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PROPOSED SETTLEMENT OF THE 

COBELL V. SALAZAR LITIGATION 

OVERSIGHT HEARING 

BEFORE THE

COMMITTEE ON NATURAL RESOURCES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

Wednesday, March 10, 2010 

Serial No. 111-46 

Printed for the use of the Committee on Natural Resources 

( 

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html 

or 

Committee address: http://resourcescommittee.house.gov 

(II) 

COMMITTEE ON NATURAL RESOURCES 

NICK J. RAHALL, II, West Virginia, Chairman 

DOC HASTINGS, Washington, Ranking Republican Member 

Dale E. Kildee, Michigan 

Eni F.H. Faleomavaega, American Samoa 

Frank Pallone, Jr., New Jersey 

Grace F. Napolitano, California 

Rush D. Holt, New Jersey 

Rau ́l M. Grijalva, Arizona 

Madeleine Z. Bordallo, Guam 

Jim Costa, California 

Dan Boren, Oklahoma 

Gregorio Sablan, Northern Marianas 

Martin T. Heinrich, New Mexico 

George Miller, California 

Edward J. Markey, Massachusetts 

Peter A. DeFazio, Oregon 

Maurice D. Hinchey, New York 

Donna M. Christensen, Virgin Islands 

Diana DeGette, Colorado 

Ron Kind, Wisconsin 

Lois Capps, California 

Jay Inslee, Washington 

Joe Baca, California 

Stephanie Herseth Sandlin, South Dakota 

John P. Sarbanes, Maryland 

Carol Shea-Porter, New Hampshire 

Niki Tsongas, Massachusetts 

Frank Kratovil, Jr., Maryland 

Pedro R. Pierluisi, Puerto Rico 

Vacancy 

Don Young, Alaska 

Elton Gallegly, California 

John J. Duncan, Jr., Tennessee 

Jeff Flake, Arizona 

Henry E. Brown, Jr., South Carolina 

Cathy McMorris Rodgers, Washington 

Louie Gohmert, Texas 

Rob Bishop, Utah 

Bill Shuster, Pennsylvania 

Doug Lamborn, Colorado 

Adrian Smith, Nebraska 

Robert J. Wittman, Virginia 

Paul C. Broun, Georgia 

John Fleming, Louisiana 

Mike Coffman, Colorado 

Jason Chaffetz, Utah 

Cynthia M. Lummis, Wyoming 

Tom McClintock, California 

Bill Cassidy, Louisiana 

James H. Zoia, Chief of Staff 

Rick Healy, Chief Counsel 

Todd Young, Republican Chief of Staff 

Lisa Pittman, Republican Chief Counsel 

(III) 

CONTENTS 

Page 

Hearing held on Wednesday, March 10, 2010 ....................................................... 1 

Statement of Members: 

Cassidy, Hon. Bill, a Representative in Congress from the State of 

Louisiana ....................................................................................................... 28 

Christensen, Hon. Donna M., a Delegate in Congress from the Virgin 

Islands ............................................................................................................ 8 

Faleomavaega, Hon. Eni F.H., a Delegate in Congress from American 

Samoa ............................................................................................................ 6 

Grijalva, Hon. Rau ́l M., a Representative in Congress from the State 

of Arizona ...................................................................................................... 8 

Hastings, Hon. Doc, a Representative in Congress from the State of 

Washington .................................................................................................... 3 

Kildee, Hon. Dale, a Representative in Congress from the State of 

Michigan ........................................................................................................ 5 

Prepared statement of ............................................................................... 5 

Napolitano, Hon. Grace F., a Representative in Congress from the State 

of California ................................................................................................... 7 

Rahall, Hon. Nick J., II, a Representative in Congress from the State 

of West Virginia ............................................................................................ 1 

Prepared statement of ............................................................................... 2 

Statement of Witnesses: 

Cobell, Elouise C., Lead Plaintiff in Cobell v. Salazar, Browning, 

Montana ......................................................................................................... 50 

Prepared statement of ............................................................................... 53 

Class Action Settlement Agreement dated December 7, 2009 .............. 57 

Agreement on Attorneys’ Fees, Expenses, and Costs ............................. 57 

Dorris, William E., Managing Partner, Kilpatrick Stockton LLP, 

Washington, D.C. .......................................................................................... 61 

Finley, Hon. Michael O., Director, Inter-Tribal Monitoring Association 

on Indian Trust Funds, Albuquerque, New Mexico ................................... 9 

Prepared statement of ............................................................................... 10 

Hayes, Hon. David, Deputy Secretary, U.S. Department of the Interior, 

Washington, D.C. .......................................................................................... 33 

Prepared statement of ............................................................................... 35 

Monette, Richard, Professor of Law,, University of Wisconsin, Madison, 

Wisconsin ....................................................................................................... 17 

Prepared statement of ............................................................................... 19 

Nunez, Hon. Austin, Chairman, Indian Land Working Group, and 

Chairman, San Xavier District of the Tohono O’odham Nation, Tucson, 

Arizona ........................................................................................................... 13 

Prepared statement of ............................................................................... 15 

Response to questions submitted for the record ..................................... 16 

Perrelli, Hon. Thomas J., Associate Attorney General, U.S. Department 

of Justice, Washington, D.C. ........................................................................ 37 

Prepared statement of ............................................................................... 39 

Additional materials supplied: 

Rosebud Sioux Tribe, Statement submitted for the record ........................... 63 

Squire, Percy, Percy Squire Co., LLC, Columbus, Ohio, Letter submitted 

for the record ................................................................................................. 66 

(1) 

OVERSIGHT HEARING ON ‘‘PROPOSED SETTLEMENT OF THE COBELL V. SALAZAR 

LITIGATION.’’ 

Wednesday, March 10, 2010 

U.S. House of Representatives 

Committee on Natural Resources 

Washington, D.C. 

The Committee met, pursuant to call, at 10:12 a.m. in Room 

1324 Longworth House Office Building, Hon. Nick J. Rahall, II, 

[Chairman of the Committee] presiding. 

Present: Representatives Rahall, Kildee, Faleomavaega, Napolitano, Grijalva, Costa, Sablan, Heinrich, Christensen, Baca, Herseth 

Sandlin, Hastings, Smith, Lummis, and Cassidy. 

STATEMENT OF HON. NICK J. RAHALL II, A REPRESENTATIVE 

IN CONGRESS FROM THE STATE OF WEST VIRGINIA 

The CHAIRMAN. The Committee meets today to hear testimony on 

the Proposed Settlement of the Cobell v. Salazar litigation. Under 

the proposed $3.4 billion agreement, $1.5 billion would be used to 

settle historical accounting claims, as well as mismanagement 

claims. 

The remaining $2 billion would be used to address the 

fractionated Indian lands problem. This settlement agreement will 

end almost 14 years of contentious litigation. 

For the first time ever, the parties have come together and 

agreed upon a proposed settlement. I commend the parties for overlooking your differences, trying to resolve the issues, and put an 

end to the court battle. 

While I support settlement of this case, some in Indian Country 

have raised questions and concerns. The parties have responded to 

many of these issues, and I praise Elouise Cobell for sending widereaching, lengthy e-mails answering questions that she has 

received. 

I encourage the Cobell parties to view this hearing as another 

forum in which to educate not only Congress, but also Indian 

Country, on the agreement. Upon acceptance of this agreement, a 

Secretarial Commission on Trust Reform would be established by 

the Interior Department. 

This is a welcome initiative and long overdue, but it will only be 

successful if the tribes are at the table from the beginning, and the 

Department truly listens to what they have to say, and the Department must remember one size does not fit all. 

I would be remiss if I did not take a moment to reflect on what 

has brought us to this point. Over 100 years of mismanagement of 

Indian trust funds by the United States and decades of ignoring 

the problem. 

2 

I have been here long enough to remember our former colleague, 

Mike Synar from Oklahoma, back in the mid-1980s spending five 

years on a report detailing the breadth and scope of the problem. 

That report started the Congressional focus on fixing the problem. Since that time, Congress has held numerous hearings, passed 

legislation, and appropriated millions of dollars to reform trusts on 

management, and give Indian trustees greater control over their 

funds. 

Many times I have sat in this room and heard from the Interior 

Department that they had plans for a new, latest, greatest computer system that would fix all the problems. 

Do not misunderstand me. I believe those plans were made with 

the best intentions, but the problem remained that moving data to 

any one system could not fix all the problems, and no computer 

system can recreate documents lost decades ago. 

Many people have worked on the reform issue over the years, 

and they have moved on. The one constant through it all has been 

Elouise Cobell. I have nothing but the utmost respect and admiration for Elouise. She has not once faltered in her mission to mend 

the system and ensure that future Indian allottees benefit from a 

well managed trust fund process. 

Elouise, we thank you for your tenacity, and all of your hard 

work. The trust fund mismanagement lawsuit has been very frustrating to all involved and, at times, tempers overheated. Thankfully, we have with us today only persons dedicated to bringing this 

chapter to a close, and willing to do the work needed to see that 

that happens. I look forward to their testimony. I recognize the 

Ranking Member. 

[The prepared statement of Chairman Rahall follows:] 

Statement of The Honorable Nick J. Rahall, II, Chairman, 

Committee on Natural Resources 

The Committee meets today to hear testimony on the proposed settlement of the 

Cobell v. Salazar litigation. 

Under the proposed $3.4 billion agreement, $1.4 billion would be used to settle 

historical accounting claims as well as mismanagement claims. The remaining $2 

billion would be used to address the fractionated Indian lands problem. 

This Settlement Agreement will end almost 14 years of contentious litigation. For 

the first time ever, the parties have come together and agreed upon a proposed settlement. I commend the parties for overlooking their differences, trying to resolve 

the issues and putting an end to the court battle. 

While I support settlement of this case, some in Indian Country have raised questions and concerns. The parties have responded to many of these issues and I praise 

Elouise Cobell for sending wide reaching, lengthy e-mails answering questions she 

has received. 

I encourage the Cobell parties to view this hearing as another forum in which to 

educate, not only Congress, but also Indian Country, on the agreement. 

Upon acceptance of this agreement, a Secretarial Commission on Trust Reform 

would be established by the Interior Department. This is a welcome initiative and 

long overdue. But it will only be successful if the tribes are at the table from the 

beginning and the Department truly listens to what they have to say. And the Department must remember, one size does not fit all. 

I would be remiss if I did not take a moment to reflect on what has brought us 

to this point - over 100 years of mismanagement of Indian trust funds by the United 

States and decades of ignoring the problem. 

I have been here long enough to remember our former colleague, Mike Synar from 

Oklahoma, back in the mid 1980s spending five years on a report detailing the 

breadth and scope of the problem. That report started the Congressional focus on 

fixing the problem. Since that time Congress has held numerous hearings, passed 

3 

legislation, and appropriated millions of dollars to reform trust fund management 

and give Indian trustees greater control over their funds. 

Many is the time I have sat in this room and heard from the Interior Department 

that they had plans for a new, latest, greatest, computer system that would fix all 

the problems. Do not misunderstand me; I believe those plans were made with the 

best intentions. But the problem remained that moving data to any one system 

could not fix all of the problems and no computer system can recreate documents 

lost decades ago. 

Many people have worked on the reform issue over the years, and many have 

moved on. The one constant, through it all, has been Elouise Cobell. 

I have nothing but the utmost respect and admiration for Elouise. She has not 

once faltered in her mission to mend the system and ensure that future Indian 

allottees benefit from a well managed trust fund process. 

Elouise, we thank you for your tenacity and all of your hard work. 

The trust fund mismanagement and law suit has been very frustrating to all involved and at times tempers overheated. Thankfully we have with us today only 

persons dedicated to bringing this chapter to a close and willing to do the work 

needed to see that happens. 

I look forward to the testimony. Thank you. 

STATEMENT OF HON. DOC HASTINGS, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF WASHINGTON 

Mr. HASTINGS. Thank you, Mr. Chairman, and thank you for 

scheduling this meeting on Cobell v. Salazar, the settlement agreement. Mr. Chairman, it was on December 7 of last year that this 

settlement was announced, and it was greeted with widespread 

hope across Indian Country that a resolution was at hand. 

I, too, am very hopeful that a fair treatment for individual 

Indians is close at hand. This lawsuit, as the Chairman has mentioned, has gone on far too long, and it is my first priority that individual Indians are treated fairly in this matter. However, I must admit a degree of concern that the $3.4 billion 

settlement that was announced on December 7 had an initial expiration date of December 31, only 24 days later. 

That deadline was subsequently extended to February 28, and 

now to April 16. So my concerns are twofold. First, the urgency for 

action by the parties to the settlement, at least thus far, has not 

been open to any transparent action by this Congress. 

We are over three months after the initial settlement, and now 

we are holding our first public hearing, and I commend again the 

Chairman for doing that. But this hearing does come only after this 

Committee was contacted by individual Indians and several Indian 

organizations simply asking for more information on what this settlement means. 

It is troubling that affected Indians have felt concern that there 

may be a rush to action before public hearings were held so that 

they may better understand the settlement. My second concern has 

been the astonishing fact that no actual bill to implement the settlement has yet been introduced in either house. For three months, 

there have been no legislative attempts before either the House or 

the Senate, and more importantly, there is no introduced bill 

available to be read by those who are directly affected by the 

settlement. 

So deadlines are being imposed on Congress to act with 

uncharacteristic swiftness, and yet there is no introduced bill for 

Congress to even look at, or those interested parties to look at. 

4 

This raises the question of when and how this settlement agreement is going to be enacted. Will it be handled in an open, transparent manner that respects the rights of individual Indians to see 

and understand what is happening, or will it be done in a manner 

that instead puts the emphasis on speed and haste. 

On the details of the settlement itself, there are several matters 

that I certainly would like the witnesses to address, issues that 

have been raised by Indians in their correspondence with this 

Committee. 

First, I want to distinguish between the $1.4 billion portion of 

the settlement agreement that resolves the Indian historical accounting class action lawsuit, and also extinguishes all potential 

damages claimed, and the $2 billion portion that provides funding 

to existing authorized Department of the Interior programs to purchase fractionated lands. Those two issues. 

The $1.4 billion will provide a cash payment of $1,000 to each 

Indian account holder. While the class action case was not a money 

claims case, there is clearly merit in settling it by paying cash 

awards and starting with a clean slate. The bulk of the $1.4 billion portion, however, will go to settling 

damage claims, which were not litigated in the Cobell case. It is 

my understanding that a key reason behind the need for Congressional action on the settlement agreement is this matter of 

damages claimed. 

The District Court has no jurisdiction over them, and legislation 

is needed to create these claims, while simultaneously resolving 

them. I have to admit that this does raise a degree of concern that 

Congress would serve as the lawyer, judge, and jury, in unilaterally 

dispensing with the claims of thousands of individual Indians. 

However, the parties to the settlement agreement have concluded 

this is a critical component, and they should weigh very heavily in 

our consideration. I certainly respect that, though it is important 

to ask for information on how this affects individual Indians, and 

whether they are being treated fairly in this process. 

And, second, Mr. Chairman, there is the matter of the attorney 

fees. Reports have said that lawyers could be paid between 

$50 million and $100 million. Now that is a very high amount of 

money. I believe it is important to understand what specific justification exists for this large payment to the lawyers in this case, 

and whether they are collecting any fees from the settlement of 

damage claims that they did not represent. 

Lawyers deserve to be paid fairly for the actual work that they 

perform, but there appears to be no accounting or records to back 

up this high level of fees. Congress should have that information, 

especially as it is my understanding that the fees paid to lawyers 

come from the same pot of money that compensates individual 

Indians. 

When every dollar that goes into the pocket of a lawyer comes 

out of the pocket of an individual Indian, I think it is our responsibility as Members of Congress to look at this very closely. 

Last, greater clarity would be helpful on the portion of the settlement agreement that provides $2 billion for the consolidation of 

fractionated Indian lands. How is this related to the settling of 

claims? 

5 

Was it included at the request of the Plaintiffs or the Government? What oversight will be provided to ensure the best benefit 

to taxpayers, individual Indians, and Indian tribes as a result of 

this portion and this part of the settlement. 

In conclusion, I do want to thank you again, Mr. Chairman, for 

holding this hearing. I believe it is an important step and opportunity to improve our understanding and the understanding of the 

affected Indians of this settlement agreement. So, with that, I 

thank you, and I yield back my time. 

The CHAIRMAN. Do other Members wish recognition? The Chair 

of our Native American Caucus, Mr. Kildee. 

STATEMENT OF HON. DALE E. KILDEE, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF MICHIGAN 

Mr. KILDEE. Thank you, Mr. Chairman. First of all, I want to 

commend President Obama, Attorney General Holder, and Interior 

Secretary Salazar, for their attention to this matter, and their continued efforts to strengthen the relationship between the United 

States and the tribal nations. 

And I want to commend Elouise Cobell. Tenacity is a great virtue, and she certainly has exercised that tenacity for justice. When 

you are going to be a seeker after justice, you have to pursue your 

justice and the justice of those with whom you are associated. 

She has done a wonderful job in this, and I think sets an example for us in the Congress, which has an obligation to pursue justice. And let us take an example from her, who would not give up, 

and pursued this relentlessly with a great devotion. 

And I think this is one where we have to give our devotion to 

this, and that this is a moral issue, more than just a legal issue. 

It is a moral issue, and we have to do what is morally and legally 

right, and make these things as right as humanly possible. 

We know that records have been lost, and this figure has been 

agreed upon, but I hope that when I stand before my tribes that 

I can present as good a case of having done good as Elouise Cobell 

has done. I yield back the balance of my time. 

The CHAIRMAN. The Gentleman from American Samoa, Mr. 

Faleomavaega. 

[The prepared statement of Mr. Kildee follows:] 

Statement of The Honorable Dale E. Kildee, a Representative in Congress 

from the State of Michigan 

Good morning Mr. Chairman, I want to thank you for scheduling this hearing 

today. I first would like to pledge my support for ending the 14 years of litigation 

surrounding this case. 

I commend President Obama, Attorney General Holder and Interior Secretary 

Salazar for their attention to this matter and their continued efforts to strengthen 

the relationship between the United States and tribal nations. 

