1651



                                     UNITED STATES DISTRICT COURT
                                     FOR THE DISTRICT OF COLUMBIA

                   ELOUISE PEPION COBELL,       :  Civil Action 96-1285
                   et al.                       :
                                 Plaintiffs     :
                                                :  Washington, D.C.
                           V.                   :  Wednesday, June 25, 2008
                                                :
                   DIRK KEMPTHORNE, Secretary   :
                   of the Interior, et al.      :
                                                :
                                 Defendants     :  2:00 p.m.

                                 TRANSCRIPT OF EVIDENTIARY HEARING
                                               DAY 10
                                BEFORE THE HONORABLE JAMES ROBERTSON
                                     UNITED STATES DISTRICT JUDGE

                  APPEARANCES:

                  For the Plaintiffs:      DENNIS GINGOLD, ESQUIRE
                                           LAW OFFICES OF DENNIS GINGOLD
                                           607 14th Street, NW
                                           Ninth Floor
                                           Washington, DC 20005
                                           (202) 824-1448

                                           ELLIOTT H. LEVITAS, ESQUIRE
                                           WILLIAM E. DORRIS, ESQUIRE
                                           KILPATRICK STOCKTON, L.L.P.
                                           1100 Peachtree Street
                                           Suite 2800
                                           Atlanta, Georgia  30309-4530
                                           (404) 815-6450

                                           KEITH HARPER, ESQUIRE
                                           JUSTIN GUILDER, ESQUIRE
                                           KILPATRICK STOCKTON, L.L.P.
                                           607 14th Street, N.W.
                                           Suite 900
                                           Washington, D.C.  20005
                                           (202) 585-0053

                                           DAVID C. SMITH, ESQUIRE
                                           DANIEL R. TAYLOR, JR., ESQUIRE
                                           KILPATRICK STOCKTON, L.L.P.
                                           1001 West Fourth Street
                                           Winston-Salem, North Carolina  27101
                                           (336)  607-7392

                                                                              1652



                  For the Defendants:      ROBERT E. KIRSCHMAN, JR., ESQUIRE
                                           JOHN WARSHAWSKY, ESQUIRE
                                           MICHAEL QUINN, ESQUIRE
                                           J. CHRISTOPHER KOHN, ESQUIRE
                                           GLENN GILLETT, ESQUIRE
                                           U.S. Department of Justice
                                           1100 L Street, N.W.
                                           Washington, D.C.  20005
                                           (202) 307-0010

                                           JOHN STEMPLEWICZ, ESQUIRE
                                           Senior Trial Attorney
                                           U.S. Department of Justice
                                           Commercial Litigation Branch
                                           Civil Division
                                           Ben Franklin Station
                                           P.O. Box 975
                                           Washington, D.C.  20044
                                           (202) 307-1104

                  For the Osage Nation:    MERRILL GODFREY, ESQUIRE
                                           AKIN GUMP STRAUSS HAUER & FELD, LLP
                                           1333 New Hampshire Avenue, NW
                                           Washington, D.C.  20036-1564
                                           (202)887-4000

                  Court Reporter:          REBECCA STONESTREET
                                           Official Court Reporter
                                           Room 6511, U.S. Courthouse
                                           333 Constitution Avenue, N.W.
                                           Washington, D.C.  20001
                                           (202) 354-3249


                  Proceedings reported by machine shorthand, transcript produced
                  by computer-aided transcription.

                                                                              1653



            1                          P R O C E E D I N G S

            2              THE COURT:  I have been very impressed with the high

            3     quality of the lawyering in this case on both sides, but no --

            4     the first honors in this courtroom go to the two young men who

            5     have been operating the laptops.  And so in their honor, we're

            6     going to have a little music.  I think we go -- it takes just a

            7     minute to stream.  If you don't know bluegrass, then this will

            8     go completely over your head.

            9              (Audio played in open court.)

           10              THE COURT:  Now, we are gathered together for what I

           11     think is going to be the last court appearance in this case for

           12     a while.  And I was serious when I said that I enjoyed the

           13     lawyering in this case.  You've all done a terrific job.  I do

           14     have some questions.  You have some answers of your own, but let

           15     me just go over two or three issues that are in my mind.  And I

           16     don't mean by any means to foreclose anything you want to say to

           17     me.  I want to hear whatever you've got to say by summary or

           18     argument in this case.  And these are not in any particular

           19     order.

           20              But I need some clarification from both sides about the

           21     Osage money.  And by the way, if the representative of the

           22     Osage Nation is here, when counsel for both sides are finished

           23     arguing, I will give you an opportunity to speak on the subject

           24     if you wish to.

           25              MR. GODFREY:  Thank you, Your Honor.

                                                                              1654



            1              THE COURT:  I don't think I quite fully understand what

            2     use the government is making of the Osage data, and for what

            3     reason the government calculates the Osage money moving through

            4     the IIM system.  Is it solely to offset or to respond to the

            5     plaintiffs' use of it?  Does the Osage money belong in the

            6     calculation at all, from the government's point of view?

            7              For the plaintiffs, I need to know what evidence there

            8     is in this record, if any, that Osage headright share money

            9     actually entered into or was supposed to enter into the IIM

           10     system.  I know that there are Osage IIM accounts, but I'm

           11     talking about the Osage mineral rights money that is generally

           12     called headright money.  Have the plaintiffs presented any

           13     evidence that those headright shares actually entered the

           14     system, or are they merely assumed to have, or is the argument

           15     that they should have even if they didn't?

           16              And I suppose I may hear from the Osage Nation as part

           17     of this argument this afternoon what their view is about what

           18     role, if any, Osage headrights money should play in this whole

           19     analysis of withheld or not properly paid out IIM monies.

           20              Interest.  Now, we all know that anything we call

           21     interest is something of which I probably don't have

           22     jurisdiction, so the plaintiffs have been talking throughout

           23     about benefit to the government.  But there is also an interest

           24     calculation or an interest number, properly so named in this

           25     case by virtue of the statute, that allows for the award of

                                                                              1655



            1     interest to the Indians.  And what I need to know from the

            2     government is how they read that statute, and what if anything

            3     does it have to do with the issues that are before me now in

            4     this case.

            5              And for the plaintiffs I'm interested in knowing

            6     whether there is any evidence that the government made a

            7     specific investment of Indian funds for its own benefit, or is

            8     the theory that it inherently benefits from the retention of

            9     funds, and are the plaintiffs asserting that an award of actual

           10     interest by virtue of the statute is appropriate in this case?

           11              The CP&R data - that is, the exact use of the CP&R data

           12     in this case - remains something of a mystery to me.  I need to

           13     understand better than I do why the parties disagree about the

           14     percentage of CP&R checks that were cashed.  The defendants in

           15     their brief say only about two-tenths of one percent of the

           16     dollars were not cashed; the plaintiffs say that number is

           17     closer to six percent.  And I need to know a little bit more.

           18     Maybe you can remind me of where it is in the record where those

           19     numbers come from.

           20              For the defendants, as I understand the testimony, it

           21     looks like NORC relied on or actually directly used information

           22     which your own experts said would systematically underreport

           23     receipts.  I'm talking about the 1906 Sundry Act in which

           24     Dr. Angel said it would underreport receipts.  And I understand

           25     that NORC used that number anyway.  If that's conceded, then

                                                                              1656



            1     what is the effect?  What's the bottom line effect?

            2              Also, it appears that some of the data from CD&L

            3     regarding receipts and disbursements from the general ledger has

            4     some duplicate numbers, no numbers for some years.  What's the

            5     effect of that?  Or are you sticking by the duplicates?  Are the

            6     duplicate numbers just appropriate estimates?  What is your

            7     position on those?

            8              The Morgan Angel estimate of Tribal IIM of 10 percent

            9     for many years and 15 percent for some years struck me when I

           10     heard it, and still strikes me as a big round number, and I'm

           11     not sure whether the government is sticking to that number in

           12     the face of the plaintiffs' argument and evidence that the real

           13     number is more like two percent.  Has the government done any

           14     recalculation of that?

           15              Now, there's some puzzled faces at defense table, and

           16     it may be puzzled because I don't understand what the evidence

           17     is.  And if I don't, I'm happy to be re-educated.

           18              A big question for the plaintiffs is whether they are

           19     effectively conceding that the CP&R data, which is the major

           20     premise of their disbursement rate, does not include amounts

           21     disbursed to tribes, third parties, so called stakeholders, and

           22     others who do not have IIM accounts.  And if that is conceded,

           23     don't you have to concede that the calculated disbursement rate

           24     systematically understates total estimated disbursements?

           25              And what do you do with the fact that your CP&R

                                                                              1657



            1     disbursement rates, even at points where there are data, don't

            2     seem to mesh with the data?  It's a calculated rate, but I

            3     wonder if all the actual data that is available has been

            4     properly factored into the disbursement rate that you've

            5     calculated.

            6              And at a more general level, I want to hear from the

            7     plaintiffs about whether they think their reliance, almost total

            8     reliance on the CP&R data for a disbursement rate, is really

            9     quite plausible.  What corroborating evidence is there

           10     suggesting that only three-quarters of the beneficiaries' money

           11     was paid out to them; would auditors have given even qualified

           12     opinions if there were any evidence that upwards of 25 percent

           13     of the monies collected and intended for beneficiaries were

           14     disappearing.

           15              I've got a couple more questions, but I think I'm

           16     probably sort of overloading you now anyway.  And they're not

           17     very well organized.  I'm waiting for you to organize them.

           18              Who goes first, Mr. Dorris, Mr. Smith?

           19              MR. SMITH:  Your Honor, did you want to address

           20     exhibits now or wait until after the closing arguments?  We had

           21     not introduced the exhibits at the close of evidence.

           22              THE COURT:  Are there disputes about the exhibits?

           23              MR. SMITH:  We've consented to all of the defendants'

           24     exhibits.  Apparently the defendants object to two of our

           25     exhibits.

                                                                              1658



            1              THE COURT:  And which two do the defense object to?

            2              MR. SMITH:  Exhibit 65, which was Mr. Pallais' document

            3     where he had about 200 reports and you could hyperlink to see

            4     the actual report, and Exhibits 58 and 124.  It had the same

            5     document number, excuse me.  And that was Mr. Kehoe's report on

            6     IIM banking.

            7              THE COURT:  What's the objection?

            8              MR. SIEMIETKOWSKI:  And fortunately, Your Honor,

            9     because of cooperation with counsel, there are indeed only two

           10     objections.

           11              THE COURT:  You said unfortunately?

           12              MR. SIEMIETKOWSKI:  I said fortunately.

           13              THE COURT:  I would have to play some more banjo music

           14     to you.

           15              MR. SIEMIETKOWSKI:  Or Cumbayah.

           16              Exhibit 58, which is also Exhibit 124, is a 2001 draft

           17     report authored by Dr. Kehoe on IIM banking policy.  It was

           18     offered by the defense at the 2003 Phase 1.5 trial, and not

           19     received into evidence because it was a draft report.

           20              Likewise, it is still a draft report, now seven years

           21     old, and that's why we object to it.

           22              THE COURT:  What's that number?

           23              MR. SIEMIETKOWSKI:  It is marked as both 58 and 124.

           24              THE COURT:  All right.  And what about 65?

           25              MR. SIEMIETKOWSKI:  Your Honor, we oppose admission of

                                                                              1659



            1     PX-65, which is the compendium of documents that was prepared by

            2     plaintiffs' counsel.

            3              THE COURT:  Oh, the compendium, yes.

            4              MR. SIEMIETKOWSKI:  Right.  And filed on May 30th in

            5     opposition to our motion in limine.  In our view it is a biased,

            6     slanted view of what the cited documents represent and should

            7     not be admitted for that reason.  If the document were admitted,

            8     Your Honor, plaintiffs could cite to it without any reference to

            9     the underlying documents that provide context to more accurate

           10     portrayal of the events at the relevant time.  This is of

           11     special concern for defendants upon appeal, where the Court will

           12     not necessarily have heard the context surrounding the

           13     compendium as Your Honor has.

           14              Now, of course, Your Honor, as I've discussed with

           15     counsel, we have no objection to plaintiffs admitting each and

           16     every one of the documents cited within the compendium in their

           17     entirety, and they can quote from those in their filings as we

           18     can as well.  In our view, though, the compendium itself, PX-65,

           19     should not be admitted.

           20              THE COURT:  All right.  Well, I'll receive the

           21     compendium, but on the understanding that it is essentially a

           22     listing of selected quotations from longer documents.  And if

           23     the government feels the need to cite any larger part of the

           24     context, either in opposition or if it, heaven for fend, goes to

           25     the Court of Appeals, you may feel free to do so.  In other

                                                                              1660



            1     words, it will be received essentially as a surrogate for the

            2     longer documents that they're quoted from.

            3              And I'll sustain the objection to 58 and 124.  It's a

            4     draft.

            5              MR. SIEMIETKOWSKI:  Those are the only two objections

            6     we had, Your Honor.

            7              MR. SMITH:  Your Honor, can we provide the list of

            8     exhibits to the Court and have them introduced into the record?

            9              THE COURT:  Yes, of course.

           10              MR. SIEMIETKOWSKI:  For the record, we will do the same

           11     as well, Your Honor.

           12              THE COURT:  All right.  Mr. Dorris?

           13              MR. DORRIS:  Good afternoon, Your Honor.

           14              THE COURT:  Good afternoon, sir.

           15              MR. DORRIS:  I learn something new every day, and a

           16     musical interlude before closing is certainly something new for

           17     me.

           18              THE COURT:  Calms the nerves, doesn't it?

           19              MR. DORRIS:  It is great.  Thank you.

           20              Your Honor, I think I have anticipated most of your

           21     questions, and I will try to weave those into my remarks, but

           22     will pick up the list toward the end of anything I have not

           23     covered in the outline as I have put it.

           24              We appreciate your time and your attention and patience

           25     during these nine days of this important trial.  There are

                                                                              1661



            1     really two issues, primary issues in front of us to address.

            2     One has to do with the amount of money that has come into the

            3     Trust that remains and that the defendants cannot account for or

            4     show has been distributed; the second has to do with the benefit

            5     the government has received from those funds, or the specific

            6     relief to which the plaintiffs are entitled as a result of the

            7     statutory duty to pay.

            8              Your Honor, with respect to the restitution of

            9     plaintiffs' money, I want to visit with you on revenues and

           10     distributions, in that order.  Now, with respect to the

           11     restitution of plaintiffs' monies and dealing with revenues,

           12     there are really four topics that I want to address with you.

           13              The first is the method of estimating the data points

           14     and adjustments made to those, Tribal IIM and Osage.  The method

           15     of estimating, Your Honor, really comes down between an approach

           16     that Drs. Cornell and Palmer used in terms of straight line

           17     interpolation between points.  While defendants' counsel

           18     initially raised objections to that, their own statistician has

           19     confirmed that that is a reasonable approach and a good model

           20     for doing it.  I would submit to you, especially as we look a

           21     little further into the evidence, the one objection they seem to

           22     make had to do with during the Depression time frame, where the

           23     plaintiffs in the initial data in their model had very few data

           24     points, so a straight line between the points was objectionable

           25     to the defendants.  Now, with many more data points during that

                                                                              1662



            1     period of time, I think that objection has been addressed and we

            2     will discuss it.  So I would submit to you that with respect to

            3     the method of estimating missing values from the data that we

            4     have here, that plaintiffs' approach has been validated.

            5              With respect to Dr. Scheuren, Dr. Scheuren's own

            6     testimony is that his model was really designed to show the

            7     uncertainty in the data, and was not really a good model for

            8     showing point estimates at any particular time.  He testified

            9     specifically to that.

           10              So let me turn to the data points and the adjustments

           11     that were made, and to talk about that.  In order to put this

           12     into context, I want to look for a minute at what the

           13     differences were when we came into court at the start.

