfrich

For Interior, the Question is ‘Why?’:

Q. Why is the Interior Department litigating so hard to dilute its responsibilities to Indians?

Q. Why is Interior hiding the full extent of its historic neglect and disregard of its Trust obligations from the courts, Congress, the public and the Indians themselves?

Q. Why is Interior putting its own institutional and industry’s interests above those to whom it owes the highest duty known to law?

Q. Why is Interior refusing to acknowledge that its conflicting priorities disable it from meeting its Trust duties? Why is it refusing to entertain settlement?

Q. Why is Interior even fighting so hard to retain control over Indian issues?

“The entire record in this case tells the dreary story of Interior’s degenerate tenure as Trustee-Delegate for the Indian trust – a story shot through with bureaucratic blunders, flubs, goofs and foul-ups, and peppered with scandals, deception, dirty tricks and outright villainy – the end of which is nowhere in sight.”

This is how United States District Judge Royce Lamberth described the “modern day” Interior Department in a decision issued last July. Lamberth is the trial judge in the Indian Trust Fund case, Cobell v. Norton, which involves a class action suit for an accounting of the funds that Interior ostensibly has been collecting and distributing to Indians. 

The case was brought in 1996 by Eloise Cobell on behalf of individual Indian landowners, whose property is managed in Trust by Interior. Cobell, a member of the Blackfeet Tribe, is also a successful private banker. Her concern was triggered when many of her clients raised questions about why they hadn’t been receiving more income from the private development of their lands, which Interior was supposed to be managing.

Nine years and running, Cobell is Dickens’ Bleak House, with myriad subplots and intrigues. Cabinet Secretaries have been held in contempt, documents have mysteriously disappeared from the National Archives, hackers have infiltrated NASA from Interior computers.         

The Interior Department grouses so much about Lamberth’s descriptions of its actions inside and outside the courtroom, that this past August it filed an unusual and improper motion with the U.S. Court of Appeals seeking to kick him off the case for bias. The appellate court refused to  consider Interior’s request until sometime next spring. Whatever that result, actions still speak louder than words. Under this adage, Interior’s antics are hardly deserving of judicial praise. The adage applies equally to judicial actions. Contrary to Interior’s suggestions, Lamberth’s ire has not uniformly resulted in benefits to the Cobell plaintiffs.

Cobell doesn’t involve simply hardball litigation, it has included several instances of overt deception, intentional and negligent destruction of records, and efforts to mute truthful testimony. Any District of Columbia litigator would know better than to try this stuff with Lamberth on the bench, as recent Associated Press and Washington Post articles suggest. In fact, it’s inappropriate in any court case. Generally speaking, false statements to a court and dishonesty or deceit are ethical violations, at least for lawyers.

For a Trustee, which Interior is, to knock on that door understandably bothers the judge. Trustees owe an absolute duty of loyalty and honesty to their beneficiaries. Interior’s conduct in the courtroom is not balanced by its efforts in dealing with the Trust Fund mess. Fixing 100-plus years of neglect is no doubt difficult, especially with limited funding, but so far Interior has opted for the easier repairs, the meager results of which it uses to dismiss its critics.             

[Editor’s note: NiemanWatchdog.org ran two earlier pieces on the Cobell case, one by Bill McAllister, a former Washington Post reporter and Indian affairs activist, and a response to that piece, by Ross Swimmer of Interior.]

For a court case, Cobell has received a good deal of objective and fair coverage. But in the main, reporters have focused on the food fights, with the Indian plaintiffs arguing perfidy, Interior claiming progress and the media reporting both sides. It is of course difficult to get underneath a case that has lingered for nearly a decade and involves thousands of pages of decisions, orders, transcripts and exhibits.

Unfortunately, what the reporting has missed is that Cobell is symptomatic of larger problems in our checks and balances government. While Cobell is unique because it involves Indian affairs, it is a window on the skewed balance of power in the Nation’s Capitol.

Lamberth understands this, but his red flags have been ignored and, in some respects, overwhelmed by his way with words. To the extent he is biased, it is in favor of his institution. To the extent he is frustrated, it is because he is recognizing that the “co-equal” judicial branch is simply out-gunned by entrenched Executive Branch bureaucracies.

For Interior, the question to ask is “why?”  Why is it litigating so hard to dilute its responsibilities to Indians? Why is it hiding the full extent of its historic neglect and disregard of its Trust obligations from the courts, Congress, the public and the Indians themselves? Why is it trying to minimize its damage to Indian interests? Why is Interior putting its own institutional and industry’s interests above those to whom it owes the highest duty known to law? Why is Interior refusing to acknowledge that its conflicting priorities disable it from meeting its Trust duties? Why is it refusing to entertain settlement? Why is it even fighting so hard to retain control over Indian issues?

