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  • Babbitt Finishes Grand Jury Testimony (July 8)

  • U.S., Indians Argue Over Trust Funds (June 11)

  • In Court, Babbitt Vows to Overhaul Indian Trust Fund System

    By Bill Miller
    Washington Post Staff Writer
    Saturday, July 10, 1999; Page A11

    Portraying himself as an ardent supporter of Native Americans, Interior Secretary Bruce Babbitt told a federal judge yesterday that he is committed to overhauling a problem-ridden trust fund system maintained on their behalf.

    "I have been immersed in Indian affairs all of my life," Babbitt said in U.S. District Court here, recalling his work 30 years ago as a legal adviser to the Navajo nation. Trust reform, he pledged, will be well underway by the time President Clinton leaves office in January 2001.

    Babbitt's testimony came at the trial of a class action lawsuit by the Native American Rights Fund that accuses the federal government of mismanaging billions of dollars in Indian trust accounts. The presiding U.S. district judge, Royce C. Lamberth, has repeatedly criticized the government's failure to improve an antiquated record system and has openly considered naming a special master to oversee reform.

    Babbitt contended that such drastic court intervention isn't necessary, suggesting instead that an advisory panel keep the judge informed about progress.

    It's not the first time Lamberth and Babbitt have tangled. Earlier this year, the judge held Babbitt, Assistant Interior Secretary Kevin Gover and Treasury Secretary Robert E. Rubin in contempt of court for failing to ensure that records essential to the case were turned over to attorneys for the Indians. The ruling carried no penalties but was politically embarrassing.

    The trial will determine what to do with roughly 350,000 trust accounts held by individual Indians. The trust funds were established more than 100 years ago to compensate Indians for use of their land; the government is supposed to manage the accounts and pass along royalties from the sale of petroleum, timber and other natural resources taken from the land. In all, the government deposits approximately $350 million per year into the accounts. Both sides agree that record-keeping historically has been a mess and that there has never been an adequate accounting. The Indians contend they should be eligible to collect billions of dollars in damages.

    Attorneys for the Native Americans maintain that the trusts have been mishandled and neglected by the Bureau of Indian Affairs (BIA) an arm of the Interior Department and the Treasury Department, which invests the money.

    Much of Babbitt's testimony dealt with his response to legislation passed by Congress in 1994 requiring massive trust reforms. The legislation called upon Clinton to name a special trustee for Indians, and he chose Paul M. Homan, a trust specialist and former president of Riggs National Bank. Although Babbitt initially recommended Homan for the job, the two had a public falling-out that led to Homan's resignation earlier this year.

    Homan has testified that Babbitt never gave him enough money or staff to make significant progress. Among other things, he complained that Babbitt opposed his plans to create an outside agency to handle the trust system.

    Babbitt insisted in court yesterday that Homan did not appreciate the importance that Indians place upon their dealings with the BIA. While conceding that tribes have a "love-hate relationship" with the BIA, Babbitt said they were nonetheless opposed to any actions that would dilute the bureau's role.

    Babbitt said a new computer system and other improvements will get the trust system back on track within the next few years, and he noted that a constellation of forces is highlighting the issue the administration, Congress, the media, the judge and especially Indians.

    Despite Babbitt's promises, attorneys for the Indians questioned the resolve of the former Arizona governor, characterizing some of his statements as "gobbledygook." During cross-examination, Babbitt repeatedly clashed with lawyer Elliott H. Levitas, at one point saying he felt he was being "pistol-whipped."

    Babbitt, the final government witness, is due to return to court today for a rare Saturday session to complete his testimony. Lamberth made the special arrangements to accommodate Babbitt's travel schedule.


    © 1999 The Washington Post Company

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