As you know, the Cobell case has been in litigation for over 13 years. Late last year, the parties reached an agreement to settle the case for $3.4 billion. But the 

agreement will not take effect unless Congress passes legislation to authorize and 

fund the Settlement Agreement. Legislation is needed to ensure that the court has 

jurisdiction over the terms of the Settlement Agreement and to ensure the availability of Judgment Funds to settle the claims. 

The courts in this case have repeatedly found the United States to be in violation 

of its trust responsibilities to Native Americans. The Settlement Agreement resolves 

the claims of those Native Americans and also fixes the problems that caused the 

mismanagement of over three hundred thousand trust accounts held by Native 

Americans. 

6 

This decision will help make amends for the past mismanagement of Indian trust 

funds by the U.S. Government, as well as bring much needed resources to address 

fractionated Indian lands. 

While this is an important step, this is not the end of the fight for justice on behalf of Indian trust assets, and I will continue to fight to ensure that our tribes are 

treated in a fair and equitable manner. 

I, along with several of my colleagues will be sending a letter to House leadership 

urging them to provide immediate assistance and support in passing legislation to 

approve and fund the Cobell v. Salazar Settlement Agreement. 

As you are aware, the settlement agreement originally required Congressional approval by Dec 31, 2009, which was extended until February 28, 2010. Fortunately 

the parties have again agreed to extend this deadline until April 16, 2010. 

I want to applaud Chairman Rahall with working the Senate Indian Affairs Committee to seek a timely conclusion to this pending litigation. I urge my colleagues 

to support a timely resolution to this litigation. I look forward to hearing from the 

witnesses today. Thank you. 

STATEMENT OF HON. ENI F.H. FALEOMAVAEGA, A DELEGATE 

IN CONGRESS FROM AMERICAN SAMOA 

Mr. FALEOMAVAEGA. Thank you, Mr. Chairman. As a Member of 

our American Indian Congressional Caucus, I do thank the 

Gentleman from Michigan, and also our colleague from Oklahoma, 

Mr. Cole, as Co-Chairmen of our Congressional Caucus for 

American Indians. 

And I do want to thank you and Mr. Hastings for what I thought 

were pretty comprehensive statements in terms of the situation 

that we are now in. The only concern that I have, Mr. Chairman, 

is that 384,000 accounts involving some 250 Indian tribes, 100 

years of mismanagement, that we can only come up with 

$3.5 billion. 

Something is missing here, Mr. Chairman, I submit, and I think 

that this is one reason why we had the courageous efforts by Ms. 

Elouise Cobell, because not only the Congress was not able to 

resolve the thing. It seemed like getting this $3.5 billion is like 

pulling teeth. 

Oh, but we can spend $900 billion in fighting the war in Iraq, 

and the five million Native Americans, and all of the men and 

women who serve in the Armed Forces, and who bleed and die for 

our country, I just want to say that something is amiss here, Mr. 

Chairman. 

And I really honestly believe that $3.5 billion is a pittance, and 

I think that likely what Mr. Hastings was saying that paying our 

attorneys $50 million to $100 million, there is something wrong 

with that, too. 

I do want to associate myself with the comments that Mr. Hastings has made. The concerns about how we are proceeding with 

this effort, this so-called settling of these hundred years of 

mismanagement. 

The fact that there were even efforts of reorganizing the Bureau 

of Indian Affairs, nothing has come about in that, on that situation. 

But I do want to say that I do have some very serious questions 

about how we come up with a figure of $3.5 billion. I felt at least 

it should have been $9 billion to $10 billion, and even that was 

very difficult to ascertain. 

And supposedly we had given every opportunity to the Department of the Interior to come up with the numbers, come up with 

7 

the figures, and if they couldn’t, then there has got to be a better 

way of calculating exactly what was lost, what was stolen, or in 

terms of the mismanagement on the part of our government to be 

the trustees of the resources that were rightfully owned by the 

Indian tribes. 

Again, I do want to thank you, Mr. Chairman, for calling this 

hearing. I hope that it won’t be the last, and there will be more 

in the coming weeks and months, and let us just look into it a little 

more and a little deeper. 

And, I, too, want to say how much utmost respect I have for 

Elouise Cobell for her courage, for her commitment, not only on her 

own behalf, but certainly among all the Indian tribes that were affected by the bottom line mismanagement by the Bureau of Indian 

Affairs, and the accounts of our Native American people. 

This is just a real sad commentary. I don’t know if I should stand 

up and say hooray for $3.5 billion, or I should say that something 

is wrong here. I think our Indian Americans deserve a lot more 

than this, and I thank you, Mr. Chairman. 

The CHAIRMAN. Are there other Members who wish to make 

opening comments? The gentlelady from California. 

STATEMENT OF HON. GRACE NAPOLITANO, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mrs. NAPOLITANO. Thank you, Chairman Rahall, for the hearing. 

I have sat through these Committee hearings in this room for almost 12 years, a little over 12 years, and listening to many of the 

things through the years, it is very apparent that we have not 

paid—and as the comments by Mr. Faleomavaega, and my colleague, Mr. Kildee, there is a lot missing, and somehow we are not 

focused on being able to rectify the wrongs that have been done to 

the Native Americans for decades. 

In my Subcommittee on Water and Power, we continue to honor 

the tribes water claims. I think there is a lot of work to be done, 

and I thank the Administration for trying to get moving. 

I just feel that somehow we feel frustrated that we may not be 

moving fast enough, or wide enough, to be able to understand that 

if we help our Native American Tribes that they can take care of 

their own. 

They will be able to succeed in the economy by educating their 

children, and being able to do all the things that we have not kept 

them from, but not helped them. We have taken from, but not 

helped them. 

So not even to see that there has been a benefit settlement to 

reimburse families and communities is really a travesty upon our 

own people, because Native Americans are our first Americans. 

We need to bring this to a closure and whatever we can do to 

help, Mr. Chairman, we are ready to do so, and thank you so very 

much for this hearing. 

The CHAIRMAN. I thank the gentlelady. The gentleman from 

Arizona, Mr. Grijalva. 

8 

STATEMENT OF HON. RAU ́ L M. GRIJALVA, A REPRESENTATIVE 

IN CONGRESS FROM THE STATE OF ARIZONA 

Mr. GRIJALVA. I want to thank you, Mr. Chairman, and thank 

you for the hearing. Let me briefly just associate myself with the 

comments that Mr. Kildee made, and also take the privilege and 

the opportunity to welcome my good friend, Austin Nunez, from 

back home. 

Welcome, and again, thank you for the hearing. It is important, 

and the sooner that we move, the sooner we can begin the resolution to this issue that has been around too long. Thank you, sir. 

The CHAIRMAN. Any other comments? Opening statements? The 

gentlelady from the Virgin Islands, Dr. Christensen. 

STATEMENT OF HON. DONNA M. CHRISTENSEN, A DELEGATE 

IN CONGRESS FROM THE VIRGIN ISLANDS 

Mrs. CHRISTENSEN. Just briefly, Mr. Chairman. I want to thank 

you for holding this hearing, and I have been here for 14 years. I 

remember my first joint hearing over at the Senate on this issue, 

and being left to chair what was a very, very difficult hearing. 

But I am just glad that we are coming close to ending an injustice that has existed for far too long. There is still much work to 

be done, but I want to take this opportunity to also applaud Ms. 

Cobell, and those who supported her, and look forward to the testimony of our witnesses this morning. 

The CHAIRMAN. OK. If there are no further opening statements, 

we will now recognize—well, before I recognize the witnesses, I 

would like to note that our longtime staff director in the Office of 

Indian Affairs, Marie Howard, is retiring at the end of this month. 

This will be the last hearing that she will staff. There she is. And 

for almost 30 years now, Marie has worked on this Committee, 

fighting for Indian Country, and on behalf of all of us on the Committee, the Members on the Committee want to express our appreciation to Marie, both professionally and personally, for her dedication, and her professionalism, and the manner in which she has so 

well conducted herself over these 30 years. 

So, Marie, congratulations to you, and we want to wish you the 

best as you continue to work for Indian Country. 

[Applause.] 

Mr. FALEOMAVAEGA. Will the Chairman yield? 

The CHAIRMAN. Yes, gladly. 

Mr. FALEOMAVAEGA. I might also add the fact that just about 

every major piece of legislation affecting our Native American community has Marie Howard’s signature on it. I also want to commend her and thank her for a tremendous service that she has 

given on behalf of our Native American community throughout the 

country. Marie, you deserve every bit of it. Thank you. 

The CHAIRMAN. OK. Our first panel is composed of the following 

individuals: The Honorable Michael Finley, the President of the 

Inter-Tribal Monitoring Association on Indian Trust Funds, from 

Albuquerque, New Mexico; The Honorable Justin Nunez, 

Chairman, Indian Land Working Group, Tucson Arizona; and Professor Richard Monette, the University of Wisconsin, Madison, Wisconsin. 

9 

Gentlemen, we welcome you to the Committee on Natural Resources today. We do have your prepared testimony. It will be 

made part of the record as if actually read, and you are encouraged 

to summarize within the five-minute time frame. And do you want 

to go in the order that I introduced you? Mr. Finley then. 

STATEMENT OF HON. MICHAEL FINLEY, PRESIDENT, INTERTRIBAL MONITORING ASSOCIATION ON INDIAN TRUST 

FUNDS, ALBUQUERQUE, NEW MEXICO 

Mr. FINLEY. Good morning, Chairman Rahall, and Ranking 

Member Doc Hastings, and Members of the Committee, my name 

is Michael Finley, and I serve as Chairman to the Board of Directors of the Intertribal Monitoring Association on Indian Trust 

Funds. 

However, I am also Chairman of my own tribe, the Confederated 

Tribes of the Colville Reservation, Northeast Washington State. I 

appreciate the opportunity to be here today to present ITMA’s 

views regarding the proposed settlement of the Cobell litigation. 

The Committee has my prepared statement, and I would like to 

take the opportunity to highlight a few of those areas. Since the 

onset, ITMA has long supported an honorable and just settlement 

of the Cobell litigation. However, as the Chairman has pointed out, 

we are talking about a hundred years of history here. 

It is an emotional issue for many of the Indian beneficiaries, and 

they have many questions. I have heard various questions from 

people across Indian Country, as well as my own constituents. 

They want to know what this settlement means to them. They 

want to know how it is going to impact them. However, I don’t always have the answers to their questions. They want to know why 

is it only recently the mismanagement claims were included when 

all along they were told that they were not, and I believe that question was raised a little bit ago. 

So being their tribal leader, they want me to have answers to 

these questions, and I always haven’t had the answers to those 

questions. I know that ITMA, as an organization that deals with 

these issues, has been fielding many questions from Indian Country, as well as tribal leaders. 

I have heard from various tribal leaders as well who have been 

hearing many of the same questions. Indian beneficiaries that are 

impacted by this just want transparency. They question why the 

haste, and I think that it is a legitimate question that needs to be 

answered, but more importantly, their questions need to be answered before this is considered. 

So as a result of that, ITMA may organize the first national outreach meeting on a settlement in Las Vegas on February 24th. 

Elouise’s attorneys were on-hand, and ITMA and the consultants 

were on-hand. Various tribal leaders and Indian beneficiaries 

across the Nation were on-hand. 

Many questions were asked, and many were answered. However, 

a lot of the issues were not clarified, and questions remain. In attempts to address some of those questions and answers, ITMA has 

offered suggestions that is in the written testimony that is before 

you today. 

10 

And I feel though what I would like to highlight is that we are 

asking the Plaintiffs and the Government consider setting aside a 

portion of the settlement fund to provide an option for mismanagement claims to be resolved administratively. 

We want to target those people who fall through the cracks, and 

I think if this is considered as we move forward, it would give an 

opportunity for many of those people to have a voice. 

A lot of the Indian beneficiaries that I have talked to, they just 

want their story to be here. Because of the long history, many of 

these people were reared on the very same lands that are now included on this Class II action that is within the settlement terms. 

So they have an emotional tie to the property. A lot of time this 

property is passed on from one generation to the next, and include 

important cultural areas to the Indian beneficiaries. 

There is a long history of mismanagement, and in some cases 

outright capricious activities conducted by the Bureau, and many 

of these individuals just want their story to be heard, and they 

want to see a resolution to the wrongs that were done to them in 

the past, but they want that to happen in the right way. 

We also would like the Department to consult with the tribal 

governments on how the $2 billion land consolidation fund will be 

implemented and spent. All too often in the past, I think you would 

see that this was done with the input of the tribes. 

The tribes deserve to have a voice in this process. They need to 

be consulted on this. I think the tribes should have a better understanding of what those priorities would be other than some other 

group that is based out of D.C. 

We are on the ground working with the land, and we know the 

land, and we know what our priorities are. We want to be given 

that opportunity to decide what those priorities would be if this 

moves forward and the money is allocated in that program. 

We also would like the parties to conduct in person outreach to 

the Indian beneficiaries throughout Indian Country, because as I 

stated, it is an emotional issue. People want to be heard. They 

want their questions answered. 

So I would ask that the parties conduct that as we move forward. 

In conclusion, I would like to thank you for this opportunity to testify today. ITMA is grateful for the Administration’s commitment 

to ending the Cobell litigation, in hopes that this commitment also 

extends to resolving the scores of pending tribal lawsuits and forward looking trust reform. At this time, I stand ready for any questions that the Committee may have. 

[The prepared statement of Mr. Finley follows:] 

Statement of The Honorable Michael O. Finley, Director, on Behalf of the 

Inter-Tribal Monitoring Association on Indian Trust Funds 

Good morning Chairman Rahall, Ranking Member Hastings, and members of the 

Committee. My name is Michael Finley and I am the Chairman of the Board of Directors of the Inter-Tribal Monitoring Association on Indian Trust Funds (ITMA), 

and will be testifying today in that capacity. I am also the Chairman of my own 

tribe, the Confederated Tribes of the Colville Reservation. I appreciate the opportunity to be here today to discuss ITMA’s views regarding the proposed settlement 

of the Cobell v. Salazar litigation. 

ITMA is an organization presently comprised of 65 federally recognized tribes 

from all Regions of the country, including Alaska. For twenty years, we have been 

actively involved in monitoring the activities of the government in the administraVerDate Nov 24 2008 15:23 Apr 28, 2010 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6621 L:\DOCS\55393.TXT Hresour1 PsN: KATHY
11 

tion of Indian trust funds and in the larger trust reform efforts that have grown 

out of the American Indian Trust Fund Management Reform Act of 1994. In 1993, 

ITMA provided the first draft of that Act to Congress and was at the forefront of 

securing the passage of that Act into law. This law is the statutory basis for the 

Cobell lawsuit. 

While ITMA has not endorsed every measure taken by the government in the 

name of trust reform during this period, significant progress has been made in the 

administration of trust funds and trust assets. The daily deposit of receipts through 

a nation-wide lockbox arrangement with a commercial bank, the immediate access 

to Individual Indian Money (IIM) accounts through a debit card issued by a major 

bank, and the latest annual audit that reveals no material weaknesses in the accounting systems are all major improvements that virtually no one would have believed possible when the 1994 Act was being considered by Congress. 

On the other hand, significant issues do remain unresolved, and the organization 

continues to work with and to monitor the government’s progress on other significant trust reform initiatives. Serious problems continue to remain in the overall administration and management of the Indian trust. Examples include the process by 

which the Department provides appraisals for Indian property, issues related to estate planning and will writing assistance to Indian beneficiaries, and the 

unreliability of land records. ITMA continues to work with the government and 

Indian beneficiaries to improve upon these and other problem areas. 

ITMA has long supported an honorable and just settlement of the Cobell litigation 

and has provided input and assistance to the Committees of jurisdiction in previous 

settlement efforts. The Cobell litigation has consumed enormous resources and attention from both our trustee agencies of government and from tribal leaders over 

the last fourteen years. It is fair to say that this lawsuit has deeply affected the 

nature and tone of the tribes’ relationship with the government. We were particularly pleased when we heard during the last Presidential campaign that then-Senator Obama would make settlement of this case a priority if became our President. 

In addition, more than 100 tribes have lawsuits pending against the government relating to trust administration. ITMA hopes that the proposed Cobell settlement reflects a new attitude within the government to actively seek an honorable resolution 

of those cases as well. 

After the proposed settlement was unveiled and individuals had a chance to begin 

reviewing it, ITMA began to field questions from both tribal leaders and individual 

Indians about the settlement and what it means for them. In many cases, after 

being provided with a general explanation of the settlement, the tribal leaders and 

individuals making the inquiries raised additional questions and, in many cases, 

concerns about the settlement and its potential effects should it be ratified by Congress and approved by the Court in its current form. 

Most questions that ITMA has received revolve around the inclusion of Indian 

trust mismanagement claims in the settlement agreement. Unlike an accounting, 

these claims involve the actions, or inaction, of the government in managing Indian 

trust land, such as ensuring fair market value in approving leases or ensuring that 

timber is not overharvested so as to damage the landscape. The inclusion of this 

new and broad category of claims has been a source of confusion and concern because land owners have been told for more than ten years those claims are not involved in the litigation. In fact, if the court had jurisdiction over these claims, the 

parties would not be asking Congress to grant jurisdiction to the court to enter judgment on this proposed settlement. Many people are questioning why this case must 

be greatly expanded in order to settle it. Generally speaking, Indian landowners will 

have these claims extinguished in exchange for a base payment of $500, with the 

possibility that that amount might increase based on a formula. The settlement 

agreement allows the individuals within this class to opt out. 

Other questions posed to ITMA involve the implementation of the $2 billion Trust 

Land Consolidation Fund and the extent, if any, of tribal input in how those dollars 

will be spent. We have also received many questions relating to attorney’s fees and 

incentive payments to the class representatives. The underlying concern of all of 

these questions is the overriding issue of the impact of the proposed settlement on 

the United States’ trust responsibility. 

The original deadline for Congress to act to approve the settlement’s implementing legislation was December 31, 2009, at 11:59 pm, just more than three 

weeks from the time the settlement was disclosed. No one understood the reason 

for the very short timeframe and it made people very wary of what was actually 

being proposed. 

