A trust misplaced

July 08, 2002

IT'S A SCANDAL that predates Enron, Tyco International and WorldCom: Boxes of records have been destroyed, and the fate of the documents covered up. A whistleblower needed protecting. The accounts of about 300,000 people are at stake. And the potential financial fallout could exceed $20 billion.

It sounds like the latest example of corporate corruption, but this scandal is a case of colossal bureaucratic bungling. Malfeasance isn't the problem; mismanagement is.

At issue is the Department of Interior's shockingly lax management of 56 million acres of Indian land and the royalties paid to individual Native Americans or Indian tribes for use of the land. It is the subject of a 5-year-old court case in Washington and of proposed federal legislation to establish a new system of overseeing the 115-year-old Indian Trust Fund, of which the federal government is supposed to be trustee.

In 1999, a federal judge ruled that the department had violated its trust and unreasonably delayed reform of the problem-plagued system. And just last month, government lawyers tried to have removed a court monitor who has cited the Interior Department for repeated failures on trust reforms.

The trust fund is in such disarray -- and has been for decades -- that federal officials can't properly account for individuals' money. There is no centralized bookkeeping system. The department writes checks on an account it can't balance or reconcile. It can't verify that payments to accounts coincide with lease obligations. Even the investment of trust fund dollars has been questioned.

And yet one interior secretary after another, Democrat and Republican alike, has insisted he can reform the system and manage it. Whom are they kidding?

A 1992 congressional report aptly titled "Misplaced Trust" documented decades of wrongdoing. A special trustee brought in after that report also found fault with the Interior Department; agency employees have conceded the system is broken. If there have been improvements, the depth of the problems overshadows them.

This relationship has been troubled from its start in 1887, when the United States government wrested control of Indian lands from Native American tribes, set aside parcels for individuals and then held the acreage in trust for them. Government custodians have been reneging on their fiduciary responsibility ever since.

This is not just about balancing the books, but about righting a wrong done to some of the nation's most underprivileged and disenfranchised citizens. And it's well past time the government put the matter in professional, competent -- and neutral -- hands. This Congress has an opportunity to do just that. A Senate committee is expected to hear testimony July 30 on a proposal to create a government oversight commission that would set management standards for the trust, ensure adequate financing to reform the system and regulate the trustee's operations, a panel that could issue orders with which the interior secretary must comply.

With Wall Street still reeling from its corporate scandals, President Bush has singled out executives who violated the public trust, vowing to prosecute those at fault. The trust of 300,000 Native Americans has been violated, too. The management of the Indian Trust Fund deserves the same force of action.

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