Narf Wins Big Victory As Federal Court Allows Pembina Chippewa Damages Claims to Go Forward
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• NARF WINS BIG VICTORY AS FEDERAL COURT ALLOWS PEMBINA CHIPPEWA DAMAGES CLAIMS TO GO FORWARD In 1863 and 1892, plaintiffs' ancestors ceded United States to get the case dismissed or lands totaling some 20 million acres to the substantially reduced. It allows the case to go United States. The Indian Claims Commission forward to determine whether the United States and this court awarded compensation for those breached its trust responsibilities to the lands. The compensation awarded was then Pembina Chippewas with respect to their trust held in trust by the United funds, and to determine an States. This suit seeks amount of damages for damages for mismanage ~ NARF Wins Big Victory as Federal Court which the United States is ment by the United States Allows Pembina Chippewa Damages liable for those breaches. of the funds it held in Claims to Go Forward page 1 trust. The Pembina Chippewas' So begins the Opinion of $53 million judgment the U.S. Court of Federal award is the second largest CASE UPDATES Claims in its opinion dated - Klamath Basin Indian judgment award January 26, 2006, in the Adjudication page 10 The Pembina Chippewas' case Chippewa Cree Tribe trust fund is not small. In - Draft Declaration on Indigenous of the Rocky Boy's Peoples page 11 1991 as the U.S. Department Reservation, Little Shell of the Interior's Bureau Tribe ofChippewa Indians ~ New Board Members page 12 of Indian Affairs entered of Montana, Turtle ~ CALLING TRIBES TO ACTION! into a contract with the Mountain Band of .................................................. page 13 accounting firm of Arthur Chippewa Indians, and Andersen to "reconcile" all the White Earth Band ~. Indian Law Library page 14 1500 tribal trust funds held of Minnesota Chippewa by the United States, the Indians, et al. v. United Pembina Chippewa trust States. fund was listed as the "second largest" judgment The Court's fifty-five (55) page OpInIOn is a fund being managed by the United States at that stunning victory for these four tribes, who also time. The total awards to the Pembina are known as the "Pembina Chippewa Tribes." It Chippewas by the Indian Claims Commission comes almost fourteen years after the case was (ICC) - in 1964 and1980 -were about $53 million. filed by the Native American Rights Fund Only the ICC awards to the Lakota (Sioux) (NARF) on behalf of the Pembina Chippewa Nations of about $200 million exceeded those of • Tribes. It rejects four major arguments by the the Pembina Chippewas. ~ VOLUME 31, NO.1 WINTER/SPRING 2006 While the Lakota Judgment Funds have yet to on tribal trust funds for the time period 1972 to be distributed, the government has made several 1992. This limited reconciliation project resulted distributions of the Pembina Chippewas' judg in reports to tribes in 1996. ment fund. In 1984, 1988, 1990, and 1994, large After studying their Arthur Andersen reports, amounts of the fund were, at the request of the in July 1997, at the Court's request, the Pembina Pembina Chippewa Tribes' leaders and with Chippewa Tribes filed their response to the congressional approval, distributed in the form reports. The Tribes were adamant that the of one-time "per capita payments" to members Arthur Andersen reports did not resolve any of and non-members of the Tribes eligible to their claims in this case, and in fact the reports receive such payments under the congressional supported the Tribes' claims of misaccounting Pembina Distribution Acts of 1971 and 1982. and mismanagement of the PJF. In November The per capita payments ranged from $44.00 to 1997, the government replied that it was willing $1400.00. In addition, under the 1982 to entertain proposals from the Tribes in Distribution Act, and also at the request of the an effort to resolve this case by means of a tribal leaders, twenty percent (20%) of each negotiated settlement. tribe's share is held by the United States in trust for tribal economic and social programs. The Efforts to resolve this case by means of tribes are allowed to receive approved program negotiated settlement funds from the interest earned on their 20% For the next several years, the case again was shares. stayed by the agreement of the parties and with the Court's approval. During this time period, The filing of this case in 1992 the parties worked together to identify, locate, But, particularly in 1988, at the time of one of the Arthur Andersen tribal trust fund reconcili and collect the documents pertaining to the PJF. investment experts were hired to piece together the per capita distributions, the tribal leaders of ation project. In the early 1980s, critical reports For the Arthur Andersen reconciliation period, what evidence there was of the government's the Turtle Mountain Band of Chippewa Indians by the U.S. General Accounting Office