In response to these and other questions, ITMA organized a national meeting on 

February 24, 2010 in Las Vegas, Nevada, to provide a forum for tribal leaders and 

Indian landowners to hear a detailed walk-through of the settlement agreement and 

12 

have an opportunity to ask questions. Significantly, this was the first outreach 

meeting of any kind that we are aware of regarding the settlement. ITMA is very 

grateful for the participation of all of those who attended, including counsel for the 

plaintiffs, and is hopeful that this meeting will be the catalyst for future and extended outreach. 

I cannot emphasize enough how emotional of an issue land and the government’s 

trust responsibility are to Indian people and the heightened emotion that comes 

when those are affected in some way, as they would be in the proposed settlement. 

Although the Cobell case has been a class action, it goes without saying that to 

Indian people the case is much different than a standard class action involving a 

household appliance. There is a strong cultural connection to Indian land and for 

many, to the trust revenue they may receive as trust landowners, even if only a few 

pennies per year. For active landowners living in their respective tribal communities, wrongs for which the government is responsible from decades past that resulted in damage to their land or their families’ land weigh heavily on their minds. 

Many know that their rights will be affected by the settlement but very few have 

fully read and understand the settlement documents. Many have no electricity in 

their homes and limited access in their communities, so for them to be told to refer 

to www.cobellsettlement.com for answers is clearly not possible. Up until the announcement of the settlement, they had been told or understood that any issues 

arising from their trust lands and resources were not any part of the Cobell case. 

Now that they learn that these claims will be presumptively extinguished unless 

they are prepared to make a decision, it creates unease and concern. If they do not 

make the correct decision, something might be forever lost. For some, it means that 

they will have to hire a lawyer that they may not be able to afford. 

With respect to tribal government involvement, there are parts that directly affect 

tribes and they have not been consulted or even advised by the parties that their 

interests are being brought into this law suit. For example, the land consolidation 

program will be overlain in many cases on similar tribal programs. In the past, the 

Bureau of Indian Affairs (BIA) program has sometimes competed directly with tribal 

land consolidation programs. If a competing program is funded with $2 billion, tribal land consolidation and land restoration efforts may be severely hampered rather 

than enhanced. In addition, ITMA is advised that Alaska tribes are prohibited entirely from participating in the BIA Indian Land Consolidation program. These are 

just two examples where ITMA thinks this proposal could benefit from more deliberation. 

ITMA appreciates the complexities associated with creating a rough justice settlement formula and understands that no settlement is perfect for everyone. Many people have raised questions, however, regarding the relationship between the proposed 

payment and the underlying claims that will be extinguished. For example, the formula for payments to Indian beneficiaries in the trust administration class beyond 

the $500 base amount for asset mismanagement claims appears to have little relation to what actual claims they might possess or to damage to their land. They will 

be paid under a formula that is based on the dollar amounts that went through 

their accounts, not on what losses they might have suffered. In other words, those 

who lost the most may actually receive the least and those who received the most 

may be paid even more. The most highly paid of all would very likely be those who 

have sold their trust lands altogether. 

With respect to attorney’s fees and costs, ITMA strongly believes that these payments should come from the Equal Access to Justice Act (EAJA) fund so that such 

fees and costs do not come out of the Settlement Fund set aside for the Plaintiffs. 

Ordinarily, the EAJA fund is available to cover attorney fees and expenses when 

they prevail in litigation against the Federal government and the government’s position was not substantially justified. In this case, the government attorneys have 

publicly announced that the government’s view is that the plaintiffs’ attorneys 

should be fairly compensated for their work in this case. Thus, it is only right for 

the United States to absorb these fees and costs at its expense not the Plaintiffs. 

With respect to the class representatives incentive awards, ITMA has heard some 

confusion as to whether these awards are limited to payment of unreimbursed expenses. ITMA is hopeful that the parties can put this confusion to rest and provide 

an estimate with as much specificity as possible of what each class representative 

intends to seek as an incentive award, together with an estimate of what each class 

representative intends to seek as unreimbursed expenses. 

These are some of the considerations that we hope this Committee will be cognizant of, and ITMA is willing to assist to the extent we are able to continue to facilitate the dialogue so that Indian beneficiaries can be as fully informed as possible 

in making the decisions that may be required of them. 

13 

In the interest of ensuring that individuals receive equitable treatment, ITMA 

recommends that the parties consider, or reconsider, as the case may be, setting 

aside a portion of the settlement fund to provide an option for members of the Trust 

Administration Class to have their claims resolved administratively, perhaps by a 

special master. The August 4, 2006, staff redraft of S.1439, which was introduced 

in the 109th Congress, included such a mechanism. Should the parties determine 

that the inclusion of such an option in the Settlement Agreement is feasible, this 

option would capture those individuals who might otherwise fall through the cracks. 

More importantly, however, it would also provide members of the Trust Administration Class the opportunity to have their mismanagement claims resolved in a manner that provides acknowledgement and closure from the government for the damages that they and their families may have suffered—without the expense and pitfalls of filing a separate lawsuit. 

Second, ITMA believes that the Department should commit to consult with Indian tribes on the implementation of the $2 billion Trust Land Consolidation Fund and 

involve tribal governments in decisions on how the money will be spent. Under the 

Settlement Agreement, the $2 billion would fund the pre-existing Indian Land Consolidation Office (ILCO), which has never had more than $35 million to spend in 

any given year. Under the current practice, the ILCO will often purchase the least 

desirable and unproductive ownership interests, and the government has to administer these purchased interests until the government liens are satisfied. That seems 

very wasteful and unproductive, especially when a more sensible approach is readily 

available. Indian tribes themselves should be able to contract the functions of the 

ILCO so tribes can determine which lands they wish to purchase, and these purchases should be made free of any government liens and taken into trust immediately. In addition, because this program is not presently available to Alaska 

tribes, ITMA has adopted a resolution urging Congress to extend the benefits of the 

Land Consolidation Program to Alaska tribes. 

To spend such a large amount of money quickly, the Department must eliminate 

the red tape and must take a hard look at the requirement that an appraisal be 

prepared for nearly all trust land transactions. Although the Trust Land Consolidation Fund is not related to the settlement of claims involved in the Cobell lawsuit, 

the $2 billion has the potential to be beneficial to both Indian landowners and the 

economies of tribal communities alike. ITMA hopes that the Department is considering these and other questions and looks forward to providing recommendations in 

this regard. 

Finally, we urge the parties to engage in direct, in-person outreach with Indian 

beneficiaries to explain and answer questions about the proposed settlement. Providing a forum for Indian beneficiaries to assemble, compare notes amongst themselves, and tell their stories is invaluable. Again, the emotional aspect of these 

issues to Indian beneficiaries cannot be overstated and beneficiaries deserve to be 

able to talk to a real person given the gravity of the proposed settlement. A website 

or pre-recorded telephone message is simply no substitute for in-person contact. 

Again, this is not the average class action lawsuit. 

ITMA is very grateful for the Administration’s commitment to ending the Cobell 

litigation and hopes that this commitment also extends to resolving the scores of 

pending tribal trust lawsuits and to forward-looking trust reform. Thank you for 

this opportunity to testify. At this time, I would be happy to answer any questions 

that the Committee may have. 

The CHAIRMAN. Thank you, Mr. Finley. Chairman Nunez. 

STATEMENT OF HON. AUSTIN NUNEZ, CHAIRMAN, 

INDIAN LAND WORKING GROUP, TUCSON, ARIZONA 

Mr. NUNEZ. Good morning, Honorable Chairman Rahall, and 

Members of the Committee. Thank you for giving me this opportunity to address this longstanding, arduous, and divisive litigation. 

I am speaking today on behalf of the Indian Land Working 

Group, a nationwide organization founded in 1991, and since that 

time has engaged in issues related to restoration, use, and management of the remaining native land base, including cost allotments. 

ILWG continually seeks improvements in the protection and management of all Indian trust lands. 

14 

With me today are two board members, Vice Chairwoman Helen 

Sanders, and Board Member Marcella Giles. I am a member of the 

Tohono O’dham Nation, and have served 23 years as the Chairman 

of the Nation’s Santa Vera district. 

The district is co-extensive with the Santa Vera Indian reservation founded by Executive order in 1874. The reservation covers 

105 square miles, of which two-thirds, or approximately 42 thousand acres, were allotted to individuals under the General Allotment Act of 1887. 

My family and I are owners of an allotted trust plan, and thus 

within the class of plaintiffs in the Cobell litigation. With this 

background, my remarks today are in my capacity as Chairman of 

ILWG. 

After considerable discussion and deliberations the board of directors of ILWG has taken the position for support of the December 

7, 2009 class action settlement agreement, and the implementing 

legislation which it proposes. 

While the settlement agreement in several ways falls short of our 

initial expectations and hopes. Nevertheless, we believe that this 

settlement agreement is in the best interests of the parties, including class members and the government. 

We have concluded that the benefits of the settlement outweigh 

the disappointments. Our reasoning follows that of the Plaintiff 

class counsel set out in paragraph 16 of the opening section of the 

settlement agreement, namely the risk and uncertainty of further 

litigations, the result, and the benefits of closure and payment to 

land owners, many more of whom would pass away before seeing 

any benefits should this dispute be further extended. 

The settlement agreement does not provide for all of the damages 

sought by the Plaintiffs, nor does it acknowledge the mishandling 

of trust funds by the government, which has caused great hardship 

to our people over many years and generations. 

Nevertheless, the good faith of the parties is obvious in light of 

the progress of the litigation over the past decade. We recognize 

and are encouraged that the amount of the settlement fund is more 

than twice the amount found by the trial court to be the losses resulting from fund mismanagement. 

The uncertainty of further litigating that finding is significant. 

More importantly, this litigation has brought to the Department of 

the Interior and the Bureau of Indian Affairs a dramatic change in 

understanding of the government’s fiduciary duty. 

Regardless of the amount of damages to be distributed to this 

settlement, this settlement will bring closure to this chapter in the 

United States and Indian relationships. Finally, additional investments in land consolidation called for in the second aspect of the 

settlement agreement is long overdue and welcomed. 

We have some difficulty in understanding the inclusion of the 

unlitigated issues of the land mismanagement claims into the settlement at this point, 14 years into the case. We understand the 

desire of the government to resolve as many claims as possible, and 

acknowledge land mismanagement claims that are related to the 

general allegations of trust mismanagement. 

In view of the benefits of the settlement agreement, and risks, 

and uncertainty, and delay in further litigating those issues, ILWG 

15 

can accept this aspect of the settlement agreement, but DOI and 

the Department of Justice should extensively consult with IAM account holders, not just the tribes, plus the issues of backlog, probate should be addressed before the settlement goes forward. 

Last, we do not agree with sunset provisions for fractionation. In 

conclusion, the board officers of the Indian Land Working Group 

acknowledge and thank those who worked hard to preserve, and 

their financial support and sacrifice to conclude and deliver the settlement agreement. Thank you for the opportunity to address you 

today. 

[The prepared statement of Mr. Nunez follows:] 

Statement of The Honorable Austin Nunez, Chair, Indian Land Working 

Group, and Chairman, San Xavier District of the Tohono O’odham Nation 

Honorable Chairman and Members of the Committee, I appreciate the opportunity to address this committee today on the proposed settlement of this long running, arduous and divisive litigation. 

I am speaking today on behalf of the Indian Land Working Group, a nation wide 

organization founded in 1991, and since that time actively engaged in issues related 

to restoration, use and management of the remaining native land base, including 

trust allotments. The ILWG continually seeks improvement in the protection and 

management of all Indian Trust Lands and the revenues derived from them. 

I am a member of the Tohono O’odham Nation, and have served for 22 years as 

chairman of that Nation’s San Xavier District. The District is coextensive with the 

San Xavier Indian Reservation founded by Executive Order in 1874. The reservation 

covers 105 square miles, of which two-thirds, or approximately 42,000 acres were 

allotted to individuals under the General Allotment Act of 1887. My family and I 

are owners of allotted trust land, and thus within the class of plaintiffs in the Cobell 

litigation. With this background, my remarks today are in my capacity as the chairman of ILWG. 

After considerable discussion and deliberation, the Board of Directors of ILWG 

has taken a position of support for the December 7, 2009 Class Action Settlement 

Agreement and the implementing legislation which it proposes. While the Settlement Agreement in several ways falls short of our initial expectations and hopes, 

nevertheless, we believe that this Settlement Agreement is in the best interests of 

the parties, including class members, and the government. We have concluded that 

the benefits of this Settlement outweigh the disappointments. Our reasoning follows 

that of the Plaintiff Class Counsel set out in paragraph 16 of the opening section 

of the Settlement Agreement, namely, the risk and uncertainty of further litigation, 

certainty of result, the benefits of closure and the payment to landowners, many 

more of whom would pass away before seeing any benefit should this dispute be further extended. 

The Settlement Agreement does not provide for all of the damages sought by the 

plaintiffs, nor does it acknowledge mishandling of trust funds by the government 

which has caused great hardship to our people over many years and generations. 

Nevertheless, the good faith of the parties is obvious in light of the progress of the 

litigation over the past decade. We recognize and are encouraged that the amount 

of the settlement fund is more than twice the amount found by the trial court to 

be the losses resulting from fund mismanagement. The uncertainty of further litigating that finding is significant. More importantly, this litigation has brought to 

the Department of Interior and the Bureau of Indian Affairs a dramatic change in 

understanding of the government’s fiduciary duty. Regardless of the amount of damages to be distributed through this Settlement, this Settlement will bring closure 

to this chapter in United States and Indian relations. Finally, additional investment 

in land consolidation called for in the second aspect of the Settlement Agreement 

is long overdue, and welcome. 

There have been rumblings in Indian country about the amount of attorneys’ fees 

and incentive payments to the class representatives. It is appropriate for class representatives to be reimbursed for the monies they have expended in pursuing this 

litigation; however, it is difficult for most landowners, whose holdings provide little 

if any income, to comprehend litigation costs of the magnitude of $15 million. We 

recognize, however, that it is appropriate to reimburse those native people who sacrificed and had the courage and stamina to support this endeavor for the past 14 

years and without whose contributions there would be no settlement fund. It is also 

16 

hard for many to understand how attorneys’ fees of up to $100 million can be fair 

and reasonable. However, these amounts in relation to the amount recovered 

through the litigation and negotiation of the settlement may be appropriate. We also 

note that trust beneficiaries are somewhat protected through the process outlined 

in the Settlement Agreement for publication and court approval of the amounts to 

be paid out for attorneys’ fees and class representative payments. 

We have some difficulty in understanding the inclusion of the unlitigated issues 

of land mismanagement claims into the settlement at this point, 14 years into the 

case. We understand the desire of the government to resolve as many claims as possible, and acknowledge the land mismanagement claims are related to the general 

allegations of trust mismanagement. In view of the other benefits of the Settlement 

Agreement, and the risks and uncertainty and delay of further litigating these 

issues, ILWG can accept this aspect of the Settlement Agreement. 

In conclusion, the Board and Officers of the Indian Land Working Group acknowledge and thank those whose hard work, perseverance, financial support and sacrifice were able to conclude and deliver the Settlement Agreement. I urge the Committee, the House and Senate to act quickly to approve the implementing legislation 

so that the Cobell litigation can be put to rest and the Native landowners whose 

moneys were mishandled can be compensated. 

Thank you for the opportunity to address you today. 

Response to questions submitted for the record by Hon. Austin Nunez, 

Chairman, San Xavier District Tohono O’odham Nation, and Indian Land 

Working Group 

March 25, 2010 

Hon. Nick J. Rahall, II 

Chairman 

Committee on Natural Resources 

U.S. House of Representatives 

Washington, D.C. 20515 

Dear Chairman Rahall, 

Thank you again for giving the Indian Land Working Group the opportunity to 

comment on the proposed Cobell Settlement at the March 10, 2010 hearing. This 

is to provide our responses to your questions as posed to us in your letter of March 

15, 2011. I have listed them in the same order as your letter. 

1. In the Cobell hearing, during questioning from the Committee, Plaintiff’s 

attorney William Dorris testified that in 2004, the Court invited the 

plaintiffs to file trust mismanagement claims. Accordingly, the issue of 

whether or not such claims were included in the Cobell lawsuit appears to 

be in some dispute. Can you comment on this matter? 

Response: The Indian Land Working Group (ILWG) understands that the corpus 

of the trust includes trust or restricted land and underlying natural resources. The 

Department of the Interior (DOI) mismanagement of these resources has been a 

topic of discussion at many of ILWG’s conferences that included unlawful trespass, 

overgrazing or timber cut without permission or oil pumped from an allottee’s land 

without permission. These were the ongoing issues that led to an incorrect payment 

deposited in each allottees Individual Indian Monies (IIM) account. 

During several of ILWG’s workshops, individual allottees met and asked for assistance to determine correct rental payments from their respective leases, to understand probate rulings under AIPRA, and to address fractionation complexities. The 

results from the workshops included the understanding that a correction of their 

IIM accounting depended on DOI administratively correcting the management of 

the resource. 

From ILWG’s perspective, then, asset mismanagement was always seen as a factor in IIM account shortages. We have not been privy, however, to the strategic decisions of the counsel for the Plaintiff Class in not making those issues explicit in the 

litigation. 

2. As you testified on the first panel, would you care to comment on the 

testimony of any other witness at the hearing or to respond to issues 

raised by any of the witnesses? 

Response: Professor Monette raised an issue of collusion between the parties in 

his testimony. ILWG dismisses this notion and suggest this undermines the professor’s credibility. ILWG expected the parties to negotiate a settlement. The ILWG exVerDate Nov 24 2008 15:23 Apr 28, 2010 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6621 L:\DOCS\55393.TXT Hresour1 PsN: KATHY
17 

pected a larger settlement number as did most members of the plaintiff class. Despite this disappointment, ILWG believes a good faith negotiation occurred and 

gives no logic to an argument that the Cobell parties colluded to bring spurious results to individual allottees. The negotiated settlement needs to move forward to be 

approved by Congress. 