           14              Plaintiff Exhibit 41 initially showed revenues of about

           15     $15.1 billion.  DX-371, which is the updated AR-171, shows

           16     revenues of 14.3 billion, but that contains approximately a

           17     billion dollars in interest.  So when you compare apples to

           18     apples, there's about a billion, nine difference between the two

           19     revenue totals to begin with, not including interest.

           20              Now, that gap quickly closed during the course of the

           21     case.  You will see where the parties were initially, at 15.13

           22     billion and 13.24 billion, which was the defendants' number

           23     without interest.  But Dr. Scheuren, as he sat and listened to

           24     the testimony of Michelle Herman and we looked at the CD&L

           25     summary of the data between 1972 and 1985 alone, he said that

                                                                              1663



            1     would cause him to move up to needing to use a 97-and-a-half

            2     percent confidence factor, given all of the uncertainty, and

            3     according to his testimony, that would add about 400 million, I

            4     think it was $409 million, onto the net.

            5              So clearly Dr. Scheuren, recognizing the uncertainty in

            6     the data at least during that time frame, moved toward

            7     plaintiffs' number.

            8              Now, Dr. Palmer, who sat and listened to the testimony,

            9     attempted to respond, I think in a very professional way, to

           10     weigh the testimony and then put it into the plaintiffs' model,

           11     moved plaintiffs' revenue estimate about $500 million down, to

           12     $14.64 billion that have come into the Trust.  Now, how did he

           13     do that?  He did that by looking at the various data points and

           14     trying to use as many data points as he could.  One of the

           15     exhibits that he showed us yesterday I think is very telling in

           16     what it shows with respect to the parties' revenue totals.

           17              You'll see here, this is Plaintiffs' Exhibit 190.  You

           18     will see Dr. Scheuren is in the red, Dr. Palmer's 189-A revenue

           19     estimate is in the blue.  You will see they move hand in hand.

           20     There are some differences, but just to step back and look, you

           21     can see that there's much greater similarity than there is

           22     disparity.

           23              But let's focus for a second on where there is some of

           24     the disparity, so that can help focus our discussions about the

           25     differences.  If you'll look at Plaintiffs' Exhibit 190, you'll

                                                                              1664



            1     see in the late 19 teens, we are higher, and you will see that

            2     that continues on past that into the '20s and '30s.

            3              Then again you will see over in approximately the 1960

            4     to 1970, the blue line goes higher than the red line.  The two

            5     track again together, but then there is some -- the blue is

            6     higher than the red some when you get into the late 1980's.  And

            7     so this helps show where the plaintiffs' model comes out to be a

            8     little bit higher than Dr. Scheuren's model as we turn to

            9     address those.

           10              Now, here are the data points that we used.  Now,

           11     Dr. Palmer attempted to combine all of the data points, those

           12     that had been used initially by the plaintiffs and those that

           13     had come up to the defendants.  And in the early years, both

           14     sides used 1909 to 1911 for the revenues.  Both sides used it.

           15     1915 to 1920, the complaint by the defendants was that the

           16     reports that Dr. Cornell and Palmer had taken the information

           17     out of included some amounts for unallotted lands.  That has

           18     been removed, so the data we believe is correct for revenue

           19     between 1915 and 1920.  And that addresses the first place that

           20     we saw the red -- the blue bar going higher than the red bar on

           21     Plaintiffs' Exhibit 190.

           22              Now, 1923 to 1949 is one of the areas that you have

           23     noted a question, and I want to come back to that.  That is what

           24     I would submit to you is one of the primary issues and

           25     differences between us with respect to revenue and

                                                                              1665



            1     understatement of that.

            2              1968, plaintiffs used; Dr. Scheuren did not.

            3     Dr. Scheuren acknowledged -- when we showed him the $121 million

            4     number out of the audit that year, he indicated that he would

            5     have used that had he been aware of it.  You'll recall Dr. Angel

            6     indicated at first on cross when confronted with it if he missed

            7     it and he should have used it; the next day he said, no, I've

            8     looked at it some more now and I think that was an average.

            9     Well, that's a little bit like jumping from the frying pan into

           10     the fire, because instead of just using 121 million for one

           11     year, you could arguably use it for two or three.  Dr. Palmer

           12     continued to use 1968 based on that hard evidence of

           13     $121 million, did not use it for several.  But I submit he

           14     could.  That goes a long way to explaining why we saw the blue

           15     bar higher than the red bar in Plaintiffs' 190 during that time

           16     frame.

           17              The second major area of disagreement with respect to

           18     the data points then comes from 1972, it should say, to 1995,

           19     where the plaintiffs are using the defendants' own exhibit at

           20     the last trial, AR-171, and are not accepting certain

           21     unsupported deductions that Ms. Herman has made to them.  And I

           22     will cover that in some more detail.

           23              From 1996 on to 2007, the two parties are using the

           24     same data points for revenue.

           25              Now let me turn and look at these two areas of revenue

                                                                              1666



            1     difference, 1923 to 1949 and 1972 to 1995, and explore that a

            2     little further.

            3              Let's talk about 1923 to 1949.  This is one of the

            4     areas of your inquiry as we started.  I think I don't need to

            5     cover all of this in light of the question that you have asked,

            6     but let me say this:  It is clear from the record that revenues

            7     in the reports used by Dr. Angel and Ms. Herman and then

            8     Dr. Scheuren in his model are understated during that period.

            9     It is obvious because the reports are only reporting on what's

           10     in the hands of the disbursing agents and does not even cover

           11     funds paid into Treasury and that are in Treasury.

           12              Now, how do you go about making an adjustment?  There

           13     are only two alternatives there.  We can throw the data out or

           14     we can accept that data and try to work with it in some adjusted

           15     fashion.  If you throw it out, we have little if any indication

           16     between these 45 or 6 years, Your Honor.  So Dr. Palmer

           17     testified he accepted the data to try to work with it and made

           18     an adjustment.

           19              You can't make a perfect adjustment.  You asked the

           20     question yesterday, how do you deal with some of these words of

           21     "deplorable"?  How do you quantify them?  It's impossible to do

           22     it.  But we're having the work -- given the state of the

           23     defendants' documents that they've maintained, we're having to

           24     work with what is reasonable.

           25              I submit to you what Dr. Palmer did in going to

                                                                              1667



            1     Defendants' 365 and taking the 77 percent, especially in light

            2     of the fact that Defendants' Exhibit 375 does not include any

            3     Tribal IIM, was a reasonable approach to try to do it.  At least

            4     he showed some logic and thinking behind how to go about trying

            5     to make that estimate.  Is it perfect?  Absolutely not.  It's

            6     not an exact science, but it's using the data and adjusting for

            7     a known problem.  That's what we submit is reasonable.

            8              We don't think that there's any evidence that the

            9     disbursements were likewise understated during that period to

           10     any part of the degree to which the revenues are.

           11              Now let me turn to 1972 to 1995.  Those are really two

           12     periods.  The first period is 1972 to 1985.  That is a period

           13     where both in AR-171 and then in the new Defendants'

           14     Exhibit 371, Ms. Herman used a summary that was prepared by the

           15     accounting firm of CD&L which was a summary of some of the

           16     reports, hard copies of the reports from the electronic data in

           17     the electronic accounting system that was in place during those

           18     years.

           19              Now, with respect to revenue, there's no question that

           20     that was incomplete.  There were 89 -- 88 agencies listed on

           21     Defendants' Exhibit 372 at pages 116 through 118.  In 1972,

           22     26 agencies were reporting they had $132.6 million; six years

           23     later, with almost twice as many agencies reporting, they had

           24     419.1 million.  In 1982, with 57 agencies reporting, it was

           25     $600 million.

                                                                              1668



            1              So there's no question in our mind but that this

            2     summary is clearly incomplete and misses a lot of the revenue.

            3     Were oil prices going up and what people were selling oil for

            4     during that time frame increasing?  Yes, they were.  We

            5     recognize that explains some of the increase, but we would

            6     submit to you, as I think Michelle Herman agreed in her

            7     cross-examination, that clearly the incompleteness of the data

            8     was also a reason that you see this kind of increase.

            9              Now, the adjustment that was then made by Ms. Herman at

           10     the tail end between last October and this trial was she knocked

           11     off $20 million, saying that there was a beginning balance of

           12     about 500,000 in 1984 and about 19-and-a-half-million dollars in

           13     1985.  And I stood here and asked her, can you show us anything

           14     other than this one entry on a chart you prepared in the

           15     documents to support that?  And she could not.

           16              And even more so, then, when we turn to the period of

           17     1986 to 1995, the deductions -- this says 1985.  It should say

           18     1995.  The deductions in the black box -- now, last October the

           19     defendants brought Ms. Herman into court and she testified that

           20     the database that she had been working with and manipulating for

           21     many years showed certain figures during this same period of '86

           22     to '95.  Now she came in this time and said that essentially

           23     $243 million that she had testified to in revenue in October had

           24     disappeared.

           25              What you'll recall, Your Honor, she said this was the

                                                                              1669



            1     result of primarily transaction mapping that had been done.

            2     Again, where is the support for that?  She has none, and in fact

            3     testified she couldn't even go back and begin to tell you where

            4     that money went, because once they did it, they changed the data

            5     and changed the system.

            6              So what the plaintiffs submit to you was such

            7     unexplained -- clearly this isn't just an opaque box, this is a

            8     black box where these adjustments were made.  Let's live with

            9     the data that the defendants testified to last October from

           10     those years, before they start monkeying with the electronic

           11     database in a way they can't even explain to us or show to us.

           12              Now, as we move forward and we look at the revenue, I

           13     submit to you that Dr. Palmer's approach of taking the data that

           14     we have laid out here and put into his model which Dr. Scheuren

           15     said was reasonable ends up with a reasonable approach.  There

           16     are two more revenue parts, though, that we need to talk about,

           17     Tribal IIM and Osage.

           18              Now, this is one of the things you asked about, Judge.

           19     An estimate without any foundation, any explanation, is nothing

           20     but a guess.  And that is what we have from Dr. Angel.  I will

           21     tell you that when Dr. Angel testified on direct, they didn't

           22     even ask him about it.  It was only during cross where we tried

           23     to find out, could you explain to us the 10 to 15 percent, I

           24     would submit to you that the testimony is that it cannot be

           25     explained.  It's just something that he told Ms. Herman.  It is

                                                                              1670



            1     not evidence, it should not be used.  Especially in light, as

            2     you've referred to already today, that there was documentary

            3     evidence that was gone over with Dr. Angel from the early 1980's

            4     where Tribal IIM was running one or two percent.

            5              Now, not only was that one or two percent is all that

            6     was in Tribal IIM, but even in some of that were per capita

            7     funds which were in a Tribal IIM account but they were really

            8     money that was intended for individual Indians.  They were per

            9     capita funds that needed to be paid to individual Indians.

           10              They've testified there's no way to segregate what was

           11     Tribal IIM from what was intended for individual beneficiaries,

           12     but they have testified and documents show that they required

           13     all the Tribal IIM money to get out of the Trust, and that they

           14     have succeeded in doing that.  Even Ms. Herman's Defendants'

           15     Exhibit 371 shows that money quit flowing in as Tribal IIM at

           16     some point, and there is no evidence in the record at all that

           17     there's any Tribal IIM money that is still left in the Trust.

           18     None.  They've not proven that there's a penny of Tribal IIM

           19     that is left there.  So I would have to tell you, I think it is

           20     really a red herring.

           21              Now let's go to Osage.  There are about two or three

           22     issues with Osage, Your Honor, that I would like to visit with

           23     you on.  The first is, I think I would say fairly, a legal

           24     question, which is, is the money that's being held by Treasury,

           25     is that money Tribal Trust money or is that money individual

                                                                              1671



            1     Indian beneficiaries'?  Your question, I submit to you, is not

            2     quite the right question on that.  And here's my problem with

            3     it:

            4              You indicate, did the Osage headright money that is

            5     paid directly to headright owners, did that ever come into the

            6     IIM system?  My concern is this sense of system, simply because

            7     it's been discussed a lot.  There is -- as the Treasury

            8     witnesses testified, I think it was Mr. Grippo, there is no

            9     IIM system at Treasury.  So what we have here are funds that

           10     have come into the government that are intended for, and the

           11     1906 act makes clear, are being held for the credit of

           12     individual members of the Osage tribe, and therefore those are

           13     trust funds of individual Indians being held by the government.

           14              Now, the fact that they call it a Tribal account does

           15     not change the nature of those funds any more so than if they

           16     took all of the individual accounts today and called them Tribal

           17     accounts.  They would still be for individual Indians.

           18              So I would submit to you that the legal question is one

           19     to be resolved that those are being held for the benefit of

           20     individual Indians.  And I would submit to you that this

           21     artificial sense of, quote, "system" does not exist.  It's a

           22     question, what is the nature of the funds that the government is

           23     holding in trust?

           24              Now, there was a question also about the number of

           25     headrights.  It's one of those issues I had to kind of laugh

                                                                              1672



            1     about.  Ms. Herman gave us certain figures on the Osage early

            2     on; she multiplied all the Osage per shares by 2,229, which is

            3     the number of headrights that got established in 1908.  So from

            4     1880 through 1907, she used 2,229.  That's, quite frankly, the

            5     same thing that the plaintiffs had done in initially preparing

            6     Attachment A, but then Dr. Angel criticized that and said there

            7     weren't that many headright owners early on.  And so Dr. Palmer

            8     attempted to adjust it down, an adjustment Ms. Herman did not

            9     even make.

           10              Now, it was pointed out yesterday that Dr. Palmer, in

           11     using a straight line interpolation across that time frame

           12     one year, that there were a couple hundred more headright owners

           13     in his calculations than some document Mr. Warshawsky showed to

           14     him.  I will tell you that I think Dr. Palmer's was a reasonable

           15     effort to respond to the evidence that was provided, and as he

           16     said, if the government can show exactly how many headright

           17     owners there were during that period, those are easy adjustments

           18     that can be made in the model.

           19              Now, with respect to the proof of payments outside of

           20     CP&R and EFT, I'm going to pause on that and come back when we

           21     talk about disbursements, because that's something that you have

           22     asked specifically about.  But I would note for you that without

           23     even proof of all of these payments, plaintiffs' model has about

           24     75 percent of all of the Osage money being paid out.

           25              Now, let me turn, Your Honor, now to talk about

                                                                              1673



            1     disbursements.  I cannot help but to look to the law for a

            2     minute when we go to talk about disbursements.  Your Honor, we

            3     end up -- I don't know that I've ever been in a trial where both

            4     sides struggled as mightily as the two sides here to prove what

            5     the correct numbers were.  That's very telling.  It's very

            6     telling, but it really points to the fact that the government

            7     has done a very poor job as trustee of this trust, and keeping

            8     and performing a fundamental trust obligation of preserving and

            9     maintaining the trust records.

           10              So I am sure there were many times during this trial

           11     that you felt frustrated with the parties that they could not

           12     provide you with greater precision.  Well, we couldn't.  We had

           13     to work with the records that were there.  Let's look at the

           14     defendants' burden for a minute.

           15              In the pretrial order you cited to an Indiana Law

           16     Review that I think sets it out very well that "The defendant

           17     has the burden of proof to establish expenses, losses, or other

           18     deductions which it has claimed reduce the amount due the

           19     plaintiff.  It will be presumed that funds or property

           20     unaccounted for were misappropriated and expenses unexplained

           21     were not incurred, with all inferences resolved against the

           22     defendant on these issues.  If the defendant claims expenses but

           23     fails to support these claims without adequate evidence, the

           24     plaintiff recovers the gross amount proven because the defendant

           25     has failed to meet his burden of proof."

