Government Settles Indian Trust Fund Class-Action Suit
By Ryan J. Reilly | December 8, 2009 3:34 pm
Attorney General Eric Holder at a press conference announcing settlement in Cobell v. Salazar (photo by Ryan J. Reilly / Main Justice)

Attorney General Eric Holder, at a press conference announcing settlement in Cobell v. Salazar, is flanked by Deputy Interior Secretary David Hayes (left) and Interior Secretary Ken Salazar (right). (photo by Ryan J. Reilly / Main Justice).

Elousise Cobell (photo by Ryan J. Reilly / Main Justice)

Elouise Cobell (photo by Ryan J. Reilly / Main Justice).

Attorney General Eric Holder this morning announced a settlement totaling more than $3.4 billion in a long running class-action case — Cobell v. Salazar — in which the Interior Department was accused of  mishandling funds in Indian trust funds which belong to individual Native Americans.

It was one of the largest class actions ever filed against the U.S. government, said Holder. The lawsuit, originally filed in 1996, was brought by Elouise Cobell on behalf of more than 300,000 Native Americans holding individual Indian money accounts.

The settlement still must receive congressional approval, which Interior Secretary Ken Salazar said he hoped would happen by the end of the year. A court would also have to approve the settlement, which Salazar anticipated would happen over the next several months.

The $3.4 billion settlement includes $1.4 billion that will be distributed to class members to compensate them for their historic accounting claims and to resolve potential claims that prior U.S. officials mismanaged the administration of trust assets, according to the Justice Department.

The other $2 billion will go to establish a land consolidation program to provide individual Indians with an opportunity to obtain cash payments for divided land interests and free up the land for the benefit of tribal communities, the Justice Department said.

Holder said the U.S. has tried to settle this case many times, and indeed this settlement almost failed in the last moments. Both parties were able to come to an agreement late last night.

Of the $2 billion, the settlement authorizes the Interior Department to set aside up to 5 percent of the value of the land sold back to the government into a scholarship fund for Native American students.

With the scholarship fund, said Cobell, a member of the Blackfeet tribe in Montana, “the Indian people have something to look forward to for the future.”

“We’ve suffered too long in the government’s hands and now it’s time for change,” said Cobell.

“If it was me, I would fight on for another 100 years, I was not tired,” she said. “I wanted to continue to fight on, but the deciding factor was, I live in Indian country and I see every single day people dying without their money and you just can’t take it anymore.”

Holder said the settlement was significant move from the government, which up until this point had not agreed that it owed the plaintiffs any money.

“The United States could have continued to litigate this case, at great expense to the taxpayers. It could have let all of these claims linger, and could even have let the problem of fractionated land continue to grow with each generation,” said Holder. “But with this settlement, we are erasing these past liabilities and getting on track to eliminate them going forward.

Holder thanked her for her willingness to compromise, said Cobell.

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