and the much of the information had been collected. accounting and management of the PJF. By were dismayed at the overall lack of money Interior Department's Office of the Inspector •• Still, the process was arduous. "If you or I go to August 2000, the experts had prepared and the available for distribution. The Tribe sought an General documented major problems in the a private bank or trustee and ask for our account Tribes had approved a report to the government audit of the Pembina Judgment Fund (PJF) from United States' fiduciary management of tribal records, we will get them within a reasonable on their view of the government's accounting of the Interior Department's Office of the Inspector trust funds. By 1987 Congress had mandated an time," says Melody McCoy, who has served as the PJF from 1964 to September 1992, the end of General. The Tribe also hired independent audit and reconciliation of the tribes' funds NARF's lead attorney on this case since the Arthur Andersen reconciliation project. The accountants who confirmed to the Tribe that on which had never been done even though some of September 1996. "That is not the situation where Tribes' report showed that, based on the docu this issue, "you don't need an accounting firm, the funds date back to treaties of the early 1800s. the federal government is your trustee," she ments provided to the Tribes to date, for this time you need a law firm." The Tribe retained NARF And yet the United States was required to hold cautions. "It takes the government about five period there were over 11,000 transactions in the to file a breach of trust lawsuit over the govern these funds in trust for tribes under its own years to produce all of the records for a tribal PJF accounts. About 10,000 of these appeared to ment's fiduciary management - accounting and federal law. trust fund. The records are in various storage be investment transactions, and about 1000 investment - of the PJF from the inception of Eventually, the Bureau of Indian Affairs facilities literally across the country - from San of them appeared to be non-investment transac the Pembina Awards in 1964 to the present. admitted that it was incapable of conducting an Francisco to Albuquerque to Denver to Kansas to tions. Of the 1000 non-investment transactions, A case for money damages was filed in the U.S. audit and reconciliation itself, and so it bid out Chicago to Virginia. Until recently they were not at least 250, (one quarter or 25%) were lacking Court of Federal Claims in September 1992. the project. The contract was awarded to Arthur sorted or indexed by tribe or by account. The sufficient documentation or validity under the It was filed as a class action on behalf of "all Andersen, and at the end cost the government government is undertaking that effort only now, criteria governing such transactions as set forth beneficiaries to the PJF." $21 million dollars. But Arthur Andersen in light of repeated mandates of Congress and in the government's own tribal trust fund admittedly was unable to perform a historical lawsuits like that of the Pembina Chippewas. And accounting and management manuals. These The United States' efforts to reconcile tribal accounting, a standard audit, or even a full rec at the end of the day you'll never know whether questionable non-investment transactions trust funds onciliation of the tribal trust funds - largely due you've gotten all of your trust records. You'll just totaled over $63 million. For many years after it was filed, the case was to poor or non-existent record keeping on the never know." Over the next several years, many in-person stayed upon agreement of the parties and with part of the government. Instead, Arthur But NARF nevertheless persisted on behalf of meetings were held to discuss the 250 non the Court's approval to allow the completion of Andersen performed a very limited reconciliation the Pembina Chippewas' claims. Accounting and investment transactions. By March 2003 the ~ Preliminary Report on Estimate of Damages" that Further, the Court found nothing in the PJF insufficient to constitute the requisite accounting. showed the gap in how the PJF funds were Appropriations or Distributions Acts that negated The Court also rejected the United States' actuaJly invested compared to how in the Tribes' • the trust character of the PJF Awards. argument that because it did the distributions it view they should have been invested had the The Court also held that Congress has created need not provide an accounting. trustee properly and fully managed the PJE statutory duties on the part of the United States It was around this time that the United States to invest the PJF Awards, and the Court can hear The court understands the government to returned to Court and sought to get this case and resolve claims for money damages of alleged be arguing that a trustee can avoid liability for either dismissed or substantially limited.