                                                                              1674



            1              And these same concepts have been consistently followed

            2     in this circuit for many years.  Both the Cafritz and the

            3     Rosenak case, which I've got two quotes from each and I will not

            4     read to you here, Your Honor, but in both of those cases it is

            5     clear both this court and the DC Circuit follow that law.  It

            6     was the defendants' burden to prove with particularity what has

            7     been paid out.  I will tell you, they didn't get close to doing

            8     that.  There was never any proof of disbursements in terms of

            9     checks, in terms of check registers.  It was at a summary level,

           10     at best.

           11              Now let's move through the different issues that deal

           12     with disbursements.  I will go through quickly a series, Your

           13     Honor, from Plaintiffs' Exhibit 65, the compendium, which I

           14     might indicate to you has links to all of the documents

           15     themselves.

           16              You will see here from 1914, the government itself owes

           17     many millions of dollars for Indian monies which it has

           18     converted to its own use, and it is of interest to note that it

           19     does not know and the officers do not know what is the present

           20     condition of the Indian funds in their keeping.

           21              Likewise, when we look further in that compendium to

           22     1929, you will see a similar quote there.  And on the third line

           23     here on the screen you'll see where it's referring to that they

           24     cannot tell you about the expenditures that have been made.

           25              Likewise, when we look further in the compendium to

                                                                              1675



            1     1952 and 1953, it again talks about problems that are had there.

            2     And halfway through that paragraph you can see that they don't

            3     have supporting records of receipt or disbursement.  Here you

            4     have the language of "deplorable condition" that we looked at

            5     yesterday.  And these are talking about the ISSDA records on

            6     which Dr. Angel was relying.

            7              When we look just a little further into the compendium,

            8     as we get even closer to the modern era of 1969, we talk

            9     about -- they address here that you do not have any effective

           10     control over information flow between the Bureau's Special

           11     Disbursing Agent in Albuquerque and the area and agency offices,

           12     and they cannot reconcile the total assets and the total

           13     liabilities.

           14              And even a little further in the compendium, Your

           15     Honor, as we keep this march of time going on, you see a quote

           16     from 1982 from Plaintiffs' Exhibit 65, where in the fourth line

           17     you see they talk about system operating deficiencies, including

           18     inadequate controls over cash receipts and disbursements.  This

           19     is exactly during the time that we're talking about the CD&L

           20     ledger that we'll talk about later.

           21              And as we move even a little further, here we're

           22     talking about that difference between the general and subsidiary

           23     ledgers, where we've got $46 million out of balance, and the

           24     unreliability of the documents.

           25              So when we talk about that it's the defendants' burden,

                                                                              1676



            1     and then we talk about the unreliability of the documents coming

            2     from the systems over all of these years, we have to keep both

            3     of those points in mind as we begin to look at what is fair and

            4     right to give any credit to here.

            5              As a practical matter, Your Honor, I would submit to

            6     you that in a typical trust situation that every dollar of

            7     revenue that has been proven or reasonably approximated by the

            8     plaintiffs and shown would be awarded to them because the

            9     defendant trustee has not proven the disbursements.  We

           10     recognize, though, that there have been some amounts paid out,

           11     and we recognize that this court may be reluctant to apply that

           12     standard trust law in this particular setting.  So what we have

           13     tried to do, we've tried to work with the information the best

           14     we can to come up with something fair and reasonable.

           15              But let's remember, this isn't one of those things --

           16     we love to say what's good for the goose is good for the gander.

           17     This is not the situation before us right now.  On the one hand

           18     we have the plaintiffs, that had no obligation to keep the

           19     documentation, and where there are admissions in the record at

           20     their summary level that we want to use as admissions against

           21     interest against them; we're entitled to do that.  But when we

           22     come over here and we look at where the trustee is and what the

           23     trustee was obligated to do, and they want to rely on some

           24     unreliable summary level information to try to say millions more

           25     have been paid out, they're not entitled to do that, Your Honor.

                                                                              1677



            1              So let's talk about the different data points that we

            2     have to with respect to disbursements.  Here on the screen are

            3     really four points that I want to visit with you specifically

            4     about disbursements.  From 1887 to 1922, Dr. Palmer is using a

            5     disbursement rate that he calculated from the years 1909 to

            6     1911.  That comes out to a disbursement rate that I think is

            7     approximately 77 percent.  It's got something after the 77, it

            8     may be 77.3, but approximately 77 percent.  That's the best we

            9     could do during that period.

           10              Quite frankly, that is consistent with -- when I was

           11     cross-examining Dr. Scheuren, he said that yes, his model, the

           12     way he had it all tied together in his opaque box, showed about

           13     a 95 percent disbursement rate during that period, but he would

           14     agree that 1909 to 1911 would be the best indication of the

           15     disbursement rate during this period.  We've applied it on to

           16     1922.  I would say that may be longer than my question to

           17     Dr. Scheuren, but I would submit to you that's the best we can

           18     do with the data we have at that period.

           19              Now, we accepted the disbursement rate that was from

           20     1923 to 1949.  There was an adjustment made over on the revenue

           21     side of that data that I've talked about, but we've accepted the

           22     disbursement rate that was there.  Were there disbursements out

           23     of Treasury during that period?  There's no evidence of that.

           24     We don't know.  We tried to adjust the revenue side, I think

           25     Dr. Palmer tried to adjust it in a conservative fashion, and so

                                                                              1678



            1     that's why there's not a difference on the disbursement data

            2     point there.

            3              1955, this is one where Dr. Palmer looked at the data,

            4     it says about 66 million was disbursed, and he adjusted it

            5     downward because he saw a number of problems in that report with

            6     respect to disbursements, and therefore he applied a factor to

            7     that to say that he does not believe that all of that was

            8     actually disbursed out away from the Trust.

            9              With respect to Attachment C, Attachment C, Your Honor,

           10     is where the CP&R data is used to calculate actual disbursement

           11     rates.  Now, it was not just the CP&R data, though.  At first

           12     plaintiffs did not have the EFT data that is maintained on the,

           13     quote, "PACER" system.  That's not the same PACER system that

           14     the court system uses; it stands for something else.  But we

           15     received that last Friday, and Dr. Palmer ran that and included

           16     that in his calculations now.  You asked a number of questions

           17     about the PACER system and the PACER data.

           18              Now, the first question you asked is that there is a

           19     percentage that's set out I think in the defendants' brief that

           20     quoted about two-tenths of one percent.  That has to do with a

           21     limited part of the checks that were not cashed in terms of a

           22     limited payability data.

           23              The data that you have and the evidence you have in

           24     front of you now, Your Honor, is that there was a higher

           25     percentage of checks that were not cashed, and that's coming

                                                                              1679



            1     directly from the defendants' -- both the Treasury's CP&R data

            2     itself, the exhibit that we've used, and with respect to later

            3     data that Mr. Winters even testified about.

            4              So I would tell you that the percentage they refer to

            5     there, they're not comparing apples to apples.  That has to do

            6     with limited payability, and we'll try to tie that down even

            7     tighter for you in the findings of fact that we submit to you.

            8              Now, you asked also about the CP&R data.  Now, let me

            9     get this right.  You remember the chart of Ms. Herman.  When you

           10     think about the CP&R data with the EFT data, that covers all of

           11     the disbursements that go out to the beneficiaries, that go out

           12     to the third parties, that go out to the stakeholders.  It may

           13     even include some disbursements to the tribes.  Okay?

           14              The whole issue that we begin to deal with when we talk

           15     about disbursements to the tribes is this issue of transfers.

           16     Now, the transfer issue is a very difficult one to address if

           17     you step -- if you do not keep in mind the fundamental burdens

           18     here.  It was the defendants' burden to prove.

           19              Now, let's deal with transfers.  Your Honor, you noted

           20     during Dr. Palmer's testimony that you thought that that may

           21     explain much of the difference between what the CP&R data shows,

           22     supplemented with the EFTs, and what may be in AR-171.  The fact

           23     that the government needed to prove the amount of those

           24     transfers and who those transfers went to and why they went to

           25     them was clear before we started this trial.  Attachment A

                                                                              1680



            1     didn't give them any credit for those transfers, didn't give

            2     them even any credit for the EFTs.  Once we got our hands on the

            3     EFT data from PACER, we've included that.

            4              There is at best episodic, a few random situations

            5     where they've shown disbursements out, these BB disbursement

            6     transfers out.  They have not proven the disbursements, Your

            7     Honor.  They did not meet their burden.

            8              Now, just as soon as we talk about they can't be given

            9     credit for those disbursements out, the question becomes, well,

           10     what about transfers with money coming in?  How can the

           11     plaintiffs fairly take that money coming in but not acknowledge

           12     transfers going out?  Well, that's because not all transfers are

           13     equal.  Much of the money, in fact the majority of the money

           14     that comes into trust for these individual Indian beneficiaries

           15     comes in by way of transfers.  MMS is a transfer into the Trust

           16     for all of the oil royalties and other mineral rights that come

           17     in.

           18              So the fact that the plaintiffs are saying we accept

           19     the defendants' admissions about revenues and that we are

           20     including some transfers there, but we want to hold their feet

           21     to the fire to prove at least with some specificity transfers

           22     out is entirely appropriate.  Judge, they knew that that was an

           23     issue and they've not proven it at all.

           24              Michelle Herman, when she testified about transfers --

           25     and to clarify the testimony, she said intrafund.  She developed

                                                                              1681



            1     this difference between interfund and intrafund transfers.  She

            2     says intrafund transfers aren't even disbursements.  Well, I

            3     agree with her, but I also agree with her they're not transfers,

            4     because that money never leaves the Treasury, no more so than

            5     transfers out, these BB transfers, are just moving it to another

            6     account and never leave the Treasury.

            7              Now, the audits do not help the government on this

            8     point, Your Honor.  Not at all.  Let's look at that.  From 1988

            9     to 1990, Arthur Andersen audited essentially BIA; from 1996 to

           10     2007 there was an audit of what's now called OFTM by Griffin,

           11     and at some point during those years it transferred over to

           12     KPMG.  We know that all of those are qualified audits.  And this

           13     goes right to the heart of one of your questions, which picks up

           14     on a question that Mr. Warshawsky asked yesterday:  Would an

           15     auditor issue even a qualified opinion where he's uncertain

           16     about the disbursements?  Well, I can tell you, these auditors,

           17     and we'll look at the quotes and we'll cite the exhibits right

           18     here, that's exactly what they did.

           19              But what did Interior understand these audits to mean?

           20     Right here, what does a qualified audit mean?  Interior's own

           21     Inspector General put it this way in Plaintiffs' Exhibit 120 on

           22     page three.  Talking about the problems and conditions of their

           23     books and records, he said, "These conditions prevented the cash

           24     and trust fund balances and the receipts and disbursements from

           25     being audited."  He acknowledged they did not even audit the

                                                                              1682



            1     receipts and disbursements.

            2              If we look on further at that same exhibit, which is

            3     the 1999 audit that Griffin did, they talk about there being on

            4     page 32 - and that's note five on page 32 - significant

            5     estimates.  "The preparation of financial statements requires

            6     management to make estimates and assumptions that affect certain

            7     reported amounts and disclosures.  Accordingly, actual results

            8     could differ from these estimates."

            9              It can't be any clearer that the auditors are saying

           10     what's actually happening and what's actually there may be

           11     different than what's in these financial statements.

           12              In fact, in that same audit, a little further back on

           13     page 46, they show that a weakness has to do with the control

           14     over intrafund and interfund transfers.  And they said, because

           15     of those issues, the auditors recommended a process be developed

           16     and documented to consistently record transfers.

           17              The record trails off from there, Your Honor.  Did the

           18     Government develop processes and document them to consistently

           19     record transfers?  We don't know.  We know that Ms. Herman was

           20     never asked to look into that issue.  She said no one ever asked

           21     her to do it.  We know that there's been no evidence here that

           22     they have done this, and developed and documented those

           23     transfers, so either, one, they didn't do it and they have not

           24     proven it; or two, they did it and they didn't want to come in

           25     and show us the evidence regarding those transfers.

                                                                              1683



            1              Now, let me also look for a minute, Your Honor,

            2     about -- go back to a minute to the CD&L period where we talk

            3     about transfers.  And I think we have that in Summation.  Can

            4     you bring that up?  I'll go quick, because I know you've seen --

            5              THE COURT:  Excuse me, Mr. Dorris.  I'm sorry to

            6     interrupt you, but it occurs to me you've been up for about an

            7     hour, and I didn't put any time limits on anybody, but I want to

            8     make sure the government gets some time to talk.  What's your

            9     estimate here?

           10              MR. DORRIS:  Your Honor, I think I've got about another

           11     15 minutes, maybe 20.

           12              THE COURT:  Fine.  Go ahead.

           13              MR. DORRIS:  I will go fast.  I'm talking as fast as I

           14     can, but I'll try to wrap up in the next 20 minutes or so.

           15              THE COURT:  Considering your geographic origins, you're

           16     doing a good job, Mr. Dorris.

           17              MR. DORRIS:  Thank you.  Judge, I want to go back.

           18     When we talk about disbursements in the electronic era and

           19     everything, here are the CD&L summaries that you've looked at

           20     before.  These are the disbursement summaries.  We're at

           21     Plaintiffs' Exhibit 372; this is page 120, where we've

           22     highlighted or put in red all of those where they've just got

           23     disbursement from one year are the same, and the next page I

           24     think is even worse than this.

           25              So that this is an instance that has to do with now

                                                                              1684



            1     applying, Your Honor, the percentage that was calculated from

            2     the CP&R and the EFTs, why should that be applied to other

            3     periods?  Well, clearly the disbursement data here is, at best,

            4     estimates that we've got, and I think it's entirely reasonable,

            5     where you have as long a period as we have of 1988 through 2002,

            6     where we have the actual checks and the electronic transfers and

            7     can come up with a hard disbursement rate, to then use that in

            8     periods nearby when we were dealing with similar sort of

            9     records.

           10              Now, Your Honor, let's talk about the net of the

           11     revenues and disbursements for a minute.  When you take what

           12     Dr. Palmer has testified to as 14.64 billion, you look at the

           13     disbursements at 10.67, we end up with disbursements of

           14     $3.97 billion that have been paid in that have not come out of

           15     this Trust, that are still there in Treasury.  And, as

           16     Professor Laycock testified on the first day, this type of -- I

           17     liked the way he put things, in a very simple, straightforward

           18     way.  It's a down-the-middle-of-the-plate restitution claim.  I

           19     guess that's a good saying during baseball season.

           20              Now let me move to the second area, Your Honor, which

           21     has to do with benefit conferred and specific relief.  On the

           22     benefit conferred, Your Honor, our case is really summed up in

           23     four straightforward points.

           24              First, the defendants have failed to distribute

           25     billions from the Treasury.  All the money goes through

                                                                              1685



            1     Treasury; the money that was in commercial banks was controlled

            2     by Treasury and rolled into it in 1934.  All the cash is

            3     deposited into Treasury, and all securities are redeemed by

            4     Treasury and all payments come from Treasury.  Any money that is

            5     undisbursed remains in the Treasury General Account - that's the

            6     only cash account for the government - and that account, the

            7     evidence has been clear, is the account that the government

            8     looks to to make their borrowing determinations, and it's based

            9     on the cash in the TGA, including the IIM funds.

           10              Quickly, let's look at what the evidence is.  The first

           11     is from a witness that testified in a previous trial, Your

           12     Honor.  You did not have the benefit of seeing him testify, but

           13     his testimony could not be clearer.  Commissioner Gregg

           14     testified when asked the question, "Who gets the benefit of the

           15     money in the Treasury General Account?"  And his answer was,

           16     "Essentially the federal government.  It certainly isn't

           17     credited to any" --

           18              THE COURT:  Commissioner Gregg is commissioner of what?

           19              MR. DORRIS:  He was a commissioner of -- first he was

           20     with the Public Debt, the Bureau of Public Debt, and then he was

           21     the commissioner of FMS, which I think is the Financial

           22     Management Service at Treasury, which were the two groups at

           23     Treasury that it was testified to are involved in the borrowing

           24     decision.