Mr. David Hayes stated in his testimony that there would be an effort to do more 

outreach to tribes. ILWG strongly recommends actual field meetings to talk to tribes 

including allottees as well as give notice to Bureau of Indian Affairs Regional Directors to hold informational discussions with tribes and allottees in each Region. 

Newspapers, TV, radio and speaking engagements should be employed. In sum, 

ILWG does not believe outreach has been adequate. 

Mr. Michael Finley, Chairman of the Inter-tribal Monitoring Association (ITMA) 

and Chairman of the Colville Tribe, did not elaborate on how closely ITMA has 

worked with allottees who are members of the class of plaintiffs to this lawsuit. To 

address allottee issues, the ILWG has developed educational videos and manuals in 

the areas of Estate Planning and Probate; Land Exchange & Consolidation; Leasing 

of Indian Land; Land Acquisition and Financing; and Land Data. In response to 

changes in the Indian Land Consolidation Act and the American Indian Probate Reform Act, ILWG conducted numerous community based trainings over the past several years that included meetings with tribal councils/tribal employees and landowner associations. In addition the ILWG responds to requests from Tribes and individuals for information on a continual basis. 

Representatives from the San Xavier Allottee Association (AZ), the Oklahoma 

Indian Land & Mineral Owners Of Associated Nations—OILMAN (OK), the Allottee 

Association of the Affiliated Tribes of the Quinault Reservation (WA), the Ft. Hall 

Landowners Alliance (ID), and the Lakota Landowners Association (SD) are some 

of the community based entities and locations where trainings have been conducted, 

or individual one-on-one assistance has been given. In addition, trainings were coordinated for Tribal Councils, educational institutions, legal entities, and additional 

tribal communities on a per request basis. 

The ILWG is not aware of one Tribe or tribal organization, such as ITMA, that 

has worked with allottees in the same manner as ILWG for the past two decades. 

Our extensive two-decade work with allottees is the basis from which ILWG finds 

its support of this settlement. 

Sincerely, 

Austin Nunez, Chairman 

San Xavier District Tohono O’odham Nation 

and Indian Land Working Group 

The CHAIRMAN. Professor Monette, welcome. 

STATEMENT OF PROFESSOR RICHARD MONETTE, 

MADISON, WISCONSIN 

Mr. MONETTE. Good morning, Chairman Rahall, and Ranking 

Member Hastings, and Members of the Committee, thank you for 

the opportunity to present this morning on this historic moment for 

the tribes. 

Mr. Chairman, the proposed Cobell settlement, if enacted as it is, 

would itself be a breach of trust, particularly as many of you have 

pointed out with the astounding lack of participation of tribes and 

tribal leaders and what has been developed, and the astounding 

lack of transparency so far, especially given the recent urgency and 

haste with which this has been put before you. 

As it is, the proposed settlement runs afoul of the Class Action 

Fairness Act of 2005. It also runs afoul of the Federal Rules of 

Civil Procedure, laws that this Congress has put in place to protect 

class action plaintiffs. 

Now, attorneys in the case have kind of justified all of this as 

though this were sort of any other settlement, and many of you 

have said, and I just want to emphasize, that this is not just any 

other settlement. 

18 

This is a matter of solemn trust between this body and this country, and it should be treated as such, and if anything, this settlement, if any, should comply with the Federal Rules of Civil Procedure, and the Class Action Fairness Act. 

In short, Mr. Chairman, what you have heard is that the proposed settlement includes claims that were not made by Plaintiff. 

They do not pertain, and they are not germane, and they are not 

even relevant to the lawsuit at hand. 

The big ticket items, as you know, are the settlement only provision that would establish a so-called trust administration class. 

Proposing to settle non-monetary asset claims for all those who do 

not proactively opt out, potential claims relating to oil, gas, coal, 

minerals, water, timber, thereby releasing the Department of the 

Interior of all liability in such matters. 

And I want to emphasize water, because we have heard that a 

couple of times here as though perhaps people have missed that. 

That is in here, and to be settled out, individual water claims. 

On that point by the way, I also wanted if I could, with all the 

haste, it was difficult to read this all carefully, and my reading 

lasted very late last night. I had to read something five or six 

times. 

I had a call with the solicitor, who I think, if I might, and with 

all due respect to her, and I respect her very much, she knows, 

found it a little stumped as well. In Item 15, and I think it is A15, it talks about the historical accounting claims, the ones that are 

to be settled entirely without an opt out. 

This is the thousand dollar settlement, and we are told that this 

is just for the accounting, but the definition says historical accounting claims shall remain common law or statutory claims, including 

claims arising under the Trust Reform Act, for an historical accounting through the record date of any and all IAM accounts and 

any asset held in trust or restricted status, including, but not limited to, land and funds. 

Now it takes care of the accounting part and the funds part, and 

so then this land and the assets is something different, and they 

are included in the definition of historical accounting claims, the 

claims that are intended to be finally closed. 

So we get this idea that with the trust administration class that 

you can opt out, but on the other hand, we have some language 

that suggests that it doesn’t matter if you opt out. Those claims are 

finalized anyway. 

It may just be a matter of drafting ambiguity at best perhaps. 

It really needs to be looked at more closely because as it reads now, 

it doesn’t seem corroborate what we are hearing in other fora. 

So let me just talk about the point where the Cobell lawsuit. Basically, some people think taint basically, and the court ordered 

$455 million, and at that juncture the temptation of collusion 

loomed large. 

And I think it is fair to say that the Cobell lawsuit fell victim 

to some of that collusion. From that point forward the record reveals less lawyering for the Plaintiffs, especially the absent class 

members, and more lawyering of the deal they struck behind closed 

doors. 

19 

And frankly at that juncture the record suggests inappropriate 

participation in settlement negotiations by the presiding judge, who 

otherwise would be a trustee for absent class members pursuant to 

Rule 23[e] of the Federal Rules of Civil Procedure. 

So as soon as the dollar amount on the negotiating table went 

that high, it was clear that there was more to give than to lose, 

and it seems like it fell victim to collusion. It looks that way to 

those of us who are on the outside. 

And we hope that if the Rules of Federal Procedure and the 

Class Action Fairness Act were abided by, it would answer some 

of these questions. Thank you for the opportunity again. Thank you 

for the bit of transparency that this hearing is bringing to the 

issue. Hopefully, it will be an excellent beginning. 

[The prepared statement of Mr. Monette follows:] 

Statement of Richard Monette, Professor of Law, University of Wisconsin, 

and Former Tribal Chairman, and IIM Account Holder 

Good Morning Mr. Chairman and Members of the Committee. 

My name is Richard Monette. I am a Professor of Law at the University of Wisconsin in Madison. I am also a former twice-elected Chairman of the Turtle Mountain Band of Chippewa. Finally, I am also an IIM account holder. 

Mr. Chairman, the proposed Cobell settlement, if enacted as is, will itself be a 

breach of trust. 

As it is, this proposed settlement runs afoul of the Class Action Fairness Act of 

2005 (CAFA), the law enacted by this body to protect the interests of all parties in 

a class action. It also runs afoul of the Federal Rules of Civil Procedure (FRCP) governing class action lawsuits. That is why the named parties have requested Congress to grant broad waivers from the strictures of those laws. Plaintiffs’ attorneys 

have justified this settlement as though it were any other settlement; but it is not 

any other settlement and does not involve any other trust. This settlement involves 

the solemn Trust relationship and Trust Responsibilities between the United States 

and the Indian Tribes with which it has signed treaties and with whom it has a 

long and sometimes difficult and sometimes thoroughly enlightened history. This 

settlement, if any, should adhere to the FRCP and the CAFA. 

The proposed settlement has two main components and, as usual, the devil is in 

the details. First, the proposed settlement would establish an ‘‘Historical Accounting 

Class’’, providing payments of one thousand dollars to each class member, without 

any option to opt in or out. Second, the proposed settlement would also establish 

a ‘‘Trust Administration Class’’ that would provide payments of five hundred dollars 

to IIM account holders, with a provision to opt out, that would be deemed a complete satisfaction of any trust asset claim and wholly release the Department from 

any further liability to those who accept such payments. Finally, the proposed settlement would provide for fifteen million dollars in ‘‘incentive payments’’ for the 

class representatives and exorbitant attorney fees. 

In short, Mr. Chairman, the proposed settlement includes claims that were not 

made by Plaintiffs, including matters that do not pertain, that are not germane, or 

that are not relevant to the lawsuit. The three big ticket items in this regard are: 

1) first, the ‘‘settlement-only’’ provision that would establish a so-called ‘‘Trust 

Administration Class’’, proposing to settle non-monetary asset claims for all 

those who do not proactively opt-out, potential claims relating to oil, gas, coal, 

minerals, water, and timber, thereby releasing the Department of the Interior 

of all liability in such matters; 

2) second, the ‘‘settlement-only’’ provision proposing to establish and authorize a 

‘‘Trust Land Consolidation Fund’’ within the Department of the Interior to the 

tune of some two billion dollars; 

3) third, the ‘‘settlement-only’’ provisions establishing an Indian Education Scholarship Holding Fund that would divert some 60 million dollars from the land 

Consolidation Program to a Holding Fund whose monies are to be distributed 

by non-profit organizations nominated by Plaintiffs and confirmed by the Secretary. 

Mr. Chairman, not one of these three provisions belongs in the settlement. 

The Department of the Interior has stated that this lawsuit has cost it approximately one hundred million dollars every year of the fourteen years of this litigation. That is, perhaps not coincidentally, 1.4 billion dollars, the exact amount of the 

20 

settlement attributed to settling all claims. In other words, I guess the Tribes and 

individual Indians are supposed to be elated that the Department is willing to pay 

them money that was intended to benefit them in the first place. 

This lawsuit was originally filed in District Court as an equitable action seeking 

injunctive relief only with no monetary damages. Plaintiffs simply asked the Department to reconcile IIM accounts and to produce documentation to corroborate the 

reconciliation. 

Early in the litigation, in a bout of judicial sensationalism, the district court held 

certain Interior officials in contempt of court because they could not and would not 

produce records aiding an accounting. However, if an accounting could not be done, 

then the injunctive relief could not be ordered, and a new theory of the case based 

on monetary relief would become plausible. This is why the proposed settlement illustrates a huge leap from making equitable claims into settling monetary damages. 

In August 2009, Plaintiff’s lawsuit took a steep turn for the worse. In many people’s eyes, to invoke the vernacular, the case had tanked. The Federal District Court 

ruled that an accounting was not possible and ordered Defendants to pay 

$455 million dollars in restitution. Both sides appealed and the Federal Court of 

Appeals set aside the judgment on both points, remanding to the District Court to 

approve a plan that ‘‘efficiently uses limited government resources to achieve an accounting.’’ 

Therefore, at best, the settlement should be limited to the 455 million dollars that 

the district court ordered as restitution. At worst, the settlement should be void and 

the Department should set about the task of accounting as the Court of Appeals ordered. The Representative Plaintiffs’ counsel should be paid their actual fees and 

costs up to the point where their case ‘‘tanked’’, where they convinced the court that 

an accounting could not be done and that injunctive relief was not possible. When the district court found a $455 million dollar cause for restitution, and the 

court of appeals ordered an accounting, million dollar damage figure, and the Defendant Interior Department looking at protracted accounting exercises, both sides 

found enough incentive to pursue a settlement. 

At that juncture, the Cobell lawsuit fell victim to collusion at the expense of the 

American taxpayer. From that point forward, the record reveals less lawyering for 

the Plaintiffs, especially the absent class members, and more lawyering of the deal 

they’d struck behind closed doors. And frankly, at that juncture, the record suggests 

inappropriate participation in settlement negotiations by the presiding judge, who 

would otherwise be a trustee for absent class members. At that point, who was 

obliged to look after the best interests of the class, especially absent class members, 

as the federal rules and federal law requires? 

As soon as the dollar amount on the negotiation table went above 455 million dollars, it meant the Plaintiff class was getting more than the District Court believed 

they had made their case for. But the government didn’t give this away for free; 

inevitably, Plaintiffs would be giving up something more in return. 

Likewise, as soon as the dollar amount went above 455 million dollars, Defendants revealed the astounding willingness to pay more than they were held liable for. 

But the government didn’t give this away for free either; instead, Defendants would 

surely be getting something more in return. 

In short, the proposed settlement would relieve Defendants of more liability than 

Plaintiffs had made claim to, and would provide Plaintiffs relief for claims that they 

did not make. Primarily, what Plaintiffs would relinquish, and what Defendants 

would gain, is a settlement of so-called ‘‘Trust Administration’’ claims that were 

never part of the lawsuit, claims that Plaintiffs had neither the right nor privilege 

to cede, and that Defendants as Trustees had neither the obligation, nor the right, 

to accept. 

One has to wonder if the class representatives and their lawyers had brought this 

case not as a class action, but by themselves, foregoing up to 15 million dollars in 

‘‘incentive awards’’ and 100 million dollars in attorneys’ fees, and if after 14 years 

of litigation the Department of the Interior and the Bureau of Indian Affairs came 

to them and said, ‘‘Eloise, do we have a deal for you. We’ll give you $1000 for your 

accounting claim, and we’ll offer to settle any other claim you might have for all 

the years of trust mismanagement,’’—one has to wonder if they’d have taken the 

deal. 

Mr. Chairman and members of the Committee thank you for the opportunity to 

testify this morning and the first bit of official transparency regarding this whole 

proposed settlement. 

The CHAIRMAN. I thank the gentleman. Let me ask my first questions to Chairman Finley. Your testimony indicates that a separate 

21 

administrative process should be allowed for the trust administration class. Would you please explain why the ability to opt out of 

the class to pursue the claims individually is not sufficient? 

Mr. FINLEY. Well, the real reason why is that we tried to get out 

to people who fell through the cracks. Our hope is that the parties 

would recognize the problem and rectify it, and making the money 

available for this third option that we proposed within our suggestions and in the written testimony that you have. 

And so I guess it being an emotional issue, people want emotional closure. I think that would give them an opportunity to be 

heard, and to hopefully see some compensation for their losses that 

they incurred over the years. 

The CHAIRMAN. Are you aware of the Equal Access Justice Act 

being used in other litigation settlements against the United 

States? 

Mr. FINLEY. Yes. Offhand, I don’t really know of any others other 

than the one that was previously done in this case. We have heard 

that individuals would prefer that the attorney fees come from 

some other means? 

I think a lot of the concerns that we have heard throughout 

Indian Country, and it has been mentioned here today, that people 

have a problem with that large amount of money coming out of the 

settlement itself. 

The CHAIRMAN. All right. Let me ask Chairman Nunez. Upon 

Congressional enactment of the proposed legislation the Department of the Interior will begin implementation of the Secretarial 

Commission on Trust Reform. Do you have any recommendations 

as to how the Commission should operate? 

Mr. NUNEZ. Yes, sir. It certainly should include Indian trust 

landowners, if at all possible, and to make sure that there is certainly transparency, and that continual education and information 

be provided to the landowners. 

The CHAIRMAN. Thank you for that. Professor Monette, you testified that the United States has spent approximately a hundred-million dollars per year on attorney costs to litigate this matter. 

Yet, you question the Plaintiffs’ attorneys’ fees, in the range of 

50 to a hundred million dollars, and that is what you question, for 

the same 14 years. Why do you think the United States spent 14 

times more for attorneys’ fees than the Plaintiffs? 

Mr. MONETTE. I am sorry, I don’t understand the question, Mr. 

Chairman. 

The CHAIRMAN. Well, according to your testimony, you say that 

the United States has spent approximately a hundred-million dollars per year on attorney costs to litigate this matter. 

And yet you are questioning the Plaintiffs’ attorney fees in the 

range of 50 to a hundred-million dollars. Is that correct? 

Mr. MONETTE. Well, it is not correct. I have not really questioned 

the attorneys’ fees, although I share the concerns that the other 

panelists have raised. The hundred-million dollars that the Department has told us is that what they have spent for doing this special 

trustee work every year out of the money that they have otherwise 

gotten. 

And so what I pointed out is that it is a hundred-million dollars for 14 years, which adds up to $1.4 billion, which is the exact 

22 

amount of the settlement. So what I suggested is that the tribes— 

they apparently think the tribes and their members are supposed 

to be elated for getting $1.4 billion of money that was otherwise 

appropriated for their benefit in the first place. 

The CHAIRMAN. All right. I appreciate that clarification. Do you 

know what the average percentage award for attorney fees in other 

class action settlements is? 

Mr. MONETTE. I don’t know, and they are all over the board. It 

is not uncommon, as you know, in tribal matters for them to be 10 

percent as we have a Federal statute that is on point. They have 

been as high as 40 percent. 

But generally that has been a percentage of an amount that the 

Court has ordered, and here the Court ordered 455 million. Then 

we got two sides that basically colluded to add more money to that, 

and then for attorneys’ fees to be added. 

And it is a very clear sort of rule, Mr. Chairman, that deals with 

that issue. In fact, there are probably three or four of them. Generally, and this was part of my testimony written to you, Courts 

particularly look for signs that a class action settlement resulted 

from a reverse action. 

Collusive agreements between the defendants and the class representatives often are in exchange for generous attorney fees. As 

the ABA article that I pointed out notes, by this—and this is a 

quote—that by this tactic, the defendant hopes to preclude all other 

claims, which is precisely what is happening here with the trust 

administration claims, which is why I wrote them after that paragraph. 

The proposed settlement, at least on this issue, will be a poster 

child of such reverse action settlements. It also flies in the face of 

a very difficult development with settlements; that is, attempting 

to address the question you are asking about settlement only provisions. 

As I wrote similarly the United States Supreme Court has directed courts to scrutinize settlement only class action lawsuits, 

where classes are certified and claims are made solely for the purpose of settlement, which is what we got here; without scrutiny and 

without sufficient information. 

So we have for the first time a second class, a trust administration class, that none of us have seen before. Now it may be a good 

idea. It may be the only way to work out the kinks in this settlement, but nobody has seen it. I have not. 