One answer lies in the nature of the Interior beast. Interior is not in the business of providing public, let alone, civil service. Instead, it is one big Public Relations firm. The courts have already held that Interior breached its duty to the Indian plaintiffs. Since then, Interior’s “reform” efforts have been cosmetic attempts to shore up its public image and avoid the continuing embarrassment of incompetence, coupled with corporate favoritism. Indians are once again being swept under Interior’s rug.

The Court of Appeals has been friendlier to Interior than to Lamberth – at least recently. Earlier, in 2001, that court held that, because of the “decades-old” problems at Interior, Lamberth had broad equitable authority comparable to that imposed in cases such as Brown vs. Board of Education. In other words, Lamberth could order structural reforms of Interior’s trust system, just as courts in the past ordered busing in racist school districts.  As the appellate court said then: “The [Interior] Secretary cannot now try to escape her role as trustee by donning the mantle of administrator to claim that courts must defer to her expertise and delegated authority.”

In nearly every filing made to the appellate court since 2001, Interior has battled against the comparison to segregated schools, deplorable mental institutions and cruel and unusual prisons. In some, it has even refused to acknowledge that court’s references to decisions like Brown. Interior’s consistent position has been that the courts should afford substantial deference to its choices, despite its history of bad judgments. Deference means balancing conflicting interests; it leaves room for politics to dictate results; it is, in short, lots of wiggle room. In a courtroom, it means not looking under the bureaucratic rug; something Interior would obviously prefer. What deference does not mean is loyalty to serving the best interests of Trust beneficiaries.

That was then. Four years later, in November 2005, the Court of Appeals said that Interior’s “subject matter expertise” and its “judgment” on the “allocation of scarce resources” are “classic reasons for deference to administrators.”

Scratching your head? 

The notion that Interior somehow developed “expertise” on its Trust obligations in three or four years is hard to swallow. What expertise or judgment was exercised when an Interior accountant created and back-dated documents to make it appear that an audit of an Indian lease had been completed, when it was not? While Interior officials dismiss this episode as aberrational, they gave the accountant a “creativity” bonus. Apparently, aberrational acts are promoted at Interior. Why use “scarce resources” to do “expert” work, when emulating Enron is so much easier and cheaper? 

This example does not stand alone. There is other evidence that Interior’s modus operandi is to “get ‘er done”, which does not include “getting it right” or even “following the rules”, and there is also evidence that Interior experts with some modicum of professional integrity don’t get to stick around long.

Interior says and does what is convenient to beating the Indian plaintiffs in Cobell.  Interior’s guru for this is Associate Deputy Secretary James Cason. When Interior needed a quick affidavit to challenge Lamberth’s 2001 order shutting down its computers, Cason came through with a vow to the Court of Appeals that computer security was “bulletproof”. The appellate court sent the issue back to Lamberth, in part, to evaluate the credibility of Cason’s statement.

A 59-day trial demonstrated that Cason’s “expertise” is in making incredible overstatements. The General Accountability Office found Interior’s computer system deficient in every material evaluation category. On the report card of Interior’s Inspector General (IG), Interior received an “F.” Interior’s former department-wide IT manager said it deserved a “G” because the system was simply “broken”.  Apparently, computer security is such a sieve that a high-schooler could hack in, get Cason’s credit card number and  do some EBay shopping, in addition to finding out everything he’d want to know about NASA’s astronauts. As one private consultant opined, Interior’s computer system is “crunchy on the outside, creamy in the middle.”

After the trial, Secretary Gale Norton wrote to the Office of Management and Budget dismissing all this as a simple difference in perspective on Interior’s computer systems and, of course, blamed Lamberth and the Cobell case for diverting Interior away from its job. If it had been doing its job and if it had not been falsifying certifications of compliance with federal law, maybe the evidence would have been different. Norton is looking for a blessing from OMB, which, of course, might be useful in Interior’s challenge to Lamberth’s latest shut-down order. Any more reliance on Cason’s word is probably inadvisable.

Keeping things “crunchy on the outside” is Interior’s major mission and this isn’t unique to Cobell. According to a recent IG report, Interior employees view their Number One priority as maintaining the image and reputation of their agencies. Interestingly, this priority wasn’t coupled with protecting the public, let alone protecting Indian, interests – those came in dead last. What is unique to Cobell is the extent that Interior’s creamy center is being exposed.