           25              THE COURT:  All right.

                                                                              1686



            1              MR. DORRIS:  And he goes on to say, "What it means is

            2     that to the extent that there are funds that come into the

            3     Treasury's General Account, those are considered in the

            4     borrowing decisions that are made by the department and carried

            5     out by the Bureau of Public Debt.  So it means that, at least at

            6     the margin, the more that's collected and within the various

            7     accounts within Treasury, the less Treasury has to borrow."

            8              Similarly he testified further, and this is a little

            9     smaller, Your Honor, he explained that Treasury treats the IIM

           10     money and account like any other funds that come into Treasury,

           11     really without distinction.  When he was asked what it means

           12     when funds are available to Treasury, Commissioner Gregg

           13     explained, "To me it means it's within the general account, the

           14     Treasury's General Account."

           15              Question:  "So it's the Treasury's asset at that

           16     point?"

           17              Answer:  "Well, it's the government's.  It happens to

           18     reside within Treasury, yes."

           19              Question:  "And I think you testified that when funds

           20     are available to Treasury, those funds do not earn interest.  Is

           21     that correct?"

           22              Answer:  "That's correct."

           23              And he goes on to explain, "It's really -- yes, it's

           24     our -- the funds that are in our Treasury General Account that

           25     we use to pay off obligations that are due, and it helps, you

                                                                              1687



            1     know, to look at that to determine how much the borrowing has to

            2     be at any given time."

            3              Similarly, Dr. Miller came and testified here on the

            4     first day of trial, Your Honor, that the monies in the Treasury

            5     General Account that should have otherwise been disbursed, it's

            6     a benefit to the federal government because the federal

            7     government doesn't have to borrow that money.  Now, while he

            8     said he wasn't in meetings where those decisions were made, he

            9     testified as a director of OMB that he knew how those decisions

           10     were made, and it's more than just a common sensical inference

           11     that he is making there.

           12              Similarly, Your Honor, with Gary Grippo, who testified

           13     before you, it was very clear that TGA, that the Treasury

           14     General Account is important in Treasury's borrowing decisions.

           15     You see here what is quoted from the transcript at 1255, lines 3

           16     through 11.  And the question at the end is:  "As a matter of

           17     fact, that's something that is standard.  From as long as you

           18     know Treasury, the Treasury General Account is an important

           19     factor in determining borrowing decisions.  Correct?"

           20              And the answer was yes.

           21              Now, he testified even further that the borrowing

           22     decisions are derived from the cash position, and go on and the

           23     question was:  "And that's why you focus on the TGA, because

           24     that's a cash account.  Correct?"

           25              And he said correct.

                                                                              1688



            1              So what we have here is confirmation that money in the

            2     TGA is what forms the basis for the borrowing decisions, and

            3     that is why clearly the government has benefitted from holding

            4     the IIM monies all these years.

            5              Now, with respect to how to calculate that, I would

            6     submit to you that Dr. Palmer's model and Dr. Cornell's model do

            7     a great job.  Just to make sure that there's nothing

            8     misunderstood in his testimony, however, two important documents

            9     also help this.  First, from the 2009 budget, OMB unequivocally

           10     states that deposit fund balances are available to finance

           11     expenditures and are recorded as a means of financing other than

           12     borrowing from the public, Plaintiffs' Exhibit 139.

           13              Treasury's fiscal year-end 2006 Performance and

           14     Accountability Report clarifies that, quote, "Treasury is

           15     authorized to make expenditures and pay liabilities, includes

           16     deposit funds."  And these are deposit funds from

           17     Plaintiffs' 140.

           18              Now let me turn to the issue regarding specific relief.

           19     Now, Your Honor, you asked about this statute, and this is

           20     25 U.S.C. 4012.  And we're shifting now from talking about

           21     benefit conferred to talking about the same restitution type

           22     relief in terms of specific relief that we're asking for.  When

           23     the government talks about the no-interest rule, I've got to

           24     tell you, this statute and others we'll show you, but this

           25     statute by itself blows that whole issue out of the water.

                                                                              1689



            1              Let's look at four features of this statute that I want

            2     to visit with you on.  The first is that it deals with funds

            3     deposited or invested.  The drafters of this statute wanted to

            4     make it very clear that interest was to be paid on funds that

            5     were deposited or were invested; either way, interest was to be

            6     paid.  Second, it makes it clear that this statute applies to

            7     all funds that come in to the government prior to October 25,

            8     1994.  We will show you the statute that then applies for

            9     periods after that.  Third, this statute on its face is

           10     retroactive.  It's retroactive to the date the Secretary began

           11     investing Individual Indian Monies on a regular basis.

           12              Now, the testimony is -- Dr. Angel said that goes all

           13     the way back to the beginning.  That's when the Secretary

           14     started doing that, and Dr. Kehoe said he knows it goes back at

           15     least to 1899.  So it goes all the way back.

           16              And then fourth, where to the extent the claim is

           17     identified by a reconciliation process of Individual Indian

           18     Money accounts, nothing could be clearer, but that's exactly

           19     what we are wrestling with here, Your Honor.

           20              There are some other interesting statutes that I want

           21     to show you.  The next is what would apply to interest after

           22     October 25, 1994.  Let's go back.  It's 25 U.S.C. 161.

           23     25 U.S.C. 161(a), sub part B, would apply to that.  Now, Judge,

           24     what's up on the screen now is 31 U.S.C. 9702.  This is a

           25     current version of the 1841 act that says that the government,

                                                                              1690



            1     for amounts held in trust by the United States government, and

            2     look at that parens, "including annual interest earned on the

            3     amounts," so both the funds and the interest earned on those

            4     amounts "shall be invested in government obligations and shall

            5     earn interest at an annual rate of at least five percent."

            6              Now, we've also introduced, as the asterisk here shows

            7     you, a Secretary of Interior letter viewing the 1841 act as

            8     binding and controlling.  That's at Senate report number 46-186,

            9     at three, from 1889.  The Secretary of Interior clearly viewed

           10     that this is a controlling statute for them.

           11              Now, what did Professor Laycock say about how this

           12     relates, the nature of this remedy?  He said, and explained as

           13     you see the testimony here, that with respect to the

           14     25 U.S.C. 4012 statute that we looked at, he said, "Well, I'm

           15     not an expert on these statutes, and the judge can read them at

           16     least as well as I can, but I can testify to the nature of the

           17     remedy that would be involved in enforcing these statutes.  The

           18     statute on its face appears to require the payment of interest

           19     on funds held for individual Indians."

           20              He goes on to make clear it's retroactive.  And the

           21     question at the bottom of the screen here is, "Is this the sort

           22     of statutory obligation that existed in Bowen?"

           23              Answer:  "Well, it's a statutory obligation to pay

           24     money.  The obligation in Bowen was a very different statute,

           25     but it was also a statutory obligation to pay money.  So the

                                                                              1691



            1     remedy of specifically enforcing that statutory obligation would

            2     be the same remedy; it wouldn't be money damages, it would be

            3     specific relief to enforce the statutory obligation."

            4              That's exactly what we have here, Your Honor.

            5              Now, let me conclude, Your Honor, in two areas, and

            6     I'll try to move quickly.  The first has to do with finality.

            7     It's time for the Cobell case to come to a close and that final

            8     judgment be entered on the merits.  In reassigning this case to

            9     this court, the Court of Appeals made it clear that it expected

           10     this case to be resolved expeditiously and fairly.  This Court

           11     in Cobell XX has similarly noted that it's time to bring this

           12     suit to a close.  The only way to do that is to ensure that this

           13     proceeding results in a final judgment on the merits.  To ensure

           14     finality, plaintiffs propose the following:

           15              First, plaintiffs requested earlier this year that in

           16     light of the inability to obtain an accounting, that this court

           17     order the restitution of certain lands.  In response to that,

           18     the defendants have argued that that is beyond the scope of this

           19     case.  They indicated that issues related to the way in which

           20     trust assets are managed are outside the scope of this

           21     litigation.  Plaintiffs will yield to defendants on this issue

           22     and concede that the restitution of land claims is outside the

           23     scope of this case.

           24              Second, the only other part of this case that arguably

           25     remains a live issue, other than proceedings necessary to

                                                                              1692



            1     implement this judgment, is trust reform, also referred

            2     sometimes to as fixing of the system.  Given that injunctive

            3     relief in that regard has proven to be elusive, to the extent

            4     trust reform remains a live issue, plaintiffs request that this

            5     court dismiss such claims without prejudice to ensure that this

            6     case comes to a close.

            7              THE COURT:  You want a 54(b) judgment?

            8              MR. DORRIS:  Yes, sir, Your Honor.  And should

            9     plaintiffs prevail on the merits in this trial, there will of

           10     course be need to have further proceedings to implement the

           11     final judgment, but we think it appropriate that otherwise this

           12     case comes to a fair and expeditious resolution and a conclusion

           13     by a final judgment.

           14              Your Honor, I know I have run long, and I have tried to

           15     be faithful to your charge to dispense with the rhetoric.  But I

           16     would ask your brief indulgence as I quickly close.

           17              500,000 Native Americans look to Washington here the

           18     summer of 2008 with hope, 121 years after the Dawes Act,

           19     14 years after the Trust Reform Act.  They look to this city for

           20     hope, notwithstanding this city having been the headwaters of a

           21     mighty river of injustices flooding down on them for decade

           22     after decade.  But it's because of where they're looking.

           23     They're not looking to the White House and the executive branch,

           24     they're not looking to Congress and the legislative branch, two

           25     branches that have failed them mightily over the years despite

                                                                              1693



            1     everyone knowing of the injustices that were befalling them in

            2     this Trust.  They are looking with hope because of where they

            3     look, to this courthouse and this Courtroom 23.

            4              They're not asking for a gift, they're not asking for

            5     welfare, they're not asking for a handout, they're simply asking

            6     for what is theirs, their money.  It has been their money and it

            7     is time for them to receive their money.

            8              Your Honor, I would like to close with three quotes,

            9     quickly, two from Cobell VI, one from Judge Lamberth, and ask

           10     you to keep these in mind as you wrestle with this decision.

           11     The first passage from Cobell VI reminds us of the high standard

           12     of conduct the government should have conducted itself by:  "The

           13     federal government has charged itself with moral obligations of

           14     the highest responsibility and trust in its relationships with

           15     Indians, and its conduct should therefore be judged by the most

           16     exacting fiduciary standards."

           17              The second quote, Your Honor, helps indicate the

           18     significance of these trust funds to the plaintiffs, many of the

           19     plaintiffs:  "Given that many plaintiffs rely upon their IIM

           20     trust accounts for their financial well-being, the injury from

           21     delay could cause irreparable harm to plaintiffs' interests as

           22     IIM Trust beneficiaries.  Thus, it seems that the interests at

           23     stake are not merely economic interests in an administrative

           24     scheme, but personal interests in life."

           25              And the final quote, Judge Robertson, comes from your

                                                                              1694



            1     predecessor in this case in a July 2000 memorandum of opinion

            2     that was so forthright and raw that it helped lead to this case

            3     finding its way to your chambers.  And he wrote that he had a

            4     quickly receding hope that something good might come out of this

            5     case, and he wrote:  "This hope is sustained in part by the fact

            6     that the Indians who brought this case found it in themselves to

            7     stand up, draw a line in the sand, and tell the government,

            8     enough is enough, this far and no further.  Real justice for

            9     these Indians may still lie in the distant future, it may never

           10     come at all.  This reality makes a statement about our society

           11     and our form of government that we should be unwilling to let

           12     stand."

           13              Your Honor, in the summer of 2008, as these plaintiffs'

           14     last resort in our much flaunted system of government, we ask

           15     that the system not fail them, and that you hear the

           16     reverberations of their refrain that enough is enough, this far,

           17     no further, it is our money.  Thank you, Your Honor.

           18              THE COURT:  Thank you, Mr. Dorris.

           19              Mr. Kirschman?

           20              MR. KIRSCHMAN:  Thank you, Your Honor.

           21              Your Honor, you had stated repeatedly both before and

           22     during the course of this trial that it should be about the

           23     numbers, and we, defendants, responded to that and presented

           24     credible, reliable numbers based on actual documents and valid

           25     statistical analysis presented through credible, earnest

                                                                              1695



            1     witnesses.  Plaintiffs, in contrast, have failed to justify

            2     their grossly inflated claim for, by their most recent

            3     calculations, $47 billion.  Calling the $47 billion claim

            4     grossly inflated is a serious understatement.

            5              Plaintiffs have failed to present any credible

            6     testimony or evidence to justify that claim.  In their

            7     case-in-chief, plaintiffs bore the burden of establishing that

            8     the government had wrongly failed to disburse approximately

            9     $4 billion in IIM funds to IIM beneficiaries.  However, this

           10     $4 billion figure was supported by not one of the witnesses they

           11     presented to this court, and was contrary to the facts

           12     established by defendants' witnesses and evidence throughout the

           13     trial.

           14              Despite any evidence to justify it, plaintiffs have

           15     continually misstated the amount of funds that should be in the

           16     IIM system by including amounts that clearly do not belong

           17     there, while at the same time understating disbursements from

           18     the IIM system.

           19              Even more pronounced was the failure of plaintiffs'

           20     witnesses to establish any basis for their claim that the

           21     government benefitted from wrongfully withholding these funds,

           22     and that this benefit totaled $58 billion, at least originally.

           23              Based on the most recent calculations, plaintiffs now

           24     claim that the total benefit to the government equals

           25     $47 billion.  However, plaintiffs' most recently revised model

                                                                              1696



            1     presented by Dr. Palmer fails to account for relevant documents

            2     and facts, and is comprised of baseless adjustments to the data

            3     it does use.

            4              Last week you asked for a summary of the testimony and

            5     evidence you heard, and that's what I am prepared to present to

            6     you, Your Honor.  You have now also asked questions, and I will

            7     certainly attempt to answer those questions, or at least address

            8     them to the best I can today.  And we will certainly address

            9     those questions further in our proposed findings of fact and

           10     conclusions of law.  If I don't touch on one, please remind me

           11     and I'll address it before I step down.

           12              But Your Honor, you saw plaintiffs' witnesses and you

           13     heard their testimony.  Even a quick summary of this testimony

           14     from plaintiffs' witnesses demonstrates how clearly they have

           15     failed to prove their case.  Not one of their six witnesses in

           16     their case-in-chief testified affirmatively that the government

           17     actually benefitted from wrongfully withholding funds.  In fact,

           18     those who were questioned about plaintiffs' claim for a total of

           19     $58 billion firmly disavowed knowing anything about the factual

           20     basis for it during their case-in-chief.

           21              Professor Laycock testified first.  While

           22     Professor Laycock spent a lot of time providing his legal

           23     opinions regarding jurisdictional issues and the broad purpose

           24     of restitution, his testimony did not support plaintiffs' claim

           25     for a dollar amount.  Indeed, he candidly stated that, "The

                                                                              1697



            1     basis of my testimony is that's what the plaintiffs are

            2     claiming, but whether or not what they're claiming really

            3     happened was not within the scope of my testimony."

            4              Furthermore, Your Honor, we the defendants have

            5     consistently urged that the remedy in this case must follow

            6     from - that is, be causally related to - the alleged injury,

            7     which is the failure to provide a historical accounting.  In

            8     that regard, Professor Laycock testified in response to the

            9     Court's own questions that plaintiffs', quote, "restitution

           10     claim is now focused not on the failure to account as such, but

           11     the inability to account continues to be relevant as an

           12     evidentiary matter to the attempt to determine the difference

           13     between income and disbursements."  So, he says, "Restitution

           14     here, or specific relief, is not intended to be directly the

           15     remedy for failure to account."

           16              Now, Your Honor, this testimony from Professor Laycock

           17     supports our position that plaintiffs are seeking a remedy that

           18     is distinct and separate from the breach found by this court,

           19     and that is the failure to provide a historical accounting.  And

           20     at least one of the reasons that is relevant here, Your Honor,

           21     is the argument raised here, which is a legal argument, about

           22     burdens of proof.