I have talked to many tribal leaders, and not a single one has 

even heard of the idea—except for, of course, the very small number of tribal leaders that the Plaintiffs are working with. 

And so this is the classic settlement only provision. The proposed 

settlement provision establishing a new trust administration class 

at the eleventh hour of claims that were neither made nor litigated 

will become the poster child of the settlement only problem that 

the Supreme Court has frowned upon. 

It also likely violates our reverter clauses, although quite frankly 

that provision is so ambiguous in the proposed settlement that I 

couldn’t quite understand it. But the court disfavors reverter 

clauses which specify that unclaimed funds revert to the defendant. 

23 

First, there was all the incentive to provide more money than the 

claim asked, or more money than the court ordered, I am sorry. 

But then once the claims are made difficult to make, that money 

is reverting back to the defendant. 

That is the kind of reverter clause that precisely this body, the 

Congress, suggested are unfair in class action lawsuits, and as I 

wrote here, this is especially relevant in this settlement, since normally plaintiffs would administer distribution of awards. They are 

going to help the plaintiffs. 

The defendants are going to help the plaintiffs administer this 

award. In fact, they will play a key role. These reverter clauses 

allow counsel agree, and this is again out of the ABA article. 

These reverter clauses allow counsel to agree to inflated settlement amount that serves as the basis for calculating attorney fees, 

while providing an incentive to discourage members of the class 

from making claims. 

With attorney fees based on the overall amount, and the defendant administering claim awards, this settlement again will be the 

poster child of this frowned upon reverter clause in the rules. 

So my written testimony will point out where I think several of 

the provisions run afoul of two or three laws that this body has 

adopted to protect class participants. This settlement is asking this 

body to play along, to make broad waivers of any other applicable 

law, so that it can reach a settlement that otherwise that they 

could not have reached. 

And to grant jurisdiction to a court in ways that had not been 

granted before in this matter so that money could be on the table. 

and all we are asking is that if we can have the transparency and 

the time to look at these matters to make sure that tribes are at 

the table, and tribal leaders, and apparently that we have recognized here in the land consolidation fund. 

Tribal leaders are largely absent from the discussion in this socalled education scholarship fund. The plaintiffs are going to propose nonprofit organizations to administer scholarship funds, all 

without the tribes, and I don’t think that the tribes would agree 

with all of that. They may agree with some, but quite frankly, with 

the short timing, we really just don’t know. 

The CHAIRMAN. Mr. Hastings. 

Mr. HASTINGS. Thank you, Mr. Chairman. My first question is to 

Chairman Finley. Before redistricting, I represented the Okanogan 

County part of the Colvilles. I don’t now. I might sneak over a little 

bit there in Grand Coulee, but just a small part. 

But at any rate, you are here representing ITMA, and if you said 

it in your testimony, I missed it, but what do you hear from your 

constituents in Washington State on this issue? 

Mr. FINLEY. I think I pointed that out in my testimony, that 

many of them are questioning how this could be brought without 

their consent. I think that it has been stated earlier that this is the 

first of its kind in Indian Country, and it truly is. 

My constituents turned to me for these answers. They expect 

their elected body to bring issues like this to the forefront. In this 

case, this has not happened. So when they turned to me and asked 

me for questions, and I don’t have them, it creates a difficult situaVerDate Nov 24 2008 15:23 Apr 28, 2010 Jkt 000000 PO 00000 Frm 00027 Fmt 6633 Sfmt 6602 L:\DOCS\55393.TXT Hresour1 PsN: KATHY
24 

tion for me as a tribal leader, because I should be doing those 

things for them. 

Some of their issues are the emotional issues that you have 

heard. Some of them believe the terms as they understand them, 

if they do understand them, aren’t fair to them. Some of them 

think that they are good, and they will benefit them in a number 

of areas. 

It is across the spectrum, but I do want to underscore the fact 

that I continually have heard that they expect me as a tribal leader 

to have these answers for them, and I have tried to find those answers for them the best that I possibly can. 

Mr. HASTINGS. You would anticipate that the chairman of their 

tribes would have similar concerns and similar questions from their 

constituents, too? 

Mr. FINLEY. I have heard similar concerns from other tribal leaders. 

Mr. HASTINGS. Which then raises a question that I wanted to ask 

all three of you. I think there is general agreement that this has 

to be put behind us. We are at a point where there is at least a 

settlement in front of us, and there are some questions about that. 

The questions center on transparency and maybe a final decision 

at least, a comfort zone of all of you. So my question then to all 

of you, what would you advise us to do as we move forward on this 

process? 

Now, keep in mind that this settlement was reached on December 7, and was supposed to be culminated on December 31. It has 

now been kicked ahead to April 16, and presumably it can be 

kicked ahead again. 

But at what point and what should we be doing in order to satisfy the transparency that I sense all of you want to have more of 

and so forth? What advice can you give us? Let us start with you, 

Chairman Finley. 

Mr. FINLEY. I think if the parties involved would l do outreach 

across the nation, and throughout the various regions. That would 

go a long ways in addressing some of the concerns and questions 

that many of the Indian beneficiaries have, as well as tribal leaders. 

Mr. HASTINGS. OK. Mr. Nunez. 

Mr. NUNEZ. I certainly agree with the statement from Mr. Finley. The plaintiffs actually are scheduled to come out within the 

next two weeks to Arizona to meet with the tribes there, but I also 

think that the Department of Justice, and the Department of the 

Interior also need to do the field hearings in conjunction with Ms. 

Cobell’s group. 

But certainly all information that can be granted and provided 

to the individual allottees and tribes needs to get out there so that 

everybody can feel comfortable in moving this forward. 

Mr. HASTINGS. Professor Monette. 

Mr. MONETTE. I would ask the Committee to bear in mind that 

all of these individual Indian money accounts and the interest are 

derivative of these peoples’ membership in tribes, largely derivative 

of their membership in tribes that entered into treaties with the 

United States. 

25 

And those tribes belong and deserve to be at the table. I would 

add that perhaps there could be a judicial referral of the money 

claims to the Federal Court, waiving the United States sovereign 

immunity, so that the Court could actually address these matters, 

and maybe the settlement then would make more sense. It would 

not appear to be as collusive. 

I would ask this body to direct settlement negotiations to comply 

with the Class Action Fairness Act, and the Federal Rules of Civil 

Procedure. They can be waived at the end, because obviously that 

is what we are asking now. 

But right now, we haven’t had a settlement with them applying. 

It would be nice if their settlement negotiations were in compliance 

with those laws, maybe with the idea that there would be some 

necessary waivers at the end. 

But right now those laws are requiring the things that I mentioned, and very stringent requirements regarding notice. I think 

that it is fair to say that that has not been followed, the clear, concise, and easily understood language, and the Supreme Court addressing that rule in a recent case requiring a desire to actually inform absent class members. 

I am a member of this class, and I can say in no uncertain terms 

that I have never once, in no way, shape, or form, have I ever been 

contacted by a Plaintiffs’ attorney or by the named Plaintiffs to ask 

what I thought, to ask what I felt about it. 

This Committee and your staff know that I am pretty easy to 

find. So I think that should be complied with as well. 

Mr. HASTINGS. Well, ultimately the decision rests with us, because we have to have legislation, which by the way has not been 

introduced. At what point, I guess in this whole process, should we 

feel a comfort level that you have all been satisfied that the transparency and the procedures are enough to satisfy all of Indian 

Country, or is that the 64-dollar question always? Any one of you. 

Mr. MONETTE. I think when the tribal leaders are given a chance 

to look at it and to talk about it, and right now at first blush, we 

are going to find tribal leaders that absolutely oppose this at one 

end, and those who think, oh, it absolutely should go forward, and 

at the other end, we could cherry pick from either end. 

If they all get a chance to talk this out, I think we will come up 

with a consensus, and if the tribal leaders, true to my talk here 

this morning, if they think that this should go forward, I am all 

for it. 

Mr. HASTINGS. Well, that then lends this opportunity, because if 

we are going to have to ultimately make that decision, we are going 

to have to hear from tribal leaders and individuals. 

We have already, and we welcome that. I think that on all sides 

that they welcome that, but if there is some real heartburn, so to 

speak, on this process, we really need to know what that heartburn 

is, and the depth of that heartburn throughout this whole process 

before we can make that decision. 

So I would respectfully ask all of you with the contacts that you 

have throughout Indian Country to share that with us as soon as 

possible so that we can proceed forward. Thank you, Mr. Chairman. 

26 

The CHAIRMAN. The Gentleman from American Samoa, Mr. 

Faleomavaega. 

Mr. FALEOMAVAEGA. Thank you, Mr. Chairman. I was just going 

to follow up with my good friend from Washington’s question, as 

well as his opinion, and I was going to ask all three of you gentlemen is it your understanding that in order to move this proposed 

settlement that is now being discussed, that there has to be some 

kind of a Federal legislation to actually implement the process, or 

can this just be done by Executive Authority of the Administration? 

Mr. FINLEY. It is also my understanding that the decision rests 

with Congress to give the Court the authorization to move forward 

on the settlement terms that are before everybody today. 

Mr. FALEOMAVAEGA. It is also my understanding that legislation 

is required. Mr. Monette. 

Mr. MONETTE. Earlier on, we were told—we were told 14 years 

ago told really about the strategy and genius of the strategy of the 

case, that it was not asking for money. So it would not run any red 

flags up the poles. 

It was simply asking for a correct accounting, a reconciliation, 

and that is why it was able to be brought in the Federal District 

Court as a declaratory and injunctive matter. 

But as soon as the accounting—and we were told evidently that 

the appeals court does not agree, but we were told that an accounting can’t be done, and the monetary damages became more plausible. 

But in order to get monetary damages, as you know, that requires a waiver of sovereign immunity from the United States, likely a judicial referral on this. So the settlement as it is cannot be 

done solely by the Executive Branch, by the Administration. It requires this body’s stamp of approval as it is. 

Mr. FALEOMAVAEGA. Well, as you know, in the years that I have 

served as a member of this Committee, we have had this yo-yo relationship going back and forth between the Administration and 

the Congress in determining exactly how much money is involved 

here in this mismanagement. 

And I believe that this is one of the critical factors as to why Ms. 

Cobell felt that we need to file a lawsuit because we are not getting 

anywhere. Now, 14 years later, we are now at this point, and as 

I said previously in my statements, I cannot believe that this is the 

amount of money that is being involved. 

And I honestly believe it is a lot more than $3.5 billion or whatever. I wanted to ask you when Ms. Cobell initiated the lawsuit, 

what was the reaction from the Indian Country? 

Did any of these 250 tribes go and give their moral support, as 

well as financially, when she was struggling to put this through 

the Federal Court system? Professor Monette. 

Mr. MONETTE. I think it is fair to say that my tribe did. My tribal leader, who I respect greatly, Twila Martin Kekahbah, at that 

point pulled me aside and talked with me about it. 

I know that there were very warm feelings for the Native American Rights Fund at the time, and that we thought that the Native 

American Rights Fund was going to see this case through to the 

end, and win all those $170 billion that Mr. Faleomavaega would 

27 

apply here, and I am all with you on that, and NARF would get 

their fair share of that. 

Looking at the settlement today, the Native American Rights 

Fund is not even listed as class counsel, and I am sure that they 

want to be, but I am also sure that they recognize at this point that 

there are some very sort of dangerous conflicts of interest for them 

putting it in there today. But I can tell you at that time that that 

is the discussion that we had. 

Mr. FALEOMAVAEGA. I sense also from reading your statement 

and your comments, Professor Monette, that in your honest opinion 

that the current process has evolved with the involvement of the 

Department of the Interior. 

Is the process agreeable to you, both legally and policy wise, or 

do you have some serious questions on how we came up with where 

we are now, where Secretary Salazar has given agreement to this 

proposed $3.7 billion that we are going to provide in the settlement. 

Mr. MONETTE. One thing that we have not heard yet, and I assume that we will, but the Department certainly hasn’t been with 

clean hands throughout this process. We have seen them basically 

taking five IAM accounts and massaging them into one over time. 

We have seen them preparing for this settlement, where we have 

people who have trust interests in land out there, who had no IAM 

account, and they created an IAM account. All of this is to cast the 

broader net for buy-in, along with the land consolidation funds, and 

scholarships, and all of that. 

There has been authority for land consolidation since 1934 frankly, since the Indian Reorganization Act. There have been authorization from this body for scholarships. They have always been under 

funded, and they should be funded. 

What they have to do at this settlement other than dangling a 

carrot in front of people for buy-in is beyond me. There is a better 

process. We are better than this. This is of a historical moment for 

our people. 

Fifty years from now, we will look back and look at that, frankly, 

indefensible law that this body passed a hundred plus years ago, 

the General Allotment Act, and we will look at this as an attempt 

to fix part of it forever. 

And I hope it would as well, but if we are going to do that with 

that much historical moment, we might as well do it right. 

Mr. FALEOMAVAEGA. Thank you, Mr. Chairman. I think my time 

is up. If I could just raise one short comment to Mr. Nunez, the 

Chairman and member of the Tohono Tribe in Arizona. 

I visited your tribal nation there a couple of hears ago with my 

cousins, who played for the University of Arizona football team, 

and I just wanted to ask you if our high school football team is 

coming along OK. 

I am going to ask my cousin, who is currently the defense coordinator for the University of Arizona, to pay you another visit to 

make sure that our high school there is coming along OK, and if 

it is OK with my friend, Rau ́l, here, we can do that. Thank you, 

Mr. Chairman. 

The CHAIRMAN. The gentleman from Louisiana, Mr. Cassidy. 

28 

STATEMENT OF HON. BILL CASSIDY, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF LOUISIANA 

Mr. CASSIDY. Mr. Monette, I heard an expression once that the 

enemy of the good is the better. Now, I think that has a lot of 

truth. I have been here about a year, and it seems like it is very 

hard to get anything done. If you are talking about 50 years from 

now, it almost seems like this could still be litigated 50 years from 

now. 

Clearly, there are some problems with the legislation. On the 

other hand, it does seem to redress some things which need to be 

redressed, and it seems to bring conclusions to something that 

seems like it could go on forever. 

What are your thoughts about that statement? And, Mr. Nunez, 

I appreciate both of you gentlemen’s perspectives on that, too. 

Mr. MONETTE. I am in agreement that the time is now or near 

to get this all behind us. 

Mr. CASSIDY. But it doesn’t seem like it is going to happen now 

in a year. 

Mr. MONETTE. The problem with that is the broad brush that 

this has been done, and the devil is in the details, or the devil 

should be in the details here, and some of the details are missing. 

My tribe, for example, the Turtle Mountain Band of Chippewa, 

the reservation was too small when the allotment came, when the 

Allotment Act came about. So, twenty-five hundred heads of households were granted allotments 500 miles away from the tribe, in 

South Dakota, in Minnesota, and in Montana. 

Those allotments are so far from the tribe that the tribal government, as a tribe, as a collective body, has not been able to pay attention to those claims and those allotments over the years. 

Many of them have been lost. We on occasion find telephone lines 

running through the middle, and we find that some of them have 

had oil pumped out of them without there ever being a lease. 

This was all the subject of the Senate Committee on Investigations, a long investigation about 20 years ago, over three years. 

Now, none of that has been resolved yet. Some of those claims 

could be worth frankly thousands or millions. 

But this legislation will dangle in front of my tribe and my tribal 

members, where there is 80 percent unemployment, dangle $500 in 

front of them, and say will you take this in exchange for whatever 

has happened in the past, and I am afraid that they are going to 

say yes. And everybody has got their own will, but at least I want 

them to know that. 

Mr. CASSIDY. Let me hear from the other two gentlemen. 

Mr. NUNEZ. I would say that there are some issues that will be 

resolved through the settlement. However, as you mentioned, and 

others have mentioned, there are other issues that will not be addressed. 

And it is very uncertain how they will be addressed in the future. 

However, I believe that more support from the Department of the 

Interior needs to be provided so that they can assist the tribes and 

the individual allottee landowners. 

Without that support and qualified staff to be able to delve into 

the fractionation issues, and the boundary issues, it will still be 

there. 

29 

Mr. CASSIDY. So we are focusing on the money, but the corrective 

direction to the Interior would be one very good part of this settlement, and that going forward theoretically, this would not continue 

to be an issue. So you would focus on that as a good that would 

be a strong reason for supporting the settlement? 

Mr. NUNEZ. Yes, sir. 

Mr. CASSIDY. Independent of whether or not we can dispute 

about the money. Mr. Finley. 

Mr. FINLEY. I agree now or near is the time to do it, but I think 

we need to be deliberate about it. The Indian beneficiaries need to 

be informed. They want transparency. The tribal leaders want 

transparency. 

So if this is to move forward, we need to keep that in mind, that 

that is what we want at the very least, because we are talking 

about a hundred years of history here. Yet, we are being asked on 

the other hand by some to say, well, don’t ask questions right now. 

It could prevent things from moving forward. 

Your opportunity to ask questions will come later. That is a 

tough sell to people in Indian Country who have experienced all 

the injustices over the years. It is not the same Indian Country 

that once existed then. People are self-empowered, and are not 

afraid to ask questions, and they want their questions answered. 

Mr. CASSIDY. So, Mr. Finley, and Mr. Nunez, what level of outreach have you seen or would you expect prior to this settlement? 

What do your members tell you that they are hearing about the 

benefits that will accrue to them from this settlement? 

Mr. NUNEZ. Well, in our case, the Santa Vera Lodge Association 

has supported the settlement. I am not real sure about the allotment owners in Hill River and Salt River, in those areas. 

But I believe as I mentioned earlier that just getting out there 

and talking to them, and making the presentations about the settlement will go a long ways to helping them understand. 

And through those presentations, then if there are questions and 

concerns, then we will hear about them, and then we as the Indian 

Land Working Group, would also be willing to assist them with regard to their concerns. 

Mr. CASSIDY. Mr. Finley, you were going to answer? 

Mr. FINLEY. I would have to agree with that comment. It is my 

understanding that there are outreach efforts currently in the 

works right now with an organization in the northwest. 