The Court of Appeals’ recent back-pedaling could be questioned. Logically, if not legally, deferring to an agency’s judgment is inseparable from its institutional credibility. If you can’t trust its word, how can you trust its judgment?  Deferring to expertise suggests an agency with priorities other than insulating itself from criticism through self laudatory releases. 

Still there was a degree of practical realism in the appellate court’s conclusion. The Lamberth order that the appellate court vacated in November involved Interior’s “historical accounting” efforts. Lamberth’s order required Interior to conduct an historical accounting of funds back to 1887, the date when the Bureau of Indian Affairs assumed Trust responsibility. There are some 200,000 to 500,000 people impacted by the Cobell case; no one knows for sure, including Interior, the expert. The Court of Appeals focused only on the cost of undertaking such an accounting effort, but, even with limitless funds, the fact is Interior just can’t do it. Too many records have been lost or destroyed by Interior both before and during the litigation.

There is, however, a more serious problem with any effort to do an “historical accounting” – it won’t come close to estimating what the Indian plaintiffs are owed as a result of Interior’s 100-plus years of Trust mismanagement. And this, despite Interior’s claims that Lamberth is prejudiced against it, is a direct result of his faithful, conservative and a tad crabbed application of the law over the strenuous protests of the Indian plaintiffs.

Coincidentally (of course) with the appellate court’s November decision, Interior released a glossy pamphlet, with pretty pictures, extolling its version of an historical accounting of Indian funds. Based on its results, Norton concluded that there is “no evidence of fraud or widespread systemic error” in Interior’s trust management and “the few errors that have been found are generally small in monetary value.” [Here is a link to both Interior’s report and Indian response.]

As far as Interior’s own “historical accounting” goes, Norton may be right, but she ignores a lot. The scope of Interior’s effort involved only a sampling of Indian accounts extending back to 1985. It was not until 1983, however, that Congress mandated that Interior even start keeping books on the revenues paid by private developers on both federal public and Indian lands. Under that same law, Congress also required Interior to begin regular audits of monies owed. The impetus for this law was the “widespread systemic error” in Interior’s accounting for the revenues it was supposed to be collecting. While Interior’s compliance with the 1983 law has been far from flawless, one might expect fewer egregious errors in the post-1985 period. Viewing the debt to Indians as a loaf of bread, this is the heel.

What is also ignored is the nature of an “historical accounting”, as that terminology has been used in the Cobell case. All that is being required of Interior, is in layman’s terms, “check book balancing,” i.e., what was received, what was disbursed, did that amount clear, do all these amounts match up? The media have been assuming that an “historical accounting” would determine what the Indian plaintiffs are owed. Interior has been playing to this assumption with its tales of miniscule $60 errors and its complaints about judicial over-reaching by Lamberth; it wants to convey that little is wrong, it is being victimized, and that the suit is much ado about pocket change.

The assumption is wrong.

The problem with an “historical accounting” is that it looks only at the surface – at the crust of Interior’s moldy bread. The real issue – in terms of dollars – is not merely whether Interior accurately recorded that it received $500, it is whether it should have been collecting $1,000. In bemoaning Lamberth’s prose, Interior refuses to acknowledge – and the press has not reported – his decision in February 2005 taking these vastly more important “mismanagement” issues off the courtroom table.

That decision resulted from the Indian plaintiff’s request to depose Anson Baker, Interior’s “chief appraiser” in Navajo country. In 2004, another Interior employee – who was promptly reprimanded by her bosses – revealed, publicly, that Baker was leasing Indian lands for use by private companies for a fraction of what those companies were paying private landowners in the same area. Baker was not independently appraising the value of the Indian land, something courts require of Trustees. Instead, Baker used his “expertise” to simply rely on company offers.

Interior supports Baker. It has said that, in its “judgment”, accepting less than the market price was acceptable because, otherwise, the companies might not lease Indian lands; presumably companies would rather pay the higher market value to non-Indian neighbors. Interior has also said that these transactions don’t occur without Indian consent. Yet, it would obtain that by urging Indians to sign blank consent forms. 

Is it possible that Baker had some analysis that Indian land is inherently inferior to non-Indian land? Unfortunately, he destroyed all his records, despite a court order requiring the preservation of all Indian Trust documents.

Picking on Anson Baker may be unfair – he is only the “poster child” of the ingrained political and bureaucratic culture at Interior. Interior has always put the interests of oil and gas companies, the timber industries, other private developers and even billboards over the interests of Indians. A Clinton official once explained that it is difficult to turn a big old ship around, but it is useful to pull up the anchor. The anchor has been firmly embedded by the current Administration and its friends on Capitol Hill.