           23              First I have to remind the Court that the Court of

           24     Appeals and Judge Lamberth as well have already stated that the

           25     standard presumptions related to a trustee in the private arena

                                                                              1698



            1     do not apply here in this case as it relates to the federal

            2     government and the IIM Trust.

            3              Second, and this relates to what Professor Laycock

            4     stated, there is no duty before the last year to create

            5     aggregate trust records.  That's what the Court has asked us to

            6     present as an alternative.  But when it comes to a duty and a

            7     related burden of proof, the duty has always been to individual

            8     accountholders to perform a historical accounting related to

            9     their individual accounts.

           10              So to the extent you can call it an accounting,

           11     Your Honor, in this trial, that accounting or that

           12     reconciliation of the records has nothing to do with the duty to

           13     account for an individual.  And you've seen that.  We've been

           14     talking about aggregate figures, aggregate numbers.

           15              So the burden of proof that plaintiffs speak of, even

           16     if it would be applicable, which it's not, does not lend itself

           17     to this case, to this trial, and to this determination by the

           18     Court of an appropriate remedy.

           19              Now, the second witness plaintiffs presented in their

           20     case-in-chief was Mona Infield.  And a lot of these witnesses

           21     you haven't heard about at all before now, but I think it's

           22     important we go through the case-in-chief and what was actually

           23     presented to you.

           24              Mona Infield was the first of three plaintiffs'

           25     witnesses to testify generally that the data related to the

                                                                              1699



            1     disbursement of funds is not reliable.  This testimony was

            2     essentially a rerun of what this court had already heard from

            3     Ms. Infield in October.  It clearly did not support plaintiffs'

            4     calculation of benefits, either the $4 billion figure or the

            5     total $89 billion figure at that time.

            6              Also, Ms. Infield's brief testimony about Osage

            7     headright funds was so vague and groundless as to constitute no

            8     support for plaintiffs' position related to the Osage headright

            9     fund.  Ms. Infield testified that there is a, quote, "general

           10     understanding, and the culture at Osage is that Osage funds

           11     belong to individual headright shareholders."  This assertion of

           12     a general understanding and a culture at Osage is unsupported by

           13     any evidence and is too vague to prove anything.

           14              We then look, Your Honor, at the third witness

           15     plaintiffs put on in their case-in-chief, Mr. Ray Ziler.  Like

           16     Mona Infield, Mr. Ziler testified only that in his view the data

           17     related to the disbursement of IIM funds was not reliable.

           18     Mr. Ziler's testimony was limited to his vague recollections

           19     based on his work with Arthur Andersen in 1988 through 1990; the

           20     most detailed information he provided was based on documents

           21     that plaintiffs' counsel had specifically provided to him so

           22     that he could speak to the issue of fraud with some definity.

           23     And as the Court has noted more than once during this trial, an

           24     act of fraud or theft of these funds does not prove a benefit to

           25     the government, because the government did not have use of that

                                                                              1700



            1     money.

            2              As the Court correctly observed in regard to

            3     Mr. Ziler's testimony, it only addressed the alleged

            4     unreliability of data roughly 20 years ago, but did not advance

            5     plaintiffs' position in this trial.  And that's correct, it did

            6     not relate to the figure that the Court has set out to

            7     determine.

            8              In response to the Court's observation, plaintiffs'

            9     counsel candidly acknowledged that this line of testimony,

           10     quote, "does not have a direct bearing on how and what numbers

           11     you add up in a column to get that quantification of plaintiffs'

           12     claim."

           13              That took us then, Your Honor, to James Miller, the

           14     former OMB director.  He testified for plaintiffs as an expert;

           15     however, it became quickly apparent that Mr. Miller did not have

           16     any detailed experience or expertise regarding any amounts not

           17     paid to IIM beneficiaries, or even regarding any alleged benefit

           18     to the government.  Mr. Miller testified repeatedly that he was

           19     not testifying to any particular amount, and that plaintiffs'

           20     calculation of a $54 billion benefit to the government was

           21     prepared under certain assumptions on which he could not verify.

           22     He said, "I do not have requisite information to verify those

           23     numbers."  Mr. Miller went on to elaborate that "I can't comment

           24     on the actual data, the actual amounts, the net amounts that

           25     were retained by the government.  I do not have that knowledge."

                                                                              1701



            1              He offered only vague, general statements about how the

            2     United States Government may benefit by the flow of cash into

            3     the Treasury General Account, but he did not provide evidence of

            4     the actual fact or amount of the alleged government benefit, as

            5     the Court required of plaintiffs in its May 2nd order.

            6              Indeed, Mr. Miller acknowledged in response to your

            7     questions, Your Honor, that he does not have any personal

            8     knowledge regarding the government's day-to-day borrowing

            9     decisions, but was only offering what he viewed to be a

           10     theoretical or strategic position.  Therefore, Mr. Miller could

           11     not and did not establish whether the government in fact

           12     benefits from the holding of any IIM funds.

           13              Plaintiffs' fifth witness, Dr. Cornell, was the only

           14     witness who was identified by plaintiffs as offering any

           15     testimony regarding the calculation of the amount of the

           16     government's benefit.  However, Professor Cornell testified

           17     unequivocally that he was not offering an opinion as to the

           18     correctness of the amount of funds he had calculated in his

           19     model.  He testified that while he believes his methodology,

           20     linear interpolation, is in this case correct, he was not in

           21     court to tell you, Your Honor, that the $58 billion figure was

           22     actually the precise measure of the government's benefit from

           23     its alleged use of funds that couldn't be explained from the

           24     work we had done.

           25              Professor Cornell testified, "While I think that

                                                                              1702



            1     requires work further than I've done," he explained that "I

            2     eventually made the assumptions that went into Attachment A.

            3     But I did say to counsel in this matter that I was not a

            4     historian and had not been working on this matter long enough to

            5     have delved into the nature of each number, so to some extent I

            6     am working at a very high level."

            7              And then, Your Honor, Professor Cornell left this case

            8     without giving any further testimony.  In light of the clear

            9     limitations that he himself placed on his testimony, it is clear

           10     that he has not provided any factual support for plaintiffs'

           11     positions.

           12              Your Honor, the last of only six witnesses that

           13     plaintiffs put on in their case-in-chief was Mr. Don Pallais.

           14     And he also did not further plaintiffs' position.  He offered

           15     views regarding only the reliability of data for the accounting

           16     of individual accounts, and, as I said, his testimony was

           17     similar to that of Mr. Ziler's and Ms. Infield's.  He offered no

           18     basis for finding of benefit to the government, because although

           19     he discussed a potential for IIM funds to be lost or stolen,

           20     again, that doesn't show a benefit to the government.  In short,

           21     Mr. Pallais added nothing to plaintiffs' case.

           22              And that was it, Your Honor.  There was no more in

           23     plaintiffs' case-in-chief.  After 12 years of litigation,

           24     plaintiffs presented to you only six witnesses to establish

           25     their entitlement to billions and billions of dollars,

                                                                              1703



            1     58 billions of dollars -- $58 billion, to be exact.  Three of

            2     these witnesses did not present any evidence that actually

            3     addressed, let alone proved, the validity of the numbers within

            4     plaintiffs' claim, and the other three, Mr. Laycock, Mr. Miller,

            5     and Dr. Cornell, who when asked specifically disavowed any

            6     responsibility for or the ability to vouch for the numbers

            7     within plaintiffs' claim.

            8              Your Honor, no named plaintiffs testified in this case.

            9     There were no named plaintiffs or other IIM beneficiaries at

           10     this trial who testified that 70 percent of their money has been

           11     wrongfully withheld.  There was no credible explanation from the

           12     six witnesses who did testify as to why, for example, Tribal IIM

           13     should be considered as part of total collections but then not

           14     accounted for by plaintiffs when they calculated disbursements.

           15     Or why suddenly, for the first time, after 12 years of

           16     litigation, all Osage headright revenue should now be viewed as

           17     part of the individual IIM trust accounts.

           18              This is the first time, as far as we can tell from

           19     looking at all of the decisions in this case, that the matter of

           20     the Osage headrights has been addressed by this Court.  It

           21     certainly was not addressed related to the historical

           22     accounting.

           23              Nor did the six witnesses, Your Honor, offer, for

           24     example, any credible basis for plaintiffs' factual assumption

           25     that only current year revenues were ever disbursed throughout

                                                                              1704



            1     the history of the IIM system, or why that compounding effect

            2     that was addressed during the trial is appropriate in any way.

            3     And most certainly, Your Honor, none of them provided any

            4     factual basis to support plaintiffs' claim of a benefit to the

            5     government.  Plaintiffs clearly did not prove a reasonable

            6     approximation, as is the standard, to be disgorged as monetary

            7     relief.

            8              All of this nutates in favor of Your Honor granting the

            9     Rule 52(c) motion that we had earlier filed against plaintiffs,

           10     and that motion should be granted now.  At the time you first

           11     heard argument on the Rule 52(c) motion, you stated that you

           12     would not rule until the close of the evidence, and of course

           13     now, Your Honor, the evidence is closed.

           14              During the first argument you indicated that the

           15     government had the better of the argument regarding the

           16     $54 billion claim that the government had somehow benefitted

           17     from withholding IIM account funds, and you correctly stated

           18     that when you ultimately would review that motion, you would do

           19     so based on the record as it existed at the close of plaintiffs'

           20     case.

           21              That record, as I just summarized, requires granting

           22     this motion.  It should be granted at this time, Your Honor, not

           23     only because of the merits behind it that are clear, but also

           24     because there's no reason for the parties to prepare --

           25     especially as it relates to the benefit to the government claim,

                                                                              1705



            1     there's no reason for the parties to prepare and the Court to

            2     consider proposed findings of fact and conclusions of law on a

            3     claim for which plaintiffs have so clearly failed to present any

            4     credible evidence.  Absolutely no credible evidence, Your Honor,

            5     none.

            6              Turning from that motion, I would like to summarize for

            7     you what followed from the defendants' witnesses and what they

            8     established during our responsive case.  In contrast to the

            9     testimony plaintiffs offered the Court, we presented witnesses

           10     like Ms. Herman, Dr. Angel, and Mr. Rosenbaum, who personally

           11     reviewed the documents and explained reasonably where defendants

           12     numbers related to collections and disbursements came from, and

           13     how those numbers should be interpreted and used.

           14              We also presented the testimony of Dr. Scheuren, who,

           15     unlike Dr. Cornell and Dr. Palmer, correctly used all of the

           16     data available to him and rationally countered for the

           17     uncertainty of the mean number within his model by calculating a

           18     lower and upper confidence bound.

           19              Ms. Herman was defendants' first witness, as you'll

           20     recall.  She was uniquely qualified to testify about the flow of

           21     collections into and the disbursements out of the IIM system.

           22     Her testimony, as was summarized in her historical flow of funds

           23     chart pictured on the screen, was based on more than 11 years of

           24     detailed review and analysis of the IIM system.

           25              At the time of this trial, she and her team at FTI had

                                                                              1706



            1     mapped over 119 million transactions within the IIM system as

            2     part of their data completeness validation work, or DCV work, as

            3     you know it.  Her testimony should be accorded great weight

            4     because of that experience and that work with the actual

            5     documents.

            6              Ms. Herman explained in much detail the research and

            7     analysis performed by FTI to update the throughput information

            8     that had been in AR-171, and that is now presented in DX-371.

            9     She explained why AR-171 does not justify and cannot be

           10     reasonably relied upon to support a finding that $4 billion

           11     should have been paid into individual IIM accounts.

           12              For example, supported by the documents of record,

           13     Ms. Herman explained how Tribal IIM is tribal money and is not

           14     and never has been receipts into individual IIM accounts.  She

           15     explained that Tribal IIM is only a portion of all tribal money

           16     that has been collected and that has flowed through the IIM

           17     system over the years, and she addressed that specifically,

           18     Your Honor, at transcript pages 474 and 475.  And this, Your

           19     Honor, is why Ms. Herman has relied upon total collections and

           20     total disbursements to report the historical flow of funds

           21     through the IIM system.

           22              In contrast, plaintiffs include Tribal IIM and other

           23     tribal money in their collections, but fail to account for the

           24     Tribal IIM and other tribal money when it is disbursed as

           25     bookkeeping transfers.

                                                                              1707



            1              Ms. Herman also explained that a large part of the

            2     Osage headright revenues were not and never have been entered

            3     into the IIM system in any way because they are paid directly by

            4     the Osage with a check to the headright owners.  She explained

            5     that is why these funds should not be considered as collections

            6     into the IIM system, and why it is wrong for plaintiffs' model

            7     to include them as collections into the system.

            8              And Your Honor, you asked specific questions this

            9     morning about that.  You asked:  Why does the government show

           10     Osage data?  And it is, Your Honor, because, as she stated, as

           11     Ms. Herman stated, Osage funds do come into the IIM system, they

           12     are transferred for certain IIM accountholders, and we presented

           13     evidence of that.

           14              But her testimony also made clear that a vast majority

           15     of that does not ever enter into the IIM systems, and you'll

           16     recall one of the documents you saw yesterday from her volumes

           17     demonstrates this.  You'll recall, Your Honor, or you may

           18     recall, at least, that when her chart was up, she was asked, and

           19     where do the funds go, the Osage funds that are paid directly

           20     from the tribe?  And she stated, it would be off this chart, it

           21     would be another chart.

           22              So the reason we show Osage revenues is because

           23     Ms. Herman had to try to determine, and has determined, which of

           24     those funds were directed into IIM accounts.  These would be,

           25     for example, Your Honor, for minors or for incompetents, and she

                                                                              1708



            1     provided testimony to that effect.

            2              But what she also made clear, and I would like to draw

            3     the Court's attention to transcript pages 539 and 540, she also

            4     made clear that not all of the Osage annuity funds go into the

            5     IIM.  So there's a limited reason we, the government, have

            6     addressed those, because they are in limited circumstances part

            7     of the funds into individual IIM accounts.

            8              And if I could, I would just like to quote briefly some

            9     of the questions and answers on those pages I referred to.

           10     Ms. Herman testified that some component of the Osage annuity is

           11     transferred into the IIM system from the Tribal Trust system,

           12     and that's what I just told you.  The question was asked:  "And

           13     the Osage annuity that's in the Tribal Trust system, where does

           14     that go?"

           15              And he answered:  "The component that's not transferred

           16     into IIM is paid out directly from the Tribal Trust via checks."

           17              And the question was put:  "So those monies that paid

           18     out through the Tribal Trust system, do those dollars show up

           19     anywhere in Exhibit 371?"

           20              And she answered, "No, they do not."

           21              And the question was then put to her by Mr. Quinn:  "So

           22     what then is the Osage annuity column, Column C?"  And that was

           23     referring, Your Honor, to AR-171 and DX-371.

           24              And Ms. Herman answered:  "Only those monies that

           25     actually enter into the IIM system."

                                                                              1709



            1              So that's why we have addressed the Osage, that's why

            2     it was in AR-171 and that is why it's in DX-371.  And the

            3     volumes in DX-372 behind the first volume contain the workpapers

            4     and the contemporaneous documents that Ms. Herman used and

            5     examined to try to determine the distinction between Osage funds

            6     that went directly to Osage accountholders and those that came

            7     into the system.  And you saw yesterday during the

            8     cross-examination of Dr. Palmer exactly how that division

            9     occurred through the documentation itself.

           10              Now, moving on -- oh, another thing I want to point

           11     out, Your Honor.  It came up yesterday during the short

           12     arguments on the motion to intervene by the Osage, but it's

           13     important to keep in mind what this case, the Cobell case, is

           14     about, and what class is before this court.  And Mr. Quinn

           15     mentioned it, and I'll reiterate it.  The February 4th, 1997

           16     order certifying the class action specifically defined the class

           17     as present and former beneficiaries of Individual Indian Money

           18     accounts.  That does not include every individual Indian who

           19     ever received money, it involves present and former

           20     beneficiaries of Individual Indian Money accounts.  And that's

           21     what this case is about, that's what this case has been about

           22     since 1996.