Certainly ITMA would be more than happy to help assist in that 

process to get the information out to the people, and I think that 

if the parties involved were to participate in that, which it is my 

understanding that they do plan to, then I think that will go a long 

ways in addressing some of the problems, concerns, and questions 

that I have heard within recent months. 

Mr. CASSIDY. Thank you. 

The CHAIRMAN. The gentleman from Arizona, Mr. Grijalva. 

Mr. GRIJALVA. Thank you, Mr. Chairman. I have kind of a wandering question for all three, and thank you very much for you testimony. it was very edifying. The issue of class notification, I have 

heard it from all three of you that it is important that Indian 

Country be involved in knowing, and being notified of what the 

proposed settlement is. 

30 

The issue of collusion, I don’t know how you resolve that other 

than to halt any legislative initiative until that is judicially investigated, which I think was a suggestion. 

But at the same time, there is an urgency, and I want to deal 

with that urgency question. Can we accomplish putting together 

the legislation to carry out the settlement with urgency, and I 

think the issue of historical—the hundred years—is appropriate, 

and has to be part of the context. 

The last 14 years has to be part of the context. So, there is for 

many people an urgency to move this settlement forward and to 

close this chapter, and move on to other chapters, which requires 

the Department of the Interior to continue their responsibility in 

a very serious way. 

So is it doable to move forward with urgency, and with deliberate 

speed, or hold the process in abeyance until issues of class notification, and collusion, are settled. And I pose the question, and I don’t 

mean to make it either/or, but it is, because I think—well, never 

mind. Go ahead. 

Mr. FINLEY. I would support it moving forward. I would just hope 

that our recommendations that are in the written testimony are 

given due consideration as we move through this process. 

I hope that as many questions that linger out there are answered, and I hope that opportunity will be given to those who fall 

through the cracks, and who really aren’t included in the Class II 

portion be given an opportunity, instead of just or you can opt out. 

I think that the history shows that these people deserve an opportunity. They don’t always have the means, the financial means, 

or even the physical means, that it takes, the wherewithal if you 

will, to see that through. 

Mr. GRIJALVA. Describe opportunity for me if you don’t mind. 

Mr. FINLEY. Well, in my written testimony, we had offered a 

third option. 

Mr. GRIJALVA. OK. 

Mr. NUNEZ. I would say that we could meet the outreach efforts 

within the time frame that we are allotted, and again, if we just 

explain all the aspects of it, and answer the concerns as best as 

possible. 

I believe that we will get to the landowners and the tribal governments to be able to bring this to closure. 

Mr. GRIJALVA. OK. Professor. 

Mr. MONETTE. You know, there are probably five thousand studies out there that all conclude one sentence pretty much, and that 

is that people are OK to lose. They are OK to be adversely affected 

as long as they feel that the process was fair. 

And so far, I don’t think they feel that way. This is a start. I recognize that there is urgency, but deliberation and transparency will 

be important here for what Congress does. 

I note that Congress has plenary power, and so Congress can do 

it at once. My old dad, who was successfully elected to our tribal 

council more times than anybody had ever been, he always called 

it—he always said to me, so Congress has plenty power. They do. 

Mr. GRIJALVA. We don’t use it well sometimes, but it is plenty. 

[Laughter.] 

31 

Mr. GRIJALVA. At the end of that deliberate outreach with some 

urgency attached to it is the goal unanimity of opinion or is the 

goal for people to be informed of the people affected? 

Mr. NUNEZ. I would say both. 

Mr. GRIJALVA. OK. 

Mr. FINLEY. I would agree. 

Mr. GRIJALVA. OK. Thank you. I yield back, sir. 

The CHAIRMAN. The gentlelady from Wyoming, Ms. Lummis. 

Mrs. LUMMIS. Thank you, Mr. Chairman. And I appreciate this 

hearing. I am just trying to help the tribes that reside in Indian 

Country within the State of Wyoming, but Northern Arapaho and 

Eastern Shoshone understand what is being proposed here. 

Chairman Finley, I want to clarify a little bit about how somebody can opt out. For those within the trust administration, or 

damage claims classification, you raised some concerns about what 

the process would be for an individual. 

Can you or either of our other two witnesses today share any additional insight with me as to what frame work the settlement 

agreement establishes for an individual who pursues the opt out 

provision? 

Mr. NUNEZ. My understanding is that if one wishes to opt out, 

then they can seek their own legal counsel to pursue their concerns. Granted, however, there are a majority of our Indian people 

that may not have the means to do so. However, we are still giving 

them that option that is there. 

Mrs. LUMMIS. And I also understand that individuals with damage claims, they will be given approximately $500, plus a stipend 

based on a preset formula. Do you know how this payment compares to past successful damage claims of this nature, or is there 

a standard that we can look to, to see if this is reasonable? 

Mr. NUNEZ. Personally, I am not aware. 

Mr. FINLEY. I am not either, but I can say that this is new to 

Indian Country, the class action lawsuit, as it is being brought forward now. 

Mrs. LUMMIS. Thanks, Mr. Finley. Another question for you. You 

mentioned in your testimony that you think the attorneys’ fees 

should come out of the Equal Access to Justice Act, the EAJA 

Fund, instead of the judgment fund, which may be reasonable, except that I would alert you that each places no firm cap on the 

amount of attorneys’ fees that can be recovered. 

So how would Congress ensure the level of funding being directed toward attorneys in this case is appropriate? 

Mr. FINLEY. I don’t know. As you pointed out, the decision rests 

with you, but if you would like an answer from me, I will work on 

that and get it back to the Committee. 

Mrs. LUMMIS. Well, thank you, and I will mention to you that I, 

along with two other members of this Committee, including Representative Herseth Sandlin, who is here today, have recently introduced legislation that would require the Federal Government to 

make transparent the attorneys’ fees that are paid out under each. 

For the last 15 years, there are no records of how much the hourly rate was, to whom they were paid, whether it was a settlement 

or a judgment amount that was paid out under EAJA, and to 

32 

whom, and so we are trying to shine some light on attorneys’ fees 

paid out under EAJA. 

And given the amount of attorneys’ fees in this settlement, it 

may appear to be somewhat open-ended. It is a pretty broad range, 

50 a hundred-million. What assurance is there that Indian Country 

will ever know how much attorneys ultimately receive as a result 

of this settlement? 

Mr. FINLEY. I don’t know that we will know. I would like to think 

that we would, considering everything that is at stake, and all the 

individual beneficiaries who will be compensated, or who choose to 

opt out, or whatever happens as we go through this process. 

But as you heard today, people are interested in that topic. People are concerned about it, and they want to know the answers to 

that. So I would like to think at the end of the day that we will 

be able to see that number and know and look at it. 

And you mentioned earlier that you were not aware of what the 

attorneys’ fees were, et cetera. I thought our tribe was the only one 

that had that problem, but evidently I was wrong. 

Mrs. LUMMIS. That is true throughout EAJA, and that is true regardless of the Federal Agency that has been sued under EAJA, 

and we hope to rectify that. Thank you very much for your testimony. Mr. Chairman, thank you. 

The CHAIRMAN. The gentleman from New Mexico, Mr. Heinrich. 

Mr. HEINRICH. I have just a comment for Chairman Finley. I appreciate you bringing up the issue of consultation with tribes on 

the implementation of the Tribal Land Consolidation Fund. 

I think that if we are to approve this, that is a critical piece moving forward, and I would certainly welcome the opportunity to 

press for adequate consultation as we move forward on this. 

Mr. FINLEY. I appreciate that. 

The CHAIRMAN. The gentlelady from South Dakota, Ms. Herseth 

Sandlin. 

Ms. HERSETH SANDLIN. Thank you, Mr. Chairman. I don’t have 

any questions for this panel, but I want to thank you for having 

this hearing. I thank the witnesses for their perspectives and what 

they have offered to the Committee. 

Mr. Chairman, as you know, I represent nine sovereign tribes in 

South Dakota, and this agreement, if approved by Congress, would 

have a profound impact on the State. There are approximately 20 

thousand of the accounts that are held by individuals within the 

State’s borders, and this is the largest number of any State. 

We do know that there are various—either regional or national— 

associations or individual tribes that are weighing how this should 

go forward, possibly looking at resolutions desiring more hearings, 

more consultation, more information. 

In that regard, I do think it is important that as we assess the 

views of the various account holders that they do feel, and as the 

professor indicated, that there was a fair process. That they had a 

chance to fully understand the ramifications of this agreement, and 

in that respect, I do want to recognize Ms. Cobell. 

She has taken the time to visit Indian Country in South Dakota 

most recently, in the Pine Ridge and Rosebud Reservations, to answer questions. And I think it is just important that we ensure fair 

process, and part of that is having this hearing today to get a betVerDate Nov 24 2008 15:23 Apr 28, 2010 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6602 L:\DOCS\55393.TXT Hresour1 PsN: KATHY
33 

ter and broader perspective of the ramifications of the agreement, 

and the perspectives of the Administration, different tribal leaders, 

as well as Ms. Cobell herself. So I thank you, Mr. Chairman, for 

the opportunity. 

The CHAIRMAN. Any other Members of the Committee wish to be 

recognized? If not, gentlemen, we thank you for your testimony 

today. The Committee will now hear from The Honorable David 

Hayes, a Deputy Secretary, United States Department of the Interior, Washington, D.C., accompanied by The Honorable Hilary 

Tompkins, Solicitor, United States Department of the Interior, 

Washington, D.C. 

And our second panelist will be The Honorable Thomas J. 

Perrelli, Associate Attorney General, United States Department of 

Justice, Washington, D.C. We welcome each of you. We do have 

your prepared testimony. It will be made a part of the record as 

if actually read. David, we will recognize you first. Welcome back 

to the Committee. 

STATEMENT OF HON. DAVID HAYES, DEPUTY SECRETARY, U.S. 

DEPARTMENT OF THE INTERIOR, WASHINGTON, D.C.; 

ACCOMPANIED BY HON. HILARY TOMPKINS, SOLICITOR, U.S. 

DEPARTMENT OF THE INTERIOR, WASHINGTON, D.C. 

Mr. HAYES. Thank you very much, Mr. Chairman, and Members 

of the Committee, it is a pleasure to be here today to respond to 

questions about this very important settlement. 

I want to first at the outset let all of you know that this has been 

from day one an incredibly high priority for this Administration to 

see if we could resolve this long-running Cobell lawsuit. 

It has taken 13 years, hundreds of millions of dollars in litigation 

on both sides, 20 appellate opinions, dozens literally of hearings 

and trials, scores in fact of hearings and trials, and it has been a 

corrosive case that has hurt the relationship between the United 

States and Indian Country. 

From day one, Hilary Tompkins, to my left, the first ever American Indian Solicitor at the Department of the Interior, and I, on 

behalf of the Secretary, took this on personally to see if we could 

through our personal involvement at the highest levels, break 

through what had been 13 years of failure basically to try to reach 

closure on this. 

We were joined at the hip by Attorney General Eric Holder, and 

his top associate, Deputy Attorney General Tom Perrelli. We were 

personally engaged in these discussions, and we worked with a 

team that represents the class affected by this settlement. 

The 300 to 500 thousand individual Indians are represented 

through the class action by a team of lawyers, and the relentless 

and impressive Elouise Cobell, who you will hear about, and hear 

from in the next panel. 

We feel that this settlement is a fair settlement, and an appropriate settlement, and I am going to defer to Tom to talk about 

some of the legal aspects that have been raised in this hearing. 

Let me just mention a couple of issues of special importance to 

the Department of the Interior, and our trust responsibility to the 

individual Indians who have trust accounts and to tribes who have 

trust accounts. 

34 

It is our view that we need to resolve these historical issues and 

set the course, and turn the page, and look ahead, and repair our 

management of trust assets with the tribes, and look ahead and 

not behind. 

Toward that end it was very important to the United States, and 

we think it is very important for this Congress that this chapter 

be closed, and that the backward looking of historical accounting 

be fully accounted for, and resolved, and that means not just the 

question of whether the accounting has been done, but also woven 

into the issue is the question of in addition to the accounting, the 

green eye shade work, has the assets themselves been mismanaged. 

That was all an important element, and we thought if we just 

resolved the question of the accounting, and didn’t deal with the 

question of mismanagement, we would be back here spending literally $50 million a year as far as the eye could see. 

So we went to the class, and the class will work with the Judge 

as Tom will explain, to work through that element of the settlement. We wanted to close the book and look ahead. 

And toward that end, Mr. Chairman, and Members of the Committee, as explained in my written testimony, as soon as this settlement goes forward, we are impaneling a new commission to ensure that as we move forward with our trust management that we 

are taking the best of what we have learned over the last 13 years. 

We will hire folks. We are going to have a five-member panel, 

well represented by Indian Country. We are going to look at what 

worked and at what didn’t, and we are going to see how we reorganize the Department, in terms of the trust management issues. 

We have an Office of Special Trustee. We have a Bureau of 

Indian Affairs, with different responsibilities, and some conflicts in 

terms of customer service at the least. We want to do it right. 

This was a very important point by Elouise Cobell and her colleagues here, and we accept it. We want tom move forward and do 

this right going forward. Let me finally—and one aspect of doing 

it right going forward that we were very insistent on—is that part 

of the problem that led to Cobell is the fractionation of Indian 

lands. 

And the fact that over time we now have four million individual 

interests in highly fractionated tracks of land that do nobody any 

good, and the expense is enormous, and the opportunity for error 

and mismanagement is enormous. 

So we worked with the Plaintiffs to have as part of this settlement a resolution of that root cause problem of fractionation. That 

is why the $2 billion associated with getting money back into the 

pockets of these individual Indians, and at the same time freeing 

up those lands, and taking away the root cause of these errors of 

these individual accounts is so important, and why we are so excited about the settlement. 

Let me say finally that in terms of how we implement that settlement, we are looking forward to vigorous government to government consultations with all of the tribes on how we implement. 

And to your point, Congressman Heinrich, the land consolidation 

program, because this is going to be a benefit to the tribes, as well 

as to the individual Indians who are settling in this matter, and 

35 

we want their help, in terms of prioritizing lands that should be 

acquired through this program, and working with them every step 

of the way. 

And as we can talk about in the Q and A, we are anxious to 

make sure that the word and understanding about this settlement 

gets out in Indian Country. We have done a number of outreach 

efforts already. We are ready to do more. 

We frankly thought it presumptuous to go out and assume that 

this settlement would be approved by the Court and by the Congress without getting your approval first, and we look forward to 

getting that in the near future. Thank you, Mr. Chairman. 

[The prepared statement of Mr. Hayes follows:] 

Statement of David J. Hayes, Deputy Secretary, 

U.S. Department of the Interior 

Good morning Mr. Chairman, Mr. Hastings, and members of the Committee. 

Thank you for the opportunity to provide the views of the Department of the Interior (Department) regarding the Settlement that has been reached between the 

United States and the plaintiffs in the Cobell class-action lawsuit and accompanying 

legislation, the ‘‘Individual Indian Money Account Litigation Settlement Act.’’ The 

Cobell case, which devolved into contentious and acrimonious litigation over the Department’s trust management and accounting of hundreds of thousands of individual Indian trust accounts, has hindered U.S. efforts to work effectively in Indian 

Country for more than a decade. During these years many members of this Committee have signaled a desire for the agencies involved in this litigation to find a 

way to bring the case to resolution. And in December 2009, we achieved an agreement. I am very pleased to say that the Settlement we have reached is a fair one, 

a forward-looking one, and one that I am certain will strengthen the relationship 

between the federal government and Native Americans. This Settlement will enable 

us to move ahead together and to focus on the many pressing issues facing Indian 

Country. 

The agreement is the product of good faith, arms-length negotiations between the 

United States and plaintiffs. It not only resolves litigation over the U.S. government’s management of hundreds of thousands of individual Indian trust accounts, 

but also addresses one of the root causes of the trust accounting controversy—namely, the fact that tens of thousands of individual accounts have proliferated through 

the years due to the continued ‘‘fractionation’’ of Indian ownership interests in land. 

This has led to large and growing expenses related to the tracking of small trust 

accounts, opportunities for trust accounting errors, and the unavailability of highly 

fractionated lands for productive uses. 

This negotiated agreement lays out a path for the responsible management of 

Indian trust assets in the 21st century. The agreement strengthens the trust relationship between the United States and our Native American citizens, a relationship 

that has at times been fraught with challenges but a relationship which the members of this Committee have long sought to develop into one of mutual respect and 

understanding. In this statement, I will briefly describe the components of the proposed Settlement and related steps being taken by the Department to improve our 

management of Indian assets. I am accompanied today by Hilary Tompkins, the Solicitor for the Department and the first American Indian to hold that post. Ms. 

Tompkins participated actively in the negotiations, which I led on behalf of the Secretary of the Interior. 

Accounting and Trust Administration Claims Settlement 

The first part of this settlement agreement resolves claims related to the classaction lawsuit brought by the plaintiffs in Cobell v. Salazar. The case centers 

around the U.S. government’s accounting of over three hundred thousand individual 

American Indian trust accounts. The Settlement would resolve not only the plaintiffs’ claims for an historical accounting for funds that the government holds in individual American Indian trust accounts, but also all claims associated with the management of these trust funds and the underlying trust assets (consisting of land and 

resources that are held in trust for individual Indian members of the plaintiff class). 

The Settlement addresses all existing and potential trust-related claims that the 

plaintiffs may have against the United States to date, and thus brings final closure 

to this long and difficult issue. 

36 

Under the terms of the Settlement regarding trust management and accounting 

issues, approximately $1.4 billion would be distributed to the class members, which 

consist of certain American Indians and Alaska Natives, as defined in the Settlement. Each class member with an historical accounting claim will receive $1000 and 

class members may also receive additional funds related to trust management 

claims under a formula set forth in the settlement agreement. By addressing alleged 

mismanagement as well as accounting-related claims, this settlement fund will fully 

resolve all potential claims by individual class members and avoid all further ‘‘lookbacks’’ regarding prior fund accounting and trust management issues. 

