Congress presses for potential multibillion-dollar settlement of Indian trust fund suit

WASHINGTON - Congress is urging the Clinton administration to settle a lawsuit over mismanagement of trust accounts for about 500,000 American Indians - a case that could cost the federal government billions.

The Indians sued in 1996 over ongoing problems with the system that handles about $500 million a year in proceeds from oil wells and other uses of the Indians' land. The federal judge handling the case has called the mismanagement ''government irresponsibility in its purest form'' and held two cabinet secretaries in contempt of court for destroying and refusing to hand over documents.

The instructions accompanying the 2001 Interior Department budget said lawmakers believe problems with the accounts would be ''best worked out through a negotiation and settlement process.'' The tens of millions of dollars spent on the lawsuit would be better spent reforming the trust system, said Chris Changery, spokesman for Senate Indian Affairs Committee Chairman Ben Nighthorse Campbell, R-Colo.

''It's like sending bad money after bad,'' Changery said.

Officials on both sides of the often nasty legal fight say they welcomed the prodding toward a settlement. They say that although talks are continuing - both sides met this week as part of that process - a resolution is unlikely anytime soon.

''I think that with the right mindset from the (government) defendants, there is the opportunity to settle this case before the end of the Clinton administration,'' said Keith Harper, a Cherokee who is one of the Indians' lawyers.

Kevin Gover, who heads the Interior Department's Bureau of Indian Affairs, said officials would love to have a settlement by then, but ''obviously every day that passes makes that a little tougher.''

''We don't want to leave this for the next guys to deal with,'' said Gover, a Pawnee Indian who is also a lawyer. ''My concern is no new administration is going to come in ... and be prepared to make decisions worth hundreds of millions or billions of dollars in its first months in office.''

The government plans to spend $27.6 million this year on the lawsuit and more than $80 million more on related programs to clean up mismanagement of the accounts. Lawyers for the Indians have said they believe the government owes their clients more than $10 billion.

Both Gover and the Indians' lawyers said the Justice Department lawyers defending the government have balked at settlement. Both said they hoped the pressure from Congress would help change that.

''To the extent that we have people in our department who don't really want to settle, Congress is telling them to knock it off and get on with it,'' Gover said. ''The same may be true at the Justice Department, where there's always an element saying, 'Let's tough it out.'''

Justice Department spokeswoman Christine Romano said the department's lawyers would not comment on specifics of the settlement negotiations.

''The Justice Department would like to resolve this important case through a settlement approved by all parties,'' Romano said.

Dennis Gingold, another lawyer for the Indians, said he doubted that congressional pressure would force any shift. He said a congressional suggestion was unlikely to carry more weight than the contempt citation and string of rulings against the government by U.S. District Judge Royce Lamberth.

''This case should have been settled a long time ago,'' Gingold said. ''It could have been settled several times, but it was blocked by Justice.''

The trust accounts came from an 1887 federal law that divided some reservation land into smaller plots for individual Indians. The federal government holds that land in trust for the Indians - meaning it cannot be taxed or sold and the government must approve any leases.

Many of the tracts are leased for uses such as grazing, logging, mining or oil drilling. Proceeds from those leases are supposed to be deposited in government accounts and then paid to the Indian landholders.

Since the beginning, however, those accounts have been mismanaged in almost every way imaginable, the government acknowledges. Records for many accounts were never kept, while documentation for others was lost or destroyed. Some of the money was stolen or used for other federal programs. Some lease proceeds were never collected. Thousands of the accounts have money in them but no names attached.

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On the Net:

Bureau of Indian Affairs: http://www.doi.gov/bureau-indian-affairs.html

Indian account holders' site: http://www.indiantrust.org/