           23              And again, what you won't see throughout the many

           24     opinions is any reference to the Osage revenues.  So that's why

           25     Ms. Herman considered it and this is the limitations to it.  It

                                                                              1710



            1     does not include all Osage funds.

            2              Moving on, Ms. Herman also testified that FTI's

            3     calculations of total disbursements in her DX-371, in her

            4     revised chart, includes all disbursements out of the IIM system.

            5     And that's a very important point, Your Honor.  This included

            6     many disbursements from the IIM system to tribes that Ms. Herman

            7     indicated could be identified by a, quote, "BB," end quote,

            8     notation within the contemporaneous documents, as well as the

            9     notation appearing in the TFAS and IRMS systems.

           10              THE COURT:  What do you say, Mr. Kirschman, to

           11     Mr. Dorris' assertion, and it's not only he who has made the

           12     assertion, that this notion of an IIM system is a construct of

           13     the government's case and that there isn't any such thing?

           14              MR. KIRSCHMAN:  That's flatly wrong.  What I will tell

           15     you is Ms. Herman designed that chart to try to help explain to

           16     the Court that the historic flow of money and where the money

           17     goes and where it does not go, she constructed that chart based

           18     on her 11 years of experience in reviewing, I believe it was

           19     119 million transactions.

           20              So that's just wrong.  That's not something we've made

           21     up.  And both in October and now, Your Honor --

           22              THE COURT:  Who used the term "IIM system" before

           23     Ms. Herman?

           24              MR. KIRSCHMAN:  I don't know.  I would have to look to

           25     see if it was used before.  I suspect it has been, because her

                                                                              1711



            1     review of the documents demonstrates the existence of such a

            2     system.  But there's no magic to the word "system."  What you

            3     have to look at is the evidence you saw in October and the

            4     evidence you heard and saw at this trial.  And what you could

            5     see yourself, Your Honor, are funds that went to Individual

            6     Indian Money accounts, and many funds that did not.  They came

            7     into the fund, into 14X-6039, but they were never intended to be

            8     received by individuals in their IIM accounts.

            9              Those are the facts.  That's what's been uncovered as

           10     the Department of Interior and its contractors, FTI, Morgan

           11     Angel, and others, have reviewed the actual documents.

           12              So IIM system, there's nothing magical about that.

           13     That describes the process, that describes the actual flow of

           14     money for the last 100 years.  But it makes a clear distinction,

           15     and this is the important distinction, between all the monies

           16     that enter into this system and those that were ever intended

           17     for Individual Indian Money accounts.  That's the important

           18     distinction for this court to keep in mind, and that's what

           19     Ms. Herman was explaining through her use of the historical flow

           20     of funds.

           21              But whatever name you put on it, the evidence speaks

           22     for itself.  The transactional histories show that not all funds

           23     collected as part of the IIM system were ever intended to be

           24     paid to the individuals.  Dr. Angel - and I'll speak to that

           25     shortly - also showed you historical examples where you had

                                                                              1712



            1     money coming in that was going to all types of different funds,

            2     including tribal funds, Tribal IIM that was not intended to go

            3     to the beneficiaries.  So that's the key point, Your Honor.  We

            4     shouldn't get hung up on that word "system."

            5              And as I was saying, Ms. Herman spoke to that BB

            6     notation within the contemporaneous documents as well as the

            7     fact that that notation appears on the TFAS and the IRMS

            8     systems, and you saw examples of that during her testimony.  She

            9     explained that these disbursements were not made by checks but

           10     were bookkeeping entries.  She presented an example of such a

           11     disbursement, and at least one of them was DX-481, and she

           12     explained it in detail.  This point, Your Honor, was also made

           13     clear in footnote five of DX-371; that is, the revised AR-171.

           14     Ms. Herman explained what disbursements included in her DX-371.

           15              She further explained that because these disbursements

           16     were not made by check, they were not accounted for by CP&R data

           17     and where therefore not accounted for as disbursements in

           18     plaintiffs' model, even though plaintiffs treated tribal

           19     transfers as revenue.

           20              In assuring that all disbursements from the IIM system

           21     were included in her DX-371, Ms. Herman relied on all available

           22     data, including the audited disbursements amounts that were

           23     captured in the electronic funds transfers and in these

           24     BB transfers.  Ms. Herman also explained that the numbers set

           25     forth in DX-371 for disbursements from 1887 to 1972 were based

                                                                              1713



            1     upon statistical analysis performed by NORC and historical data

            2     provided by Dr. Angel, which I'll address in a few minutes.

            3              In summarizing the results of FTI's work, Ms. Herman

            4     demonstrated how, taking into account the actual current balance

            5     of dollars held in the IIM system, which is reported as

            6     $423.7 million, Your Honor, the difference between the reported

            7     trust balances and the estimated average sum of all IIM system

            8     transactions is $158.7 million.  That is the amount which

            9     defendants have not yet been able to explain as of the time of

           10     this trial.

           11              And Ms. Herman also clarified - and this is an

           12     important point - that this amount most surely includes funds

           13     that are not intended to be posted to individual IIM accounts

           14     but are still included in the total IIM system.  The analysis

           15     leading up to that figure, to that $158.7 million figure, is set

           16     forth in great detail in not only DX-371 but DX-372, which are

           17     comprised of the volumes of supporting material that you saw,

           18     the volumes.  DX -372 includes FTI's detailed road map as to how

           19     figures were reached, as well as contemporaneous documents upon

           20     which it relied.

           21              Now, after Ms. Herman's testimony, Dr. Angel followed

           22     her.  His testimony is consistent with Ms. Herman's, and is

           23     credibly based on his years of research and review of hundreds

           24     and hundreds of historic documents.  Dr. Angel testified and

           25     showed the Court that historically the IIM system contained

                                                                              1714



            1     funds that were not intended for disbursement to individual IIM

            2     accounts.  You may recall, Your Honor, Dr. Angel pointed to, for

            3     example, cemetery funds, school funds, bid deposits,

            4     rehabilitation funds, and you'll recall wage deposits from the

            5     Civilian Conservation Corps.  These specific examples were at

            6     DX-485 and DX-487.

            7              Dr. Angel further testified that based on early

            8     historical documents, it was evident that at times much of the

            9     Osage revenue was paid directly to individual Osage Indians

           10     rather than going through the Individual Indian Money account

           11     system.  And again, that's what we just talked about, and

           12     Dr. Angel provided some documentation to show that was

           13     consistent in the past as well as in the present.

           14              Also, based on his review of approximately

           15     50 settlement packages and reports from Indian Service Special

           16     Disbursing Agents, Dr. Angel opined that system controls in the

           17     historical records reflect regularity and oversight of the

           18     IIM system throughout its history through 1951, making it less

           19     likely that any mistakes or leaks or accumulations in individual

           20     IIM accounts would go undetected.

           21              And finally, Your Honor, Dr. Angel explained to this

           22     court how we provided historical information to FTI and NORC for

           23     their use in calculating collections and disbursements into the

           24     IIM system.  Dr. Angel not only provided the historical

           25     documents themselves, but he also provided context for those

                                                                              1715



            1     documents, such as their limitations.  For example, he

            2     specifically noted to NORC that the 1922 receipts and

            3     disbursements figures was an outlier, and you recall that

            4     Dr. Scheuren later testified that he understood that to be a

            5     limitation on the 1922 data.

            6              Now, Your Honor, you have asked a question regarding

            7     the estimate that Dr. Angel provided FTI regarding the

            8     Tribal IIM.  I'm trying to find your question in my notes.  You

            9     said that struck you as a big round number, I believe were your

           10     words --

           11              THE COURT:  10 to 15 percent.

           12              MR. KIRSCHMAN:  -- and you asked if we were sticking to

           13     that number.  And we are, Your Honor.  We are.  I think his

           14     estimate was described earlier this afternoon as a guess, but it

           15     certainly was not a guess, Your Honor.  Dr. Angel answered the

           16     question about how he calculated that 10 to 15 percent in quite

           17     an amount of detail.  What he relied on was described in detail.

           18     That is found at page 842 of the transcripts, and that was on

           19     June 17th.

           20              Dr. Angel was asked how he calculated that 10 to

           21     15 percent, and he responded that he could certainly answer that

           22     question.  And if I may, because of the significance that's been

           23     attached to this, I would like to read this.  "What we did,"

           24     Dr. Angel said, "was we looked at documents we had collected

           25     over the years.  These included such documents as audit reports,

                                                                              1716



            1     such documents as Indian Trust Accounting Division accountings

            2     of Tribal Individual Indian Monies, these included a review of

            3     settled account packages, along with review of others in my

            4     office.  These included the 1991 report to Congress, the 1952

            5     report to Congress, the 1972 OSR audit."

            6              "These included a review," Dr. Angel continued, "of

            7     correspondence.  Our audit was also based on -- our estimate was

            8     also based on a review of the reports that showed how much money

            9     the United States Government lent to tribal enterprises from the

           10     period 1934 to 1949.  It was something like $13 billion, a

           11     little over $13 billion."  And he said, "We, Morgan Angel, took

           12     these estimates, we took this data, and I made an estimate.  And

           13     that's what it is, an estimate.  And my estimate was also based

           14     on the historical circumstances," and he went on to describe how

           15     he accounted for World War II as a historical event that had to

           16     be considered.

           17              So Your Honor, it wasn't a guess, it was an estimate

           18     that Dr. Angel provided to FTI based on his review of all of

           19     those documents.

           20              After Dr. Angel testified -- oh, and another point in

           21     that regard.  And the record will speak for this.  But based on

           22     our recollection, I believe on cross-examination Dr. Angel was

           23     shown one agency's two percent figure for one year.  And if

           24     that's the case, that lone document in no way should discredit

           25     Dr. Angel's testimony or that estimate.  His review was based on

                                                                              1717



            1     many years of documents, and he noted specifically at least a

            2     few of them in answering questions during his testimony.  So one

            3     document presented in isolation should not be enough to

            4     distract -- to detract from that number.

            5              Now, after Dr. Angel testified we presented the

            6     statistical analysis of Dr. Scheuren, and Dr. Scheuren explained

            7     how his multiple imputation analysis used available data to

            8     measure the uncertainty surrounding the point estimate of

            9     $158.7 million.

           10              Dr. Scheuren testified how he and his team at NORC

           11     undertook a statistical analysis using all available

           12     collections, disbursement balances, and Osage data over all the

           13     fiscal years to measure the uncertainty within the model.

           14     You'll remember this chart from Dr. Scheuren's testimony.  The

           15     point estimate developed by NORC's model for the IIM system

           16     balance that could not yet be explained represented a mean and

           17     was consistent with what DX-371 had demonstrated; while the

           18     information within DX-371 led to a calculation of $158.7 million

           19     within the IIM system that could not yet be explained, NORC's

           20     point estimate for that figure was very close, at $159.9

           21     million.

           22              Further, Dr. Scheuren explained that prior to the

           23     beginning of the trial, his team had determined that

           24     statistically, at a 95 percent level of confidence, the evidence

           25     demonstrated that the amount that could not be explained within

                                                                              1718



            1     the IIM system could be at worst no more than $365.7 million.

            2     And that is depicted on DX-464.

            3              However, you will recall - and Your Honor, you

            4     mentioned this as one of your questions - that it became

            5     apparent during Ms. Herman's cross-examination that certain

            6     annual data points provided by the Chavarria Dunne firm that

            7     NORC had relied upon as actual numbers were really estimates for

            8     a relatively small number of years.  And it was based on that

            9     information and with that recent knowledge that Dr. Scheuren

           10     moved his confidence levels within his model to adjust for the

           11     uncertainty related to that new information.

           12              And that shift in his model is depicted in DX-500 that

           13     was shown to you during Dr. Scheuren's testimony.  He explained

           14     that based on his view of the new information, a 97.5 percent

           15     upper bound would be an appropriate adjustment, and that

           16     adjustment to a 97.5 percent level of confidence resulted in

           17     Dr. Scheuren's estimate that no more than $409.8 million could

           18     be left unexplained by the missing data.

           19              Your Honor, this amount represents a difference -- the

           20     $409.8 million figure represents a difference between the upper

           21     bound depicted on DX-500 of 833.5, and the reported balance of

           22     423.7 million that was shown on DX-371.

           23              And with relation to this upper bound figure,

           24     Your Honor, Dr. Scheuren explained, quote, "Despite the

           25     weaknesses in the system and the length of time that these

                                                                              1719



            1     records have been produced, that's as bad as it gets."  And that

            2     testimony is at transcript page 974 through 976.

            3              Dr. Scheuren next testified about NORC's analysis of

            4     Dr. Cornell's model.  Dr. Scheuren testified that NORC used

            5     Dr. Cornell's model of linear interpolation to make a comparison

            6     model, but incorporated into Dr. Cornell's model all of the

            7     available data related to collections and disbursements.  Using

            8     the same model as Dr. Cornell, but with all available data

            9     points incorporated into it, resulted in a small, approximately

           10     $31.5 million, upward adjustment, to the $423.7 million reported

           11     in the IIM system.

           12              When Dr. Scheuren came back for a second day of

           13     cross-examination, he explained the significant differences

           14     between NORC's work using Dr. Cornell's model and Dr. Cornell's

           15     model.  He explained that NORC used all of the data pairs that

           16     provided receipt and disbursement information, whereas

           17     Dr. Cornell had used data only from certain years.  He also

           18     noted that NORC used total disbursement figures for a year that

           19     included such things as electronic funds transfers and transfers

           20     of tribal money, while Dr. Cornell had only relied upon CP&R

           21     data.

           22              After Dr. Scheuren was finished testifying, Your Honor,

           23     our next three witnesses each addressed plaintiffs' claim that

           24     the government had derived approximately a $55 billion benefit

           25     by withholding money and using that money for its own use.

                                                                              1720



            1     Together, these three witnesses completely and convincingly

            2     established that there's no factual basis for this

            3     benefit-to-the-government claim.

            4              Dr. Terry Kehoe was the first of these witnesses.  He

            5     demonstrated through his review of historical documents that for

            6     much of the IIM system's history, a large percentage of

            7     IIM funds were held outside of the Department of Treasury.  He

            8     explained that from 1989 -- I'm sorry, I have my years mixed up.

            9     From 1889 through 1933, very little money was held at Treasury.

           10     He also showed that from 1933 through 1966, while more funds

           11     were held in Treasury, that money was mostly in government

           12     securities.  And finally, Your Honor, Dr. Kehoe demonstrated

           13     that from 1966 until approximately 1985, there was again very

           14     little funds held at Treasury.

           15              The next witness, Jeffrey Hoge, was our first witness

           16     from the Department of the Treasury.  As director of the

           17     Accounting Systems Division within FMS, Dr. Hoge demonstrated

           18     detailed knowledge about the Treasury General Account and

           19     Treasury's Central Accounting System, two very different things.

           20              Based on his knowledge, Mr. Hoge explained the detailed

           21     reporting requirements that are followed to ensure that every

           22     dollar coming into the TGA is tracked to the penny.  Because of

           23     these strict tracking requirements, he explained how no cash can

           24     disappear from or leak out of the Cash Concentration System that

           25     moves the cash into the TGA in New York.  Nor could cash

                                                                              1721



            1     accumulate in the TGA from an unknown source or from any agency

            2     that did not identify where the cash came from.

            3              Mr. Hoge also explained the important distinction

            4     between cash that enters the Cash Concentration System to the

            5     TGA, and the fund amounts accounted for in Treasury's Central

            6     Accounting System.  This is a distinction that continues to be

            7     muddied by plaintiffs.  Funds within the Central Accounting

            8     System, such as the IIM funds in 14X-6039, are merely internal

            9     bookkeeping entries.