Because the question has come up frequently in discussions about this Settlement, 

I want to briefly address the issue of attorneys’ ’ fees. The Settlement provides a 

fair structure for determining the proper amount of attorneys’ fees. Under that 

structure, attorneys’ fees would be paid out of the $1.4 billion settlement fund (and 

so would not require additional taxpayer funds), and would be in an amount which 

the court will decide. Under the Settlement, the plaintiffs have agreed that they will 

not ask the court to make an award outside the range of $50 million to 

$99.9 million to compensate plaintiffs’ attorneys for work they have performed since 

the case began more than 13 years ago. Individual Indians may object to any such 

requests, and the United States believes that as much of the fund as possible should 

go to the individual class members. If the judge awards a figure within that range, 

the parties to the Settlement have agreed that they will not appeal the court’s determination. The Settlement provides that when the federal judge makes a decision regarding the appropriate level of attorneys’ fees, he will have before him the plaintiffs’ attorneys’ actual records of the time they spent working on this case. 

The plaintiffs’ attorneys also have the right under the Settlement to ask the court 

to approve payments for work performed after the date of the Settlement, based 

solely on attorney hours and actual billing rates and actual expenses and costs incurred, up to a capped amount of $12 million. The government and individual 

Indians may object to any such requests, and the court may award less than the 

amount requested. Negotiating for payments of attorneys’ fees is a typical part of 

the resolution of class action cases, and the approach taken in this Settlement is 

a fair and reasonable one. 

Correcting Fractionation 

The second part of this Settlement contains provisions designed to address the 

‘‘fractionation’’ issue that is one of the root causes for the allegations included in 

plaintiffs’ claims, and which needs to be addressed in order to reduce potential liability for Cobell-type claims in the future. This problem consists of the continued 

proliferation of new trust accounts as land interests held in trust for individual 

American Indians continue to subdivide (or ‘‘fractionate’’) through inheritance processes. The Settlement and legislation provide for a $2 billion fund for the buy-back 

and consolidation of fractional land interests. The land consolidation fund addresses 

an historic legacy of the General Allotment Act of 1887 (the ‘‘Dawes Act’’) and other 

related allotment statutes, which divided tribal lands into parcels of between 40 and 

160 acres in size, allotted them to individual Indians, and sold off remaining 

unallotted Indian lands. As original allottees died, their intestate heirs received 

equal, undivided interests in the allottees’ lands. Today, it is not uncommon to have 

hundreds of Indian owners for one parcel. 

The result of the continued proliferation of thousands of new trust accounts 

caused by the fractionation of land interests through succeeding generations is that 

millions of acres of land continue to be held in such reduced ownership interests 

that only a small percentage of the individual owners derive a meaningful financial 

benefit from their ownership. Indeed, as of September 30, 2009, there were approximately 140,000 tracts of land owned by individual Indian allottees and more than 

four million interests. It has been estimated that these four million interests will 

expand to eleven million interests by the year 2030 if the actions contemplated in 

this Settlement are not taken. This situation creates more harm than good for the 

individual owners, the tribes and the federal government. The proliferation of individual interests creates obligations for the Department to undertake a detailed accounting for tens of thousands of very small accounts, thereby triggering both expense and opportunity for errors such as those alleged in the Cobell litigation. In 

addition, because there are multiple owners of land, often with individuals having 

very small shares, it typically is impossible to obtain consent from the owners regarding steps to ensure the productive use of such lands. As a result, in too many 

instances, tribes find economic development efforts stymied by their inability to utilize heavily allotted tracts of land for much needed energy, commercial, and agricultural development. 

37 

Under the provisions of the Settlement for land consolidation efforts, the Depart- ment would use a $2 billion fund for the buy-back of fractional land interests. The 

Department would use existing programs and law to make these acquisitions, with 

additional authority that would be provided under the proposed settlement legislation for the conveyance of interests held by persons who cannot be located after engaging in extensive efforts to notify them and locate them for a five-year period. 

Because the value of many highly-fractionated interests in land will be very small, 

and owners of those interests may not be inclined to cash out their small interests, 

the Settlement sets aside up to $60 million for use in incentivizing the sale of 

fractionated interests. More specifically, contributions can be made on behalf of sellers of fractionated interests to an existing non-profit organization that provides 

scholarships and other support for educating American Indians and Alaska Natives. 

Long-Term Trust Reform 

To address the future of Indian trust management, on December 8, 2009, Secretary Salazar signed a Secretarial order to establish a five-member national commission to evaluate ongoing trust reform efforts. The commission will make recommendations on the future management of individual trust account assets and the 

need for comprehensive auditing of these operations. While the Department has 

made significant progress in improving and strengthening the management of 

Indian trust assets, our work is not over. The Commission will make recommendations regarding how to improve trust management services on a going-forward basis, 

such as recommendations regarding the appropriate roles of various Interior agencies including the Office of Special Trustee and the Bureau of Indian Affairs. 

Conclusion 

I hope you will help us to secure swift enactment of the necessary legislation. As 

the members of this Committee are aware, this Settlement is a starting point, not 

an ending point. It is time now to move beyond the litigation and to commit to working cooperatively with American Indian and Alaska Native communities to address 

education, law enforcement, and economic development challenges. Moving forward, 

Secretary Salazar and I are committed to conducting government-to-government 

consultation with tribes to make sure that this Settlement is fully understood by 

the people who will be most impacted by it and to seek vital tribal input on, and 

assistance with, implementation of the land consolidation component of the Settlement. With this Settlement we will turn the page on a dark chapter in Indian Country and begin to move forward, together, towards our common goals. 

Thank you for the opportunity to appear before you today. I look forward to answering your questions. 

The CHAIRMAN. Thank you, David. Mr. Perrelli. 

STATEMENT OF HON. THOMAS J. PERRELLI, ASSOCIATE 

ATTORNEY GENERAL, U.S. DEPARTMENT OF JUSTICE, 

WASHINGTON, D.C. 

Mr. PERRELLI. Good morning, and thank you, Chairman Rahall, 

and Ranking Member Hastings, and other Members of the Committee. The litigation, known as now Cobell v. Salazar, has lasted 

13 years, and has been an extraordinarily important issue for this 

Committee, and for the United States, and it has cast a shadow on 

the United States nation to nation relationship with tribal governments and their members. 

We at the justice department view the December 7th settlement 

as historic, and we think that we are given a choice of now ending 

that litigation finally or returning to the courtroom, and we think 

the opportunity presented by the settlement is worth seizing, because we think it is fair to the Plaintiffs, and responsible for the 

United States, and provides a path as Mr. Hayes said for moving 

forward in the future. 

We very much welcome the opportunity to answer questions and 

dispel some of the misconceptions about the settlement. As has already been discussed, the settlement contains many key elements 

38 

that Members of Congress and both parties have sought to address 

in prior efforts to resolve this matter. 

It resolves historical accounting claims, thereby providing a 

$1,000 check to be sent to each member of the class, and bringing 

the government and each holder of an individual Indian money account into agreement on the balance of each account. 

And I would say that that piece of the settlement, and the language that was quoted on the prior panel, addresses just accounting claims, and not the trust mismanagement claims. So I don’t 

think there is any uncertainty there. 

Second, the settlement also addresses trust administration or 

mismanagement claims. Those are claims that allege over the 

years the government has mismanaged hundreds of thousands of 

acres of land and millions of dollars, including proceeds from them 

that it holds in trust for individual Native Americans. 

Over the last 14 years, these claims have long been linked with 

this lawsuit. Much of the litigation over the last 14 years has been 

about what has been in the lawsuit, and what has been out of the 

lawsuit. 

Many of the efforts in Congress, including the efforts that came 

out of the One Hundred and Ninth Congress, sought to finally resolve both the accounting claims and potential trust mismanagement claims altogether, because it was recognized, I think, by everyone, that bringing these matters to final resolution was a benefit to everyone, and that if we were left with the specter of years 

of litigation about mismanagement claims, we really would not 

have achieved very much. 

Under the settlement, the complaint will be amended to make 

clear that the trust administration claims are part of the case, and 

each and every Plaintiff in the class will receive a payment based 

on a formula, reviewed and approved by the Court. 

The payments, in addition to the thousand dollars for the historical accounting for that class, will start at $500, but will range up 

in some cases to hundreds of thousands of dollars for individual 

Native Americans. 

All told, between the accounting and the trust mismanagement 

claims, the Plaintiff class will be receiving approximately 

$1.4 billion. In contrast to what was intimated in the last panel, 

there is no reversion of that $1.4 billion to the government. 

That $1.4 billion will go to class members, to the extent that 

there may be unclaimed funds, there is a provision that allows that 

to go for scholarship funds. 

Finally, as Mr. Hayes said, there is a framework for addressing 

the problem of fractionated lands and a path forward so that we 

are not in this position again in five years, in 10 years, and 15 

years, and 50 years. 

We very much appreciate the opportunity to answer questions 

about the settlement, and we have tried to be as transparent as 

possible from the outset of this process. As soon as the settlement 

was reached in December of 2009, the Secretary, and Deputy Secretary, and the Solicitor of the Department of the Interior, held or 

how a call with tribal leaders across the Nation to inform them 

about the settlement. 

39 

The Department of the Interior and I have participated in hearings before the Senate Indian Affairs Committee, and sat before 

tribal leaders at the National Congress of American Indians, and 

answered all questions that were raised, and Federal representatives appeared before other tribal organizations. 

And I know that Ms. Cobell and her counsel have engaged in 

similar outreach. Going forward, when we talk about notice to class 

members, and the opportunity for even more outreach, what we 

have done to date is really only the beginning. 

Once the legislation passes, and the settlement is filed, formally 

filed with the Court for preliminary approval, that will trigger the 

notification provisions of Rule 23, and will result in a robust notice, 

and we include that individual letter sent to class members that 

will provide an explanation of the settlement. 

And then we envision significant outreach, including radio, television, and other means to ensure that there is a maximum 

amount of information to all class members so that they will have 

the opportunity to consider. 

And then they will be able to go before the Judge and object to 

the Judge, and consider opting out, and object to particular parts 

of the settlement, but through the ordinary process that occurs 

with class actions. 

So we think that there are going forward going to be enormous 

opportunities for class members to review and comment on the settlement. Thank you to the Committee for this hearing, and we look 

forward to answering your questions. 

[The prepared statement of Mr. Perrelli follows:] 

Statement of Thomas J. Perrelli, Associate Attorney General, 

U.S. Department of Justice 

Good morning and thank you to Chairman Rahall, Ranking Member Hastings, 

and the other members of the Committee. The litigation that is today known as 

Cobell v. Salazar has lasted thirteen years, and over those years it has been an important issue for this Committee, its members, and their constituents. 

That interest is well-placed, as Cobell v. Salazar is one of the largest class actions 

ever brought against the U.S. government. What began in 1996 has seen 7 full trials 

constituting 192 trial days; has resulted in scores of judicial decisions; has been up 

to the Court of Appeals ten times; and has been the subject of intense, and sometimes difficult, litigation. 

Thanks in large part to the direction and support that the members of this Committee have provided over the years, on December 7, Mrs. Cobell’s attorneys and 

the United States signed a settlement that would turn the page on that history. 

The settlement, which will require legislative and judicial approval to become effective, is fair to the plaintiffs, is responsible for the United States, and provides 

a path forward for the future. The settlement contains many of the key elements 

that Members of Congress have sought to address in prior efforts to resolve this 

matter. First, the settlement resolves the plaintiffs’ claims for an historical accounting. The resolution on this issue, like other aspects of the settlement, is important 

both for the past and the future. It is important for the past, because it will result 

in a $1,000 check being sent to each member of the class. And it is important for 

the future, because it brings the Government and each holder of an Individual 

Indian Money account into agreement on the balance of each account—something 

that has been contested since this litigation began. 

Second, the settlement resolves what have been called the ‘‘trust administration’’ 

claims. Such claims allege that over the years, the Government has mismanaged the 

hundreds of thousands of acres of land and millions of dollars—including proceeds 

from those lands—that it holds in trust for individual Native Americans. Although 

to date few such claims have been brought, allegations of trust mismanagement 

have remained a possible threat to rebuilding the long-term relationship between 

the Department of the Interior and Native Americans. There has always been conVerDate Nov 24 2008 15:23 Apr 28, 2010 Jkt 000000 PO 00000 Frm 00043 Fmt 6633 Sfmt 6621 L:\DOCS\55393.TXT Hresour1 PsN: KATHY
40 

cern that, even if the Cobell case settled, it would simply be followed by a slew of 

mismanagement cases that would continue the acrimony. Under the settlement, the 

plaintiffs will amend their complaint to add these claims, which will then be resolved. Each and every plaintiff in this class will receive a payment, in addition to 

the $1,000 check for the accounting claims, based on a formula to be approved by 

the Court. And the Department of the Interior will know that it has put those trust 

administration claims, too, behind it. 

Between the accounting claims and the trust administration claims, the plaintiff class will be receiving approximately $1.4 billion. 

Finally, the settlement provides a framework through which the Department of 

the Interior can address one of the principal factors that has led down this path. 

The trust system that the Government manages has become increasingly complex 

over the years, as lands that were jointly owned by a small handful of individuals 

many decades ago are now often owned by several times that number, as the individual owners have passed away and left those interests to be divided among their 

heirs. Much of this land, divided up among sometimes hundreds of owners, has severely limited economic potential. 

To address this problem of fractionated lands, the settlement contributes additional funds to a land consolidation program that provides critical benefits to every 

party. For individuals who own a fractional amount of land and wish to sell it, it 

will put money directly into their hands. The tribes that will ultimately own these 

newly consolidated interests will have productive assets that they can finally put 

to beneficial economic use. And over time, the Department of the Interior will reduce the hundreds of thousands of small accounts that it has been managing at a 

highly disproportionate cost. 

As I mentioned, this settlement is not final. It requires authorization from Congress and approval from the court. We hope that both will happen quickly. 

The legislation that is required to implement this settlement accomplishes a number of things. Among other things, it ensures that the United States District Court 

for the District of Columbia, which has been handling the litigation, can continue 

to assert jurisdiction over it after the plaintiffs amend their complaint. The legislation also sets up two funds within the Treasury of the United States, permits the 

court to certify a single class of trust administration claims, and—much like earlier 

efforts to resolve Cobell—authorizes the Secretary to administer the land consolidation program that is critical to the settlement. We believe that Congress should 

move forward with this legislation as quickly as possible. 

The settlement also requires approval from the court. Once legislation has passed, 

the parties will present their proposed settlement to the court, and will begin the 

process of explaining it to class members across the country. Those individuals and 

others will have an opportunity to review the settlement and express their views 

on it, and the court will ultimately decide whether it represents a fair resolution 

of the claims. We believe that this formal process of explaining the settlement to 

the class, which the court does not have authority to initiate until after legislation 

passes, will be an important opportunity to provide information and answer questions—and for the court to ensure that the settlement meets the legal requirements 

of fairness to the class. 

In the meantime, the parties are already engaged in extensive active outreach to 

explain the Settlement, both to the individual Indians who are the members of the 

plaintiff class in the litigation and to Indian tribes. Once the Settlement was 

reached in December 2009, the Secretary, Deputy Secretary, and Solicitor of the Department of the Interior held a call with tribal leaders across the nation to inform 

them of the Settlement and to answer their questions, followed by a widely-publicized hearing before the Senate Indian Affairs Committee. Representatives of the 

government also recently appeared before the National Congress of American 

Indians to answer questions and provide information on the Settlement. Similarly, 

federal representatives have appeared before other tribal organizations to provide 

information regarding the Settlement. Mrs. Cobell and the plaintiffs’ counsel are engaged in similar outreach. 

Throughout our discussions with the plaintiffs, we have been guided by two principles. First, we wanted true peace for the parties. We wanted to turn the page on 

history. The resolution of the accounting and trust administration pieces of this litigation will do that. And second, we wanted to put Interior on a new path for the 

future, and give it tools to address some of the underlying conditions that have contributed to its challenges. The land consolidation program will do that. 

This settlement is a successful resolution for Native Americans, and for all Americans, and I hope that it will receive swift approvals so we can bring the litigation 

fully to an end. We look forward to working with the Committee to move the necessary legislation forward, and I look forward to your questions. 

41 

The CHAIRMAN. Thank you both for your testimony. I would like 

to ask either one of you a question that I raised this morning in 

our Committee Chair meeting and discussing this hearing today, 

and the overall issue that we are addressing. 

And there was consternation raised among the appropriators, 

needless to say, because CBO has scored this settlement, and my 

question to either or both of you really would be can you help Congress identify funds that we can help pay for this settlement? 

Mr. HAYES. My understanding, Mr. Chairman, is that we are 

having discussions in the Administration on that point. This is an 

unusual case, in that the judgment fund is available for this purpose 

The CBO scoring is in—and I am not a budgeteer, I am happy 

to report, and so I don’t understand the vagueness of the scoring 

process. Normally when you have a judgment fund situation, you 

don’t have this issue arise, but I can assure you, Mr. Chairman, 

that we are having intense discussions with the White House and 

with OMB, and we will be happy to get back to you on that very 

shortly. 

The CHAIRMAN. That would be most helpful, David. Let me continue with you then, David, and ask you a question about the 

$2 billion fund that expires at the end of 10 years, with any remaining funds, of course, returning to the General Treasury. Is 

that correct? 

Mr. HAYES. Yes, Mr. Chairman. 

The CHAIRMAN. What is the rationale for not depositing any remaining funds into the education fund, which is also established by 

the proposed settlement agreement? 

Mr. HAYES. We anticipate, Mr. Chairman, that these funds will 

all be spent by buying back fractionated interests. It is our intent 

actually working close with once we get approval here, working 

closely with the tribes, and prioritizing the efforts to accelerate 

those buy backs. 

We would like to have them—most of them occur in the early 

years. We don’t see this program going out 10 years at all. The 

$2 billion, we think, is roughly sized to potentially buy back most 

of the parcels that have 20 or more owners. 

But when you get into a fractionated land tracts that have anywhere from 5 to 20, all of a sudden, you are getting into the likely 

costs of that buy back being well in excess of $2 billion. So what 

we see is this is going to make a huge dent in the problem, but 

it is not going to resolve the problem. 