The mismanagement of Indian lands – and in fact all public lands – is a key theme of Interior’s “decades-long” neglect.  In a series of reports stretching back to, at least, the early 1950s through the early 1980s, the General Accounting Office [now the General Accountability Office] found that Interior consistently accepted, without question, anything that oil companies and other private developers chose to pay. Many chose to pay nothing. A lot of dollars owed remained in industry’s pockets. In fact, some oil remained in their pockets too – there was also evidence of theft from Indian lands. The amount lost has never been determined or even estimated because, well, Interior couldn’t do it; actually it never even tried. 

At one point Norton testified in Lamberth’s courtroom that she knew little about accounting and collecting revenues. Yet it is hard to believe her memory lapse about both GAO’s and Congress’s findings about theft, fraud and Interior’s “honor system” of revenue collection. After all, Norton was an attorney at Interior under Secretary James Watt. It was Watt, albeit under pressure, who formed the “blue ribbon” commission to review Interior’s collection of revenues owed from leasing Indian and federal lands. This was not only big news at the time but it still is: Interior is often reminded of it by Tribal and State governments.

But assuming Norton is secluded in her expansive and decorous Interior office, even high school history books contained the obligatory paragraph on Teapot Dome. None of this has made it into the Cobell courtroom. Maybe Norton feels entitled to ignore all of the history of Interior’s neglect because so far the courts in Cobell have freed her from the worst of it.

Granted, Interior’s collection system improved after the “blue ribbon” report and some prodding by Congress. It is unlikely, however, that this resulted in collecting what was fully owed to the Indian plaintiffs in the Cobell litigation. As far as the continuing income due from leasing of Indian lands, the favoritism to corporate America continued for several years through the issuance of “Rube Goldberg” regulations that were little more than a complicated “honor system”; the mantra being that it was simply fair to provide “certainty” to industry. Audits were hampered because of odd “informal” policies like the hesitancy to issue subpoenas to uncooperative companies because that might make them uncooperative.

None of these “improvements”, however, addressed the “Anson Baker” type of problems. Each would be difficult to challenge in a run-of-the-mill lawsuit against a federal agency because they are “classic reasons for deference to administrators.”

Under Norton, it hasn’t gotten any better. The current Administration is hardly noted for playing hardball with private industry. A few examples:

  • Although the Clinton Administration took a few steps to introduce some market reality to Interior’s regulations for federal oil lands, which increased revenues, these regulations were never applied to Indian lands despite repeated public promises that changing the Indian rules was a “priority” because of the Trust obligation. Instead, the current Interior has delayed new Indian oil rules – five years and counting – in order to tinker with adding some new deductions for the companies, which of course reduce revenues.
  • Interior has tried to issue “policies” waiving the industry’s liability for overdue royalties on both Indian and federal lands. So far, some of these efforts have been thwarted only because of the outcry from Tribal and State governments. It is only happenstance that the companies that would receive the most benefit are former clients of former Interior Deputy Secretary Steve Griles and former Assistant Secretary Rebecca Watson. At least Watson was “recused.”
  • Interior is no longer conducting routine audits of mineral leases; companies have long complained about the burden of audits. Now, Interior prefers “compliance reviews”, which are essentially desk top reviews of the information on the forms that companies submit to support their payments. These “compliance reviews” are a bit grander than “check book balancing”; if the stuff on the forms looks funky, Interior will call the company for an explanation of the discrepancy. Don’t bother looking for any statistics on the success of “compliance reviews”, Interior stopped publishing collection stats in 2001 right around the time this new approach was put in place. Oddly, it touts its new approach to Congress by citing the statistics relating to its old audit program.

Interior is a Trustee for the Indian plaintiffs in Cobell. A Trustee cannot wear two hats. Rather, because it owes an absolute duty of loyalty and honesty to its beneficiaries, it is required to manage Trust assets to obtain the greatest financial return for them. This, plainly and simply, precludes balancing the interests of private developers against the interests of Indians. If there are alternatives, the Trustee is duty bound to choose the one that is in the best interests of its beneficiaries. Interior will not meet this obligation so long as it is beholden to corporations that it views as its “clients” and “partners.”

As long as politics and institutional egotism influence bureaucratic choices, Interior will never meet its obligations to Indians, whether for the past or the future. It was politics that led to the problems of which the Cobell plaintiffs now complain. Back then, in the late 1880s, it was the politics of dealing with the “Indian problem.” The offspring of those who crossed the Atlantic for cultural freedom thought it best that the Indians abandon theirs and assimilate. 