           10              Because of that, Your Honor, Mr. Hoge explained that

           11     the government does not benefit from a greater IIM fund balance

           12     within 14X-6039; instead, as the amount of funds in 14X-6039

           13     goes up, the government's liability goes up, and that fund

           14     balance does not increase the amount of cash that is in the TGA.

           15              Finally, Mr. Hoge explained that IIM accounts are

           16     treated differently from other fund accounts in the Central

           17     Accounting System because they are deposit fund accounts and

           18     they do not belong to the government.  They are not owned by the

           19     government.  Thus, Mr. Hoge explained they constitute a

           20     liability against the government and against the Treasury.  They

           21     are not treated as government funds and they are not included

           22     within the government's budget.

           23              After Mr. Hoge, Your Honor, Gary Grippo, the Deputy

           24     Assistant Secretary For Fiscal Operations and Policy, testified,

           25     and he has been employed by Treasury for 16 years.  Mr. Grippo

                                                                              1722



            1     testified that for the last fiscal year, the amount of the

            2     federal government's budgetary receipts was approximately

            3     $2.6 trillion, and the government's outlays were even greater

            4     than those receipts.

            5              THE COURT:  We know that.

            6              MR. KIRSCHMAN:  Sadly.  Mr. Grippo examined the total

            7     revenues then into the IIM system for the year 2007 as he was

            8     shown Plaintiffs' Attachment A.  That amount stated in

            9     Attachment A was $336 million.  Mr. Grippo testified that this

           10     $336 million in the IIM system would not factor into Treasury's

           11     borrowing decisions.

           12              He explained that the government's scale of borrowing

           13     is such that relatively marginal amounts like $500 million on a

           14     given day would not impact how Treasury borrows, let alone an

           15     annual figure, an annual figure of $336 million.  In fact, he

           16     explained that Treasury's financing group makes decisions on

           17     what to borrow in billion-dollar increments, and that the amount

           18     of IIM revenues would not have any effect on Treasury's

           19     decisions about whether or how much to borrow.

           20              Mr. Grippo further testified that Treasury's financing

           21     group has no knowledge of IIM, and even if the information were

           22     to be provided to them, it would make no difference in the

           23     borrowing decisions the financing group makes.

           24              Mr. Grippo also testified that cash in investments held

           25     outside Treasury, like the IIM funds that Interior deposits in

                                                                              1723



            1     or invests in commercial banks, is cash that Treasury is not

            2     controlling and thus plays no role in any borrowing decisions.

            3     It is money that Treasury does not even consider available to

            4     it.

            5              This testimony from these very credible three

            6     witnesses, Dr. Kehoe, Mr. Hoge, and Mr. Grippo, read together

            7     establish beyond any reasonable dispute that there is no basis

            8     for plaintiffs' benefit-to-the-government claim.  And plaintiffs

            9     offered no one, no one in their rebuttal case to refute them.

           10              Our last three witnesses, Your Honor, completed

           11     defendants's responsive case by demonstrating that the evidence

           12     of record does not support a conclusion that 30 percent of the

           13     money that should have been disbursed to IIM beneficiaries was

           14     not disbursed.

           15              You will recall, Your Honor, that Ali Mushtaq at NORC

           16     and Frank Banda of the Resnick Group testified regarding the

           17     Treasury and GAO settlement packages.  Consistent with

           18     Dr. Angel's earlier opinion regarding these settlement packages,

           19     Mr. Mushtaq and Mr. Banda showed evidence that supports the

           20     conclusion that through 1951, there was an orderly review

           21     process in place by an outside agency that led to detailed

           22     scrutiny of the IIM records.

           23              Mr. Banda explained the two-tiered review process that

           24     the IIM transactional information went through, and opined that

           25     based on the Resnick Group's review, there was a thorough review

                                                                              1724



            1     of the IIM records performed from 1890 through 1951.

            2              Your Honor, our final witness, Joseph Rosenbaum, was a

            3     very significant witness.  And it's Mr. Rosenbaum who reviewed

            4     in detail the histories of the named plaintiffs and their

            5     designated predecessors.  It is these named predecessors who are

            6     representative of this class as a whole; a class, by the way,

            7     again, that includes present and former beneficiaries of

            8     Individual Indian Money accounts.

            9              Now, what Mr. Rosenbaum found debunks any serious

           10     argument that significant amounts of money that should have been

           11     disbursed into individual IIM accounts was not.  He showed that

           12     through portions of his earlier work, and these were marked as

           13     DX-515.

           14              DX-515 sets out some of Mr. Rosenbaum's most relevant

           15     findings.  Over 12,600 transactions totaling $1.1 million were

           16     examined by Ernst & Young.  These transactions were located in

           17     IIM ledgers and account statements, and in IRMS and TFAS data.

           18     Reconstructed transactions, and you recall, or you may recall

           19     Mr. Rosenbaum spoke to those briefly, were not part of the

           20     analysis of the over 12,600 transactions found in the ledger

           21     information.

           22              As you can see from DX-515, total receipts, including

           23     both collections and interest, totaled $560,017.08.

           24     Disbursements for that same time period for the accounts

           25     reviewed of the named plaintiffs and their predecessors equalled

                                                                              1725



            1     $557,219.08.  The very small difference between these total

            2     receipts and total disbursements for the representative named

            3     plaintiffs was $2,798.  And that does not mean, Your Honor, that

            4     this amount was not later disbursed, but it does show that at

            5     the time of this analysis, that difference was under $3,000.

            6              Although Ernst & Young did not calculate a disbursement

            7     rate, Your Honor, looking at these figures and doing the math

            8     reveals that 99.5 percent of the total receipts posted to these

            9     accounts were disbursed from those accounts.

           10              Those, Your Honor, are the numbers, that is the

           11     evidence we have regarding the representative named plaintiffs,

           12     those are the facts that have been established.  With the

           13     credible numbers provided by Ms. Herman, Dr. Angel, and

           14     Dr. Scheuren, these are the numbers that refute plaintiffs'

           15     claims for billions and billions of dollars.

           16              And Your Honor, plaintiffs' rebuttal case certainly did

           17     not in any way detract from the numbers defendants presented to

           18     you.  At our last pretrial conference on June 2nd, Your Honor,

           19     you offered plaintiffs the opportunity to put on an expanded

           20     rebuttal case.  You stated that although it might not be

           21     rebuttal, strictly speaking, because of the circumstances

           22     leading up to the trial, you would allow plaintiffs to put on

           23     any of their may call witnesses to respond to the witnesses we

           24     offered in our responsive case.

           25              Plaintiffs did not do that.  Instead, after having put

                                                                              1726



            1     on only six witnesses during their case-in-chief, none of whom

            2     established a factual foundation for plaintiffs' claim for

            3     billions of dollars, plaintiffs chose instead to call only

            4     Dr. Palmer.  And Dr. Palmer as an expert witness did not and

            5     could not establish any facts necessary to prove plaintiffs'

            6     case.

            7              As you heard yesterday, even in his model that

            8     purported to use the data that we had provided during the course

            9     of the trial, Dr. Palmer, at the direction of plaintiffs, was

           10     still being selective in the data he would use, and would

           11     repeatedly substitute his own estimates instead of relying on

           12     the available data, instead of relying on the actual numbers

           13     found within the documents.

           14              He, like Dr. Cornell, summed data from a document but

           15     would then disregard data from another available document.  And

           16     the clearest example of that was Dr. Palmer's adjustment of the

           17     1955 disbursements amount found in the 1955 Comptroller

           18     General's report, and that is at Plaintiffs' Exhibit 53.

           19     Dr. Palmer had absolutely no information that justified his view

           20     that the internal control shortcomings mentioned in the report

           21     could somehow be interpreted and then quantified to mean that

           22     actual disbursements are approximately 74.5 percent of the

           23     reported amount.  But that is what he did in his calculations.

           24              As they did with Dr. Cornell, plaintiffs again had

           25     Dr. Palmer use unfounded assumptions in plugging numbers into

                                                                              1727



            1     his model.  Dr. Palmer's adjustment of data for 1972 and 1987 --

            2     1972 through 1987 and 2003 through 2007, where he used his

            3     134.1 percent analysis, you recall this from yesterday, that

            4     adjustment effectively reduced disbursements to close to

            5     75 percent of the reported amounts.

            6              In doing this, Dr. Palmer rejected actual reported

            7     disbursement data generated by business records, and in the case

            8     of the time period 2003 to 2007, amounts that were reported in

            9     audited financial statements.

           10              Also, Your Honor, plaintiffs' disbursement rate

           11     understates disbursements made by check by over six percent.

           12     You may recall that plaintiffs' evaluation of the CP&R data for

           13     fiscal year 1999 resulted in an incorrect assumption that only

           14     93.68 percent of checks issued throughout the history of the

           15     IIM Trust were cashed.  That assumption is contradicted by the

           16     evidence of record, evidence that is both in the record of the

           17     October trial and in this trial, Your Honor.  Plaintiff's six

           18     percent discount for check disbursements understates total

           19     disbursements by approximately $900 million.

           20              And Your Honor, this was another question you raised

           21     regarding CP&R data.  You asked the question -- I didn't have a

           22     chance to jot down the exact question, but you noted this

           23     six percent factor.  And I want to point out that we have

           24     briefed this issue, at least in part, in our April brief where

           25     we addressed the evidence from October that demonstrates a more

                                                                              1728



            1     accurate rate related to the CP&R data.

            2              Now, Dr. Palmer also calculated what he called

            3     corrected revenues, and as we've already touched upon and as was

            4     addressed by witnesses throughout the trial, those are bloated

            5     with Osage headright revenue.  Dr. Palmer's model repeats the

            6     flawed analysis of Osage headright revenues that existed in

            7     Professor Cornell's model.  Dr. Palmer's decision to include

            8     virtually all of the payments, deducting only the 1.25 percent

            9     for the Osage Nation share, resulted in an inclusion of payments

           10     made directly from the Osage tribe account to annuitants.  And

           11     you will recall during the cross-examination of Dr. Palmer that

           12     this was demonstrated by examples, by documents in DX-372.

           13              Significantly, Dr. Palmer expressly agreed with the

           14     earlier testimony of Dr. Cornell that if the payments, quote,

           15     "never flowed through the IIM Trust, they should not have been

           16     included in their models."

           17              Using the amount in Palmer's model results in nominal

           18     overstatement of revenues in excess of $821 million.  Both

           19     Dr. Palmer and Dr. Cornell agreed that such an overstatement

           20     translated to an excess of $11 billion after adding their

           21     interest calculations.

           22              Regarding Tribal IIM and all other tribal funds,

           23     Dr. Palmer includes them as collections but then does not

           24     recognize the disbursement of these tribal funds because he uses

           25     only CP&R and PACER data.  These disbursements you will recall

                                                                              1729



            1     are not paid by check, but by a bookkeeping entry; for example,

            2     BB transfers are journal entries representing approximately

            3     20 percent of disbursements, and both Dr. Palmer and Dr. Cornell

            4     failed to consider these in deriving their low disbursement

            5     rates.  And something to point out, again, DX-371 expressly

            6     indicated in footnote five how Ms. Herman was considering these

            7     transfers.

            8              This flaw in both Dr. Palmer's and Professor Cornell's

            9     analysis provides much of the explanation for Dr. Palmer's

           10     decision to discount disbursements for 1972 and 1987, and for

           11     2003 through 2007 using his 134.1 percent ratio analysis that we

           12     heard about yesterday.

           13              Finally, Dr. Palmer's model, as had Dr. Cornell's,

           14     assumes that only current year revenues were not disbursed

           15     during the history of the IIM system, and there is simply no

           16     factual foundation for that assumption.  But as a result of it,

           17     there's a compounding effect that inflates plaintiffs' claim

           18     dramatically.

           19              Those, Your Honor, are only a few of the flaws in

           20     Dr. Palmer's model.  In our proposed findings of fact we will

           21     address more in more detail, and address these in more detail

           22     with more explanation.

           23              I want to address now the issue of interest that

           24     really -- and we addressed part of this yesterday.  In our view,

           25     you may recall, we objected to the claim, the alternate claim

                                                                              1730



            1     now for interest as specific relief.  This was a matter not

            2     before raised, and it is something that is, one, clearly a legal

            3     issue, and two, one that as a result we will clearly address in

            4     our conclusions of law.

            5              But let me just say this about it:  Plaintiffs have

            6     cited the interest provisions in the 1994 Act, 25 U.S.C. 401.

            7     If you look at the terms of that you will see that it talks

            8     about a claim being paid as a result of a reconciliation process

            9     and a claim being identified by an individual who had to present

           10     information or documents to the Secretary, and then, through the

           11     reconciliation, an amount would be paid.

           12              That is not this case.  That provision, 4012 -- and

           13     again, we will brief this more, and I should point out, Your

           14     Honor, we also have -- we have briefed this in our April 9th

           15     brief, our pretrial brief to the Court.  But those provisions

           16     dealing with interest are not applicable here.

           17              In our brief on April 9th, for example, we point out in

           18     footnote 54 that there was a -- I'm sorry, strike that.  So we

           19     will address that further.

           20              But the provision cited now and not addressed by any

           21     witness, nor should they have because it's a legal issue, do not

           22     provide a basis to award interest.

           23              Mention was also made regarding the 1841 act which is

           24     currently at 31 U.S.C. 9702.  And that 1841 act, Your Honor,

           25     does not apply to IIM accounts.  We will establish that.  One

                                                                              1731



            1     thing we cited in our April brief in footnote 54 was in the

            2     1991 Comp General opinion, which stated specifically that

            3     Section 162 does not require a payment of interest.  So there's

            4     no historical basis to find that interest was due based upon

            5     certainly the 1841 account -- the 1841 statute.

            6              What we will present to the Court, for example, is a

            7     statute, I believe in 1936, that specifically made it clear that

            8     that provision does not apply to Individual Indian Money funds.

            9              So Your Honor, in summary, now that the trial is

           10     concluded and the witnesses have had their turn, it is clear

           11     that plaintiffs did not carry their burdens of proof.  After

           12     12 years to prepare for this trial, a trial in which they are

           13     seeking billions and billions of dollars, plaintiffs presented

           14     the thinnest of cases possible.  They presented six witnesses,

           15     five of whom had no personal knowledge or probative evidence to

           16     offer to support the plaintiffs' burden, and their first expert,

           17     Dr. Cornell, who offered at best numbers that he himself

           18     admitted required refinement and modifications.  These six

           19     witnesses offered no affirmative proof to support a claim for

           20     $58 billion or $47 billion.

           21              Further, even if this Court were to consider their sole

           22     rebuttal witness, Dr. Palmer, the evidence presented by that

           23     witness proved to be as defective as the witness he replaced,

           24     Dr. Cornell, for the reasons I just gave you and for reasons we

           25     will explain in further detail with the findings of fact.

                                                                              1732



            1              On the basis of this shallowest of cases, Your Honor,

            2     plaintiffs request that this Court enter an award that would in

            3     some manner, a manner as yet still undefined by plaintiffs, set

            4     the stage for one of the largest awards of relief ever entered

            5     by a court.  Given their utter failure to provide factual

            6     evidence to support their claim, this Court should firmly and

            7     quickly reject that request.

            8              Plaintiffs have wholly failed to establish a reasonable

            9     approximation of any amount to be disgorged.  Certainly by no

           10     stretch of the imagination have plaintiffs come close to meeting

           11     their burden as described in the Court's May 2nd, 2008 pretrial

           12     order.  They have failed to present a credible case for relief,

           13     much less one that could be used to create the means for them to

           14     recover hundreds of millions or even billions of dollars.

