American Indian Land Trust Lawsuit Settled

Last Updated 11:54 a.m. ET

The Obama administration says it is settling a long-running and contentious lawsuit over royalties owed to American Indians.

Under an agreement announced Tuesday, the Interior Department will distribute a fund of $1.4 billion to more than 300,000 tribe members to compensate them for historical accounting claims, and to resolve future claims that trust assets were mismanaged by U.S. officials.

The settlement resolves a 13-year-old dispute in which Indian tribes claim they were swindled out of billions of dollars in oil, gas, grazing, timber and other royalties overseen by the Interior Department since 1887.

Interior currently manages about 56 million acres of Indian trust land, administering more than 100,000 leases and about $3.5 billion in trust funds.

The settlement also establishes a $2 billion fund for a land consolidation program, which will also incorporate a college and vocational school scholarship fund for American Indian students.

The negotiated settlement requires formal endorsement by the U.S. District Court for the District of Columbia, and authorization from Congress to implement the settlement.

Interior Secretary Ken Salazar called the settlement a historic, positive development for Indian country and a major step to reconcile decades of acrimony between Indian tribes and the federal government.

"While we have made significant progress in improving and strengthening the management of Indian trust assets, our work is not over," said Salazar, who announced he is establishing a national commission to evaluate ongoing trust reform efforts.

Elouise Cobell, a member of the Blackfeet Tribe from Montana who was the lead plaintiff in the case, called the proposed settlement crucial for hundreds of thousands of Native Americans who have suffered for more than a century through mismanagement of the Indian trust funds.

The class action case, involving several hundred thousand plaintiffs, was filed in 1996, and had undergone hundreds of motions, dozens of rulings and appeals, and several trials over the past 13 years.

The trust began in 1887 with the General Allotment Act (or the Dawes Act), when tribal lands were divided into parcels (between 40 and 320 acres) and allotted to individual Indians, with the remaining land (ultimately about 90 million acres) sold off to non-Native interests. The Interior Department was assigned to manage grazing, timber and oil and gas drilling on the land, and was to pay Indians royalties for those activities.

As the original Native landholders died, successive generations received smaller undivided interests in the same parcels of land, meaning today there may be dozens, hundreds, even thousands of Indian owners per one parcel of land. Consequently, very few individual owners can obtain meaningful financial benefits from their land.

For more than a century, an untold amount of money meant for some of the nation's poorest residents was lost, stolen or never collected.

The Office of Special Trustee was established by Congress in 1994 to reform financial management of the trust system. Indians sued in 1996, claiming the mismanagement cost them between $10 billion and $40 billion.

Cobell said she is hopeful that the settlement can "help break the cycle of poverty that has held too many families in poverty for generations."

For more info:
Office of the Special Trustee for American Indians (doi.gov)
Department of the Interior
cobellsettlement.com