As a result, the ancestors of the Cobell plaintiffs were ousted from possession of vast acreage, which was then made available for the “Westward Ho” of Anglo-American development. The Indians were given the equivalent of forty acres and a mule and the disrespect associated with the assumption that they couldn’t manage even that. Assimilation didn’t mean equality; it meant second class citizenship and the power of making them permanently dependent on a hopelessly conflicted and uncaring government agency. 

Today the politics is not all that different. The corporate hold on Administrations and Congress is old hat. The voice of wealthy contributors and lobbyists with access overwhelms those who cannot compete inside the Beltway. Passing out lucrative defense contracts and corporate subsidies is simply more important than providing reparations to Indians. This is nothing less than official discrimination. In the political world, the distinctions between ethnic and economic inequality are two sides of a slim coin. See Katrina and the President’s vacuous “war on poverty,” or was that a “war on the poor”?  At least the pundits have noticed that the hurricane victims, mostly poor and African-American, are starting to be forgotten in Washington.

The Cobell case is not about wealthy gaming Tribes or even the land held by less wealthy reservations; it is about a smaller subset of individual Indians, some impoverished, living on plots in a checkerboard of privately held acreage. They can’t even contemplate affording a Jack Abramoff to wave their tattered flags.

Sure, Interior might have made some progress on reforming some of the surface problems in its Trust management. Sure, its reforms are compatible with what both Lamberth and the Court of Appeals currently say has to be done to resolve the Cobell lawsuit. Yet Interior knows that this is not enough; Interior knows that its history of disregard and corporate favoritism damaged the Indians far more than a few misplaced checks or decimal points. Despite its obligations, Interior continues to refuse to be the voice for its beneficiaries. It would rather deny, demean, retaliate and obfuscate.

Where Interior excels is in reorganizing itself, opening new offices, changing the acronyms and then continuing as usual under these new auspices. Take for example the Office of Special Trustee (OST), which was opened after the GAO and Congress started looking into its Trust management in the late 1980s and early 1990s. OST had no real authority other than providing advice. When Interior didn’t like OST’s advice, the officials were relocated or replaced.

If Lamberth is angry at Interior, he has good grounds to be. However, what the appellate court once dismissed as Lamberth’s “sound and fury” has not resulted in partial rulings. In fact, it was Lamberth’s largely unnoticed February 2005 order that separated the historical accounting from the larger “mismanagement” issues. He held that the latter were not part of the Cobell litigation. A truly one-sided jurist would have taken the “bulletproof” opportunity last February to advance the Indians’ cause. The only issue before him involved a mundane discovery dispute – whether the Indian plaintiffs could ask questions of Anson Banker about his appraisal activities. Interior should be high-fiving Lamberth, not condemning him. He shares responsibility for taking New York from the Indians and leaving them with beads.

Now, the Cobell plaintiffs will need to file new class claims to collect anything more than wampum. 

That is, unless Congress gets into the act. Both Senator John McCain (R. Ariz.) and Representative Richard Pombo (R. Ca.) have introduced legislation that would preclude Indians from acting collectively by filing class actions. Instead each Indian will be left alone to seek relief from the federal government – no level playing field for them. The bills only mandate that the government consider the money that actually “passed through” an individual Indian account in paying on a claim, not what Interior left uncollected for a century because of its “honor system.”

What these bills also overlook is that, despite the litigation, many of these people still do not know that their rights have been violated or how and why. Interior is still litigating a Lamberth order that would require them to be notified. The Congressional Record and the Federal Register rarely land on individual doorsteps. Reality is a two-way street; these bills reduce the power of the already politically powerless.

Last July, Lamberth also opined: “Alas, our ‘modern’ Interior Department has time and again demonstrated that it is a dinosaur – the morally and culturally oblivious hand-me-down of a disgracefully racist and imperialist government that should have been buried a century ago, the last pathetic outpost of the indifference and anglocentrism we thought we had left behind.”



Following this trail....
Posted by Regina Cappelletti -
03/13/2006, 05:46 PM


I too feel as the last writer. I was raised by an Army-man right after WWII. I believe in my Dad's America. And cannot explain the lack of OUTRAGE by my fellow citizens. Let us 'do it right' and get on to improving life for all of us.

The outrageous is in print, right in front of us! On many subjects! Yet I fear I will die of old-age before this charade plays-out! What is the government's point?! Besides wasting time and money?! Too sad..

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