           15              For that reason, the Court should grant our Rule 52(c)

           16     motion for judgment against plaintiffs.  Should the Court

           17     decline to grant our motion and adhere to its intention to enter

           18     a decision in which a number is placed behind a dollar sign,

           19     your review of the testimony and evidence presented in our

           20     rebuttal case can lead or should lead to only one conclusion,

           21     that the government's witnesses and documents clearly and

           22     convincingly refuted plaintiffs' claim for 49 or 47 billion

           23     dollars.

           24              As you've heard repeatedly, Your Honor, given more

           25     time, defendants could perform more work that would reduce the

                                                                              1733



            1     amount of unexplained monies within the IIM system even further

            2     than we did at this trial.  However, even at this point in time,

            3     with the limited amount of time and resources defendants have

            4     had to address the Court's inquiries, the credible evidence and

            5     testimony demonstrates that the difference between the current

            6     reported ending balance of the IIM system and the average

            7     statistical estimate of the ending balance is $158.7 million.

            8              Further, employing a confidence level of 97.5 percent

            9     to account for the information developed during the trial,

           10     Dr. Scheuren's statistical analysis credibly established that at

           11     worst no more than $409.8 million cannot be explained within

           12     that IIM system.  And, Your Honor, as Ms. Herman testified, this

           13     unexplained amount of funds within the IIM system undoubtedly

           14     includes amounts more than just the Individual Indian Money

           15     account monies.

           16              With that in mind, Your Honor, to the extent your

           17     decision will include an amount next to a dollar sign, it should

           18     be a low amount indeed.

           19              THE COURT:  Thank you, Mr. Kirschman.  I keep doing

           20     this.  I'm sorry about this.  But you keep saying, "if we had

           21     enough time."  I'm going to quote four lines of poetry:  "At my

           22     back I always hear at times winged chariot hurrying near and

           23     yonder.  All before us lie deserts of vast eternity."

           24              If you know bluegrass, you'll know where that poem

           25     comes from.

                                                                              1734



            1              Does the Osage Nation have anything to say this

            2     afternoon?

            3              MR. GODFREY:  Yes, Your Honor.

            4              THE COURT:  I'll be happy to hear from you, sir.

            5              MR. GODFREY:  Thank you.  Merrill Godfrey on behalf of

            6     the Osage Nation.

            7              THE COURT:  Mr. Godfrey.

            8              MR. GODFREY:  The Osage Nation's position in this case

            9     turns on the government's duty here, and the government's duty

           10     is to disburse the funds that it was required to hold on behalf

           11     of individual Indians.

           12              The Osage have a hybrid system, and explaining that

           13     system very briefly I think will shine some light on what the

           14     government's duty in this case is and how the award should be

           15     measured.

           16              The Osage mineral estate is a tribal asset, and for a

           17     time the mineral income is held on behalf of the tribe.  That's

           18     specified by statute.  There is a time when those funds are

           19     required by statute to be segregated into individual shares and

           20     distributed to the headright owners.  It is at that time that

           21     those funds are required by statute to be held on behalf of

           22     individual Indians.

           23              So the Osage funds do come into the picture of the

           24     government's duty in this case; the question is when.  And under

           25     the 1906 Act, the individual headright owners have a right to a

                                                                              1735



            1     quarterly distribution at the end of the fiscal quarter.  The

            2     distribution historically has taken one of two forms.  One form

            3     is a transfer to the IIM accounts of individual Osage headright

            4     owners; the other, which has been alluded to by the government,

            5     is a distribution by check directly to the Osage headright

            6     owner.

            7              The government's distinction between the funds that

            8     went into what they call the IIM system and the funds that were

            9     distributed by check is formalistic, and they've offered no

           10     basis for the decision to distribute some of the funds through

           11     check as opposed to putting them into accounts for individual

           12     Indians.  Under statute, the obligation is at the end of the

           13     fiscal quarter to segregate those funds and to hold them on

           14     behalf of individual headright owners.  The government should

           15     not get off the hook by saying, well, we decided to cut checks

           16     to some of these people for reasons we haven't explained.

           17              Therefore, the Osage Nation's position is that all of

           18     the funds that were required to be distributed to headright

           19     owners were required by statute to be held in trust for

           20     individual Indians, and that that amount of money should have

           21     been disbursed.  And to the extent that it was not, those monies

           22     should be part of a restitutionary award in this case.

           23              At all times before the distribution specified by

           24     statute at the end of the fiscal quarter, the funds are held on

           25     behalf of the Osage tribe.  Statute specifies that royalties are

                                                                              1736



            1     collected for the tribe, the royalties are owned by the tribe,

            2     and that Congress can appropriate out of those funds to provide

            3     for tribal purposes, such as historically the education of Osage

            4     children, improvements that benefit the tribe as a whole, and

            5     similar purposes.  It is only at the end of the fiscal quarter

            6     that the headright amount is calculated out of the remainder.

            7              Admittedly, the amount that is used for tribal purposes

            8     is very limited, and the Osage Nation views seriously its role

            9     of protecting as much of the funds as it can to be distributed

           10     to the headright owners at the end of the fiscal quarter.  The

           11     Osage Nation has no discretion, as has been pointed out, under

           12     statute to appropriate funds on its own for statutory -- excuse

           13     me.  Congress specifies how much of the headright revenue is

           14     subject to the discretion of the Osage Nation for certain

           15     expenses.  So the headright owners do have a right to that

           16     distribution, but the right begins at the end of the fiscal

           17     quarter.

           18              Now, this is not a formalistic distinction, from the

           19     Osage Nation's perspective.  It's a very important one, because

           20     it historically has been very important to the tribe that the

           21     mineral estate has remained a tribal asset, a collective asset,

           22     even though it is individuals who eventually receive the income.

           23     That's particularly important for the headright owners

           24     themselves, because the sovereign government of the Osage Nation

           25     is the protector of the headright owner's right to receive those

                                                                              1737



            1     distributions.

            2              With respect to the monies that were held on behalf of

            3     the tribe, the Osage Nation currently has a damages claim in the

            4     Court of Federal Claims, and that's another reason why this is

            5     not a formalistic distinction.  The individual's right to the

            6     money begins at the end of the fiscal quarter when the right to

            7     a distribution arises.

            8              THE COURT:  Where does the damages claim stop and the

            9     equitable claim in this court begin?

           10              MR. GODFREY:  At the time that the statute specifies

           11     for the distribution, which is the end of the fiscal quarter.

           12     So to the extent that the evidence shows that monies should have

           13     been distributed to Osage headright owners, that money should go

           14     into the input side of the equation in this case.

           15              THE COURT:  And what if there's no evidence specific to

           16     that point, but the evidence is only aggregated among and across

           17     all Indians and all tribes?

           18              MR. GODFREY:  I think the --

           19              THE COURT:  The suggestion of the plaintiffs -- and

           20     they've been very careful to say any award would be distributed

           21     as the Court would direct, but their suggestion is that the

           22     award should be distributed per capita.

           23              MR. GODFREY:  Well, to the extent that the records show

           24     that funds were owed to Osage headright owners, there's no

           25     reason to award those funds per capita to all other Indians.  I

                                                                              1738



            1     understand that to the extent there's not evidence that funds

            2     were held for any particular Indian, that the Court would

            3     approximate by doing a per capita distribution.

            4              But in this case, because the Osage Nation has a

            5     special system, and because, as evidenced by some of the reports

            6     that the government has been able to produce, there is a

            7     separate system for the Osage --

            8              THE COURT:  Well, I suggest that when you file whatever

            9     you're going to file, and you will have the opportunity to file

           10     on the same schedule as the other parties here, Mr. Godfrey,

           11     that you be as precise as you can about the nature of your

           12     damages claim and how it impacts and how it may be prejudiced

           13     and how it -- where its boundaries are as distinct from the

           14     boundaries of the plaintiff class claim in this case.

           15              MR. GODFREY:  Yes.  Thank you, Your Honor.

           16              THE COURT:  Thank you very much.  Mr. Dorris, you want

           17     to give a rebuttal but I don't have time for a rebuttal.

           18              MR. DORRIS:  Your Honor, I have two points, one

           19     administrative, one substantive, and I can do it in less than

           20     one minute.

           21              THE COURT:  I'll hear your administrative point.

           22              MR. DORRIS:  Okay.  It's reported to me that the docket

           23     shows the findings of fact and conclusions of law to be due on

           24     July 8th.  I understood from yesterday --

           25              THE COURT:  No, we're going to talk about that.

                                                                              1739



            1              MR. DORRIS:  If I get it done in 30 seconds?

            2              THE COURT:  30 seconds.

            3              MR. DORRIS:  Your Honor, a large number should not

            4     cause this court to turn away from justice.  As the DC Circuit

            5     said in --

            6              THE COURT:  I thought you had a substantive point.

            7     That sounds like a rhetorical point to me, Mr. Dorris.

            8              MR. DORRIS:  Well, I may have misspoken, Your Honor.

            9              THE COURT:  All right.  Your 30 seconds are running.

           10              MR. DORRIS:  The DC Circuit said in 2005 at 414 F.3d

           11     13, in the Medicare reimbursement litigation, quote, "Having to

           12     pay a sum one owes can hardly amount to an equitable reason for

           13     not requiring payment."

           14              Your Honor, the amount is high but the years have been

           15     many.  Thank you.

           16              THE COURT:  Thank you, sir.

           17              MR. KIRSCHMAN:  Your Honor --

           18              THE COURT:  How many seconds do you want,

           19     Mr. Kirschman?

           20              MR. KIRSCHMAN:  45 seconds.

           21              THE COURT:  You've got 30.

           22              MR. KIRSCHMAN:  This is in response to counsel for

           23     Osage.  Counsel for Osage suggests that the government is making

           24     a formalistic distinction between tribal funds and IIM funds,

           25     and that is not the case.  The only claim here is related to IIM

                                                                              1740



            1     funds.

            2              And in fact, I want to point to the Court, in my

            3     15 seconds left, the transcript at 163, where Ms. Infield

            4     herself testified not that Osage revenues are classified as

            5     funds in Treasury's IIM account, but that the Osage headright

            6     revenues are classified as funds in an Osage annuity account

            7     within Treasury.

            8              These are two different cases, two different sets of

            9     plaintiffs, and they should not be merged here at the 11th hour.

           10              THE COURT:  Okay.  I'm sure this is all going to be

           11     clarified for me in the findings of fact.  Now, proposed

           12     findings and conclusions are due from all parties,

           13     simultaneously or whenever they get around to filing them, on

           14     the date of July 11th.  I have told you that we are operating on

           15     a tight schedule, frankly, for the efficient use of the

           16     resources of this court.  And accordingly, oppositions, that is

           17     responses of any kind, will be due 10 days, 10 calendar days,

           18     later on July 21st.

           19              And that will be all the briefing that we will

           20     entertain before we issue a ruling.  That ruling will be issued,

           21     I say, and I hope I will not be guilty, like Mr. Dorris, of

           22     having misspoken, will be issued within the month of August.

           23              Now, a couple of closing observations.  I have been

           24     very interested in the summaries and arguments of both sides,

           25     which continue the high level of professionalism and excellence

                                                                              1741



            1     that I've heard all through this trial.  I hope that your

            2     proposed findings and conclusions will give me concisely, but

            3     will give me whatever guidance you can on the standards of proof

            4     in equity.  Because it is absolutely true that whatever award is

            5     issued in this case has to be made on the basis of statistics,

            6     interpolations, estimates, some of you call it guesses.  There

            7     is very little hard data on which to base an award that covers

            8     120 some years of collections and disbursements by the

            9     government.

           10              And by the way, a lot of what we've seen during this

           11     trial deals with modern era and relatively modern era account

           12     numbers and accounting techniques, and I have no idea whether

           13     14X-6039 existed before 1920 or 1910.  Nobody has told me that.

           14              And we have no idea about accounting systems.  We're

           15     pulling numbers out of reports and aggregate numbers here and

           16     there, and somehow making them into numbers.  It is a very, very

           17     difficult process that if this were a damage case, and there is

           18     no court in the country that would award damages on the basis of

           19     what we've heard here, because it would be called remote and

           20     speculative in any court of law that is considering a damages

           21     award.

           22              Equity, equity is a different animal.  And we are

           23     sitting as a court of equity, and we will have to make a

           24     decision on the -- the best decision we can.  But I need some

           25     help from both sides on the question of just how much -- what I

                                                                              1742



            1     want is the maxim that says equity loves guesswork, or hates

            2     guess work.  You know, give me either way.

            3              Second, on Mr. Kirschman's repeated raising of his

            4     Rule 52(c) motion, which as I remember it at the close of the

            5     plaintiffs' case didn't govern the whole award, it governed the

            6     benefit-to-the-government award, I continue to believe that the

            7     government has the better argument here.  I am not going to rule

            8     on it now because the plaintiffs have not responded to it

            9     formally in writing, nor have they really had a chance to do so.

           10     And they may do so either separately by a response to the 52(c)

           11     motion or they may do it as part of their proposed findings and

           12     conclusions of law.

           13              What I am frankly concerned about is the expectations

           14     that have been built up here, by repetition in the press and by

           15     the plaintiffs, of an award that is in 11 digits.  I have to

           16     tell you, from where I sit today, it looks like the dispute in

           17     this case is between 10 digits and nine digits.

           18              I think the burden of proof lies with the plaintiffs on

           19     the benefit-to-the-government claim, as I have indicated in

           20     earlier court filings, including a reference to that Indiana Law

           21     Review article that the plaintiffs showed part of on the screen

           22     today.  And my instinct - and I need help from the parties in

           23     the briefs on this - my instinct is that the standards of proof

           24     for benefit to the government would be more rigorous than the

           25     standards of proof on the underlying disgorgement award.

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            1              I have no requirements to announce about the content of

            2     your proposed findings and conclusions of law.  I do not want to

            3     get into the business of playing with a spreadsheet myself.

            4     That way lies all kinds of potential error.  But there are a few

            5     sets of numbers in this case that we have talked about that seem

            6     to me to -- I would be interested to see how the spreadsheets

            7     worked with different numbers.

            8              I would be interested to see how the spreadsheet works

            9     if Mr. Angel -- if Dr. Angel's 10 to 15 percent IIM number were

           10     something dramatically different.  I mean, just for the sake of

           11     discussion, what if it were two percent all the way through

           12     instead of 10 to 15 percent?

           13              I would be interested to see how the spreadsheets would

           14     work if all the payments to annuitants were backed out of the

           15     spreadsheet, and without prejudice to Mr. Gregory's (sic) point,

           16     if it were held that the Osage headrights -- the Osage headright

           17     monies were not in fact monies held for the account of IIM

           18     accountholders.

           19              I would be interested to see how the spreadsheet worked

           20     if Dr. Palmer's 75 percent number -- how sensitive the

           21     spreadsheet is to adjustments of that number, which particularly

           22     in the 2002 to 2007 era seemed to me to be almost self-evidently

           23     way off.

           24              And I would be interested to see how sensitive the

           25     spreadsheet analyses are to a different check clearing or check

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            1     cashing number.

            2              You-all may have different ways of presenting different

            3     numbers in the spreadsheets, but what I'm suggesting is that

            4     among the materials that you present on July 11th, or in

            5     response on July 21st, that you take into realistic account the

            6     disputes that the parties have had about these various numbers,

            7     and make some demonstration of how the spreadsheet would react

            8     if the numbers were different.  I don't care how many

            9     combinations and permutations you present, but those are at

           10     least some of the numbers that I think are questionable and need

           11     to be considered.

           12              I think I'll stop right there.  Once again, counsel, I

           13     want to thank everybody for their patience and their relative

           14     good humor during this long procedure.  Well tried case, great

           15     laptops, we're adjourned.

           16              (Proceedings adjourned at 4:57 p.m.)

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            1                 CERTIFICATE OF OFFICIAL COURT REPORTER

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            3              I, Rebecca Stonestreet, certify that the foregoing is a

            4     correct transcript from the record of proceedings in the

            5     above-entitled matter.

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            9     _______________________________              _________

           10     SIGNATURE OF COURT REPORTER                  DATE

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