The CHAIRMAN. Could you please explain why you think a formula with an opt out clause is more appropriate than an administration option with the resolution of the trust administration 

claims? 

Mr. HAYES. Let me defer to the lawyer here on that one if you 

don’t mind, Mr. Chairman. 

The CHAIRMAN. Sure. 

Mr. PERRELLI. There was discussion earlier about a streamline 

process for claimants, and I think we view the class action mechanism as the streamline process to give individual Native Americans 

funds recovery for potential trust administration claims. 

42 

The opt out would put them in the exact same place that they 

would be otherwise today with respect to those claims, claims that 

to date that very few have been brought. I knew that there was a 

question earlier about prior examples. There are very few examples 

of these kinds of claims being brought. 

So we think that this mechanism through the settlement that we 

have created is that streamline means to offer some measure of 

compensation to individuals. Otherwise, they can choose to go to 

court as they can today. 

The CHAIRMAN. Thank you. Mr. Hastings. 

Mr. HASTINGS. Thank you, Mr. Chairman. You heard the testimony of the prior panel, and several Members, including me, at 

least raised the issue of attorneys’ fees. My question to you is that 

we could not find it on the website, the settlement, or the documents of that, and you responded that there was an agreement. 

We haven’t seen it, and so would you provide that to us, the documents specifically regarding the settlement as to attorney fees, 

and how those were derived? 

Mr. PERRELLI. Yes, we will, and just for the record, it indicates 

that the parties will litigate between $50- and $99.9 million for 

past attorneys’ fees, and we are happy to provide the documents. 

Mr. HASTINGS. OK. Good. How soon can we expect that? 

Mr. PERRELLI. We can get it to you today. 

Mr. HASTINGS. OK. That would be fine. The next question I have 

is that you heard again the prior panel, and the prior panel was 

suggesting that this is a big step forward. 

But there just needs to be more transparency and understanding 

of what this settlement agreement means to everybody. Mr. Grijalva asked a question, I think, to Mr. Nunez, is the issue transparency or unanimity, and I think the response was both. 

You are suggesting, OK, let us pass this, and then we will have 

outreach. How do you reconcile the differences of opinion on that? 

Mr. HAYES. I think, Congressman, that is not quite the dichotomy. We are engaged in outreach, and we will engage in more outreach. I should say that at the Department of the Interior that we 

have received enormous positive feedback about this settlement 

from Indian Country. 

No doubt there are some folks—and you had a couple here on the 

panel who are not happy with the settlement, or who question it. 

I firmly believe that you will not have unanimity on anything like 

this. 

We believe that there is enormous interest in Indian Country in 

resolving this, and enormous credibility with the Plaintiff class representatives. Elouise Cobell and her representatives, and their attorneys, have enormous credibility in Indian Country, because they 

know how hard they have worked in this matter for the last 13 

years. 

I hope and think that we are fresh blood, in terms of the Department of the Interior. We have not been involved in the past, and 

we have come at this from a fresh look, and I think we have some 

credibility. 

We will continue to work, and I think your hearing here has 

been very helpful, and thank you for holding it, in terms of conVerDate Nov 24 2008 15:23 Apr 28, 2010 Jkt 000000 PO 00000 Frm 00046 Fmt 6633 Sfmt 6602 L:\DOCS\55393.TXT Hresour1 PsN: KATHY
43 

tinuing to provide an opportunity for us to explain some of this, 

and we will. 

And we will be happy to do more outreach. I think the point that 

Tom just mentioned is important though. There is a judicial process here. The Judge has to approve—has a fairness hearing basically, that will resolve a number of these questions. 

And then once if he says this is a fair and appropriate settlement 

from a judicial perspective, then the class action notice processes 

start, and we are very anxious to use every mechanism available 

to make sure that everyone in Indian Country who wants to understand this fully, fully understands their rights, their opportunities, 

to opt out, to opt in, whatever. 

But we can’t accelerate that until we continue through this process and then we have the Judge approve the settlement in the fairness hearing. 

Mr. PERRELLI. And if I can just clarify. What we will happen is 

that once legislation is enacted, and the settlement goes before the 

Judge, he will preliminarily approve, which will then trigger all of 

the notice to individual class members, and all of the outreach that 

is contemplated by the agreement. 

People will have the opportunity to file objections, raise concerns, 

and then we anticipate a significant fairness hearing some months 

down the road in front of him. 

Mr. HASTINGS. Well, all of that is after the fact, and Congress 

has the responsibility first. Now, I think that is self-evident, although we have not seen any legislation. So we don’t know exactly 

what—I am presuming that it is the settlement agreement. 

But my point is simply is that this hearing was designed to bring 

out differing views, and different observations on this settlement 

agreement. I think everything that I have heard is that this is a 

very, very big step forward. 

It needs to be addressed, but it needs to be understood, and I 

think the testimony was pretty clear that Indian Country in general wants to know more about it before this legislation is passed, 

and our responsibility as Members of Congress obviously is to listen to the different views of our constituents, because we represent 

you people. 

I concede that you did a lot of work working on this. I am not 

arguing with that at all, but there is—and there certainly seems 

to be a little different approach, and that is why I was asking, but 

what I am unfortunately hearing is, well, let us pass this and we 

will take that next step. 

And so I hope that I didn’t quite hear it that way, but if your 

outreach is aggressive, I am certain that we will hear from Indian 

Country in general that this process has moved forward. 

Mr. HAYES. And thank you, Congressman, for those comments, 

and I appreciate the chance to clarify once again. The day of the 

settlement, we were on a conference call with scores of tribal leaders around the country explaining the settlement. 

We have tribes visiting our Department as you well know as they 

visit your offices on The Hill week in and week out. We have been 

doing extensive discussions with many, many tribes. 

Just last week, both Hilary Tompkins and Tom Perrelli spent a 

couple of hours in front of a panel with the National Congress on 

44 

American Indians, responding to all comers, all questions, about 

this settlement. 

There are important meetings next week that have already been 

alluded to. We will continue to do that. We appreciate the fact that 

it is very important now to answer these questions, and we thank 

you for this opportunity to hear the issues that we heard today, 

and to respond to them, and to have the opportunity for a dialogue 

with this important Committee on the subject. 

Mr. HASTINGS. OK. I would just conclude that I appreciate that, 

and I encourage you to continue your outreach. I suspect since we 

have the responsibility here to pass this legislation, that we will 

hear back from Indian Country as to the success of that outreach, 

and I think that is probably a fair way to do it. Thank you. 

Mr. FALEOMAVAEGA. [Presiding]. Thank you for your testimonies, 

Secretary Hayes, and also our Deputy Attorney General, and Ms. 

Tompkins. Welcome. It is a real pleasure and certainly I am sure 

that throughout Indian Country the tremendous pride that we finally appointed out first Solicitor General who is of Native American ancestry. 

I believe that you are a member of the Navajo Nation? 

Ms. TOMPKINS. Yes. A proud member of the Navajo Nation, yes. 

Mr. FALEOMAVAEGA. 250 thousand strong. That is pretty good. 

Secretary Hayes, you mentioned in your testimony that you had a 

copy of a draft bill that the Administration is proposing? Did I read 

that correctly in your testimony? 

Has the Administration developed a proposed bill relating to this 

issue of this settlement? 

Mr. HAYES. Yes, the Administration has, and the President sent 

it up to the leadership a week or two ago. 

Mr. FALEOMAVAEGA. So we have it here among the Members? 

Mr. HAYES. As far as I know. 

Mr. FALEOMAVAEGA. I think Mr. Hastings says that he has not 

received a copy. Certainly I have not received a copy. 

Mr. HAYES. Well, we will resolve that, Congressman Hastings. 

We will get it to you. 

Mr. FALEOMAVAEGA. Yes, I think that would be a tremendous 

help. How many were involved in these negotiations? And I can understand that you must have gone through some grueling days, and 

weeks, and months, in finally reaching a settlement in December. 

But I am just curious. How many were involved in these negotiations? Was it just between Ms. Cobell and her attorneys, and the 

officials of the Department of the Interior? 

Mr. PERRELLI. There were Ms. Cobell, and her attorneys, and 

there were attorneys, consultants, as well as maybe up to 10 or 11 

folks from the Departments of the Interior and the Department of 

Justice. We filled a big conference table, or two, and more. 

Mr. FALEOMAVAEGA. So primarily it was just Ms. Cobell and her 

attorneys, Plaintiffs attorneys, and officials from both the Department of Justice and the Department of the Interior; is that correct? 

Mr. PERRELLI. That is correct. 

Mr. FALEOMAVAEGA. OK. 

Mr. HAYES. And, of course, their attorneys represent the class. 

They have been certified. The class has been certified. So that they 

45 

are the appropriate and official representative of the hundreds of 

thousands of individual Indians who hold accounts. 

So we thought it appropriate since we have been negotiating 

with them since they brought the litigation as a class. 

Mr. FALEOMAVAEGA. How did you arrive at the $3.4 billion as 

the price settlement for this class action suit? I believe it is 

$1.4 billion for the class members, and was it $2-some-billion for 

another portion of this? How did you arrive at this figure? 

Mr. PERRELLI. And I will let Mr. Hayes talk about the $2 billion. 

Mr. FALEOMAVAEGA. The reason why I raise this issue is that 

this is one of the most contentious issues. Over the years, as I can 

remember, not only was there tremendous disagreements among 

the members or in the Congress, both House, and even within the 

Administration. 

In fact, we even I think appropriated over $10 million through 

an auditing company or a firm to find out exactly what was involved in the accounting, and even they could not come out with 

it after spending over $10 million to provide some kind of an accounting. But I am just curious. How did you arrive at this? 

Mr. PERRELLI. With respect to the $1.4 billion, it was in negotiations, and so certainly a negotiated amount. As we looked at it, we 

looked at quantifications of the case made over time. 

The Court had previously suggested a number, approximately 

450 million for the accounting portion of the case. The Plaintiffs at 

different times had argued for significantly more money. 

We also looked and made our best estimate to look at the entire 

range of accounts and potential mismanagement claims. We had 

the benefit of looking at settlements in the tribal trust area, which 

gave us some information about the potential size of these claims, 

and we did our best to come up with a reasonable settlement 

amount, but it was certainly a negotiation. 

Mr. FALEOMAVAEGA. Well, what happened through all these 

years with the—well, in terms of—well, you are supposed to have 

some kind of a computer type accounting system. That was not 

done properly, I suppose. 

But I am just curious. In terms of the numbers, this is what was 

agreed upon? Because it seems to be a lot higher that in my humble opinion over the years on the numbers that were being thrown 

around. But $3.5 billion is somewhat a little low in my opinion. 

Secretary Hayes. 

Mr. HAYES. Yes, if I can just make a couple of observations. 

Mr. FALEOMAVAEGA. Please. 

Mr. HAYES. I think that through the years of this litigation that 

this Congress has supported extensive work in terms of accounting 

work at the Department of the Interior through the Office of the 

Special Trustee, and the Office of Historical Accounting, that has 

provided enormous information, and provided the basis for good 

discussion about the status of these accounts. 

So it is not as though these years of litigation have been for 

naught. There has been much more information developed over the 

years. I think that has been very helpful. 

I will say that this was a very tough negotiation. The same 

Plaintiffs’ lawyers who have been appropriately aggressive from 

day one, were appropriately aggressive in our negotiations. 

46 

And I am somewhat offended by the suggestion that there was 

some collusion here between the United States and the Plaintiffs, 

particularly when to your point the settlement amount is significantly less frankly than this Congress has had before it, and that 

prior Administrations have looked at for settlements. 

I view that as a sign of good, hard and appropriate negotiating 

on both sides, and I think the settlement is fair and the Plaintiffs 

do as well, but I encourage you to ask the same question of the 

Plaintiffs’ counsel. 

Mr. FALEOMAVAEGA. I just have one more question to Ms. Tompkins. As you have heard previously from Professor Monette, in 

terms of the legal process, and whatever the legal justifications, 

does this mean that once this settlement is done with, with Congressional legislation to put the seal on it, that there could be no 

more class action suits concerning this matter. 

Ms. TOMPKINS. If this settlement is approved by Congress, and 

ultimately by the Court, it will resolve the claims that are released 

in this settlement agreement. So it will resolve past claims for historical accounting, past claims for mismanagement of funds and assets. 

So those will be resolved, but moving forward, potential new 

claims could arise in the future, and that will always be the case. 

So, those types of future claims would not be affected by this settlement agreement. 

Mr. FALEOMAVAEGA. My time is up. The gentlelady from Wyoming. 

Mrs. LUMMIS. Thank you, Mr. Chairman, and I would just comment that I had a law school professor named Joel Selig, who was 

Department of Justice, Jimmy Carter era, trained, and was an expert in class action lawsuits. 

No University of Wyoming Law School graduate should have as 

much class action lawsuit experience as we did, but it was all because of Joel Selig. So I highly recommend his particular expertise 

in implementing Rule 23 litigation, and I want to ask a couple of 

questions. 

Deputy Secretary Hayes, could you describe a little bit more 

what arm’s-length interaction your Department had with those 

folks whose claims will be extinguished? 

Mr. HAYES. Well, our negotiations were with the class representatives, and with their lawyers. They started last summer, early in 

the summer, and we had intense discussions throughout the summer and into the fall, leading to this settlement. 

Now, I welcome you to ask the next panel, and Elouise Cobell, 

in terms of how they communicated with the class. As you well 

know from your training at the University of Wyoming Law School, 

one of the advantages of a class action is that a court has sanctioned a class, and class representatives, and counsel for the class, 

to speak on behalf of the class and, of course, they have done that 

eloquently for the last 13 years, and those are the folks that we 

dealt with. 

Mrs. LUMMIS. I would like to follow up. You stated that the settlement addresses all existing and potential trust related claims 

that the Plaintiffs may have against the United States to date. 

47 

What kinds of yet to be litigated claims are being settled, and 

will it be clearer to Plaintiffs in accepting the settlement that they 

are extinguishing yet to be litigated claims? 

Mr. HAYES. Well, I appreciate you raising that. That may be a 

misstatement in my testimony. I mean, we are not resolving claims 

for future—that start tomorrow, or the day after the settlement. 

Mrs. LUMMIS. OK. 

Mr. HAYES. In fact, that is why the Secretary has entered an 

order that would become effective at the time of settlement at the 

request of the Plaintiffs. So that we make sure that going forward 

that we learn the lessons that we have learned over the last 13 

years, and take a fresh look, and make sure that we don’t make 

these mistakes again. 

And that is also why we are excited about the land consolidation 

program, because it will minimize both the expense of these individual actions, but also the opportunities for mistake, and at the 

same time, it puts money in the pocket of individual Indians. 

Mrs. LUMMIS. OK. Good to know. Thank you very much. In visiting with the tribes in Wyoming, they gave me two primary messages. One was that there is an absolute need to settle this matter, 

and I am so pleased that this hearing is being held, because some 

settlement proposal has come to fruition. 

And also that many individuals throughout Indian Country have 

questions about the terms and the precedence setting impacts of 

this. What kinds of steps does the Department plan to take to educate tribal members on the full scope of the settlement? 

Mr. HAYES. Congresswoman, we described a little bit before what 

we have done to date, in terms of our initial outreach to the tribes 

as a group with the Secretary, and with the outreach through the 

National Congress on American Indians, and through our individual tribal outreach. 

We had a Senate hearing before the turn of the year, and we 

have this hearing. But I take seriously the points of Congressman 

Hastings, and others here. We will redouble our efforts right now 

to make sure that there is good information out there about this 

settlement. 

This hearing has demonstrated that there is confusion in some 

quarters, and some misinformation, and that does no one any good. 

We are confident that this is an excellent settlement, and we will 

make ourselves available, and aggressively put ourselves out there 

to communicate that as forcefully and as frequently as we can. 

Mrs. LUMMIS. Thank you, and would the Chairman indulge one 

more question, Mr. Chairman? 

Mr. FALEOMAVAEGA. Sure. Go ahead. 

Mrs. LUMMIS. Thank you. Mr. Perrelli, one specific question that 

was asked by a tribal leader in my State was whether or not individual payments under the settlement would be taxable. 

And also whether it would affect formulas for other Federal payments, such as TANF? Can you respond to that? 

Mr. PERRELLI. And I think the settlement itself doesn’t change 

the rules that would otherwise apply to those payments. So I think 

that there are—and I will get myself out of my depth quickly if I 

get too far into tax issues, and this may be the kind of thing that 

48 

a written follow-up to you may be helpful in talking about the general rules that would apply. 

Mrs. LUMMIS. That would be great, and the tribes in Wyoming 

would really appreciate it, and I will be sure to pass it on. Thank 

you, Mr. Chairman. 

Mr. FALEOMAVAEGA. The gentleman from New Mexico. 

Mr. HEINRICH. Thank you, Mr. Chairman. First, welcome to all 

of you. I had an opportunity to work with Solicitor Tompkins when 

we were both working for the State of New Mexico, and have nothing but high regard for her legal mind. 

And I want to sort of direct my first question to both Mr. Hayes 

and Mr. Perrelli. From the point of view of your two agencies—and 

I don’t want to sidetrack us too much, but I want to ask about the 

tribal trust lawsuits that are also currently pending in the Federal 

Courts. 

And they are based on many of the same problems that are 

inherent in the Cobell case. These are with tribes as plaintiffs rather than individuals, and I just want to ask from both of you what 

are you and your agencies doing to make sure that those cases are 

also receiving the same sort of high level of attention and potential 

for resolve that this case has seen? 

Mr. HAYES. I thank you for your question, Congressman, and this 

is a very important point. There are nearly a hundred lawsuits 

that individual tribes have brought in terms of management of 

their tribal trust assets. 

A few have settled. We have been in discussions with the Justice 

Department about how—pivoting off of this settlement with a class 

of individual Indian account holders—we can get many, many more 

of those tribal cases into a settlement mode. 

That will be our sole attention once we resolve this matter. We 

are looking at budgeting adequate amounts of budget, and working 

with the Congress to ensure that we have the support needed to 

do the fact finding, et cetera, that will enable these tribal cases to 

be settled. 

And we have had some preