Attorney: Indian trust debacle bigger than Enron

Thursday, August 22nd 2002, 12:00 am
By: News On 6

MIAMI, Okla. (AP) _ Government corruption in the handling of American Indian trust money is a scandal bigger than the Enron debacle, an attorney told members of two Oklahoma Indian tribes Wednesday.

``It's the biggest cover-up and corruption scandal this country has ever seen,'' said Dennis Gingold, an attorney for Elouise Cobell who represents about 500,000 Indians in a class-action lawsuit against the U.S. Interior Department.

Cobell and four other Indians filed a lawsuit in 1996 claiming the Interior Department mishandled the Individual Indian Money trust fund, which collects and distributes royalties to tribal members.

About $137 billion is still unaccounted for, according to documents filed by Cobell's attorneys.

Cobell, of Browning, Mont., told members of the Quapaw and Miami tribes that she sought accountability after authorities told her there was no money in her account.

Among other defendants, the lawsuit names Neal McCaleb, the Interior Department's assistant secretary for Indian Affairs. McCaleb, a former Oklahoma transportation secretary, was named last year to head the Bureau of Indian Affairs.

The lawsuit was filed before he took office and originally named his predecessor.

In 1999, U.S. District Judge Royce C. Lamberth ordered the Interior Department to account for all funds _ dating back to when the trust began in 1887 _ and to fix the system.

The lawsuit seeks a full and accurate accounting of all trust funds and a correction of account balances in conformity with that accounting, according to plaintiffs. It also seeks to reform the broken Indian trust management system.

Gingold said anyone with computer knowledge could tap into the accounts and steal the money.

After the report was issued, the Individual Indian Management database was removed from the Internet. The Interior Department was ordered to issue checks, but Interior Secretary Gale Norton admitted it took nearly two months to start issuing checks to account holders.

In October, Lamberth ordered Norton and McCaleb to face contempt charges and said after the trial he would consider appointing a receiver.

Lamberth ordered the trial after his appointed monitor found numerous problems with steps the Interior Department was taking to reconcile the accounts and with their honesty about reporting setbacks.

Lamberth has yet to rule on whether Norton or McCaleb are guilty of contempt for not moving quickly to resolve account balances.

Norton and McCaleb never started the accounting process for Indian funds as ordered by the court, the plaintiffs claim.

Lamberth also found the department was not protecting the security of the accounts.