Cobell Settlement Approved

Today we learned the $3.4 billion Cobell settlement has been approved by a  Federal court. The Cobell settlement involves individual Indian lands and funds that were held in trust for Native American tribes by the federal government. The Cobell lawsuit claimed that the federal government violated its duties by (a) mismanaging trust funds/assets, (b) improperly accounting for those funds, and (c) mismanaging trust land/assets. The trust funds in question include monies collected from farming and grazing leases, timber sales, mining, and oil and gas production by the government on Indian lands.

The Cobell settlement will affect 1 in 12 Native Americans.  Among other things, it attempts to erase the government’s obligation to pay tribal members a huge backlog of royalty payments. The Cobell settlement provides:

  • $1.9 billion to buy small interests in trust or restricted land owned by many people (aka fractionated lands, a problem created by federal Indian land allotments).
  • $1.5 billion to pay individual account holders eligible as Class members.
  • Up to $60 million for scholarships to improve Native access to higher education. (Most likely, this is earmarked for tribes with Cobell class members.)
  • A government promise to reform the Indian trust management and accounting system.

The court’s recent decision on Cobell can still be appealed, but the government is moving forward with the tribes on how to resolve the fractionated lands in Indian country. This is potentially good news for Indian country, as far as government to government relations going forward.

In cash, $1.5 billion sounds like a windfall. Sadly, individual Native Americans will receive only a mere pittance of what they are owed  — less than 1/10th of one percent because the federal government mismanaged $176 billion in Indian land use royalties.  The Cobell lawsuit was filed in 1996 to seek an accounting for these funds earned by the government’s use of natural resources on Indian land.  But in the course of the 15-year lawsuit, the U.S. government was unable to account for the funds, or the use of the funds, or why the royalties were not paid to the Indian people.

As a direct result, about 496,290 Indian people will split less than $1.5 billion — depending on what is left after attorneys fees and expenses. Each one stands to receive on average $1,000 to $1,800 each, when they should have received an average of about $355,000 each. Imagine what these funds could have done to help offset poverty on the reservations. We will have a lot more to say about this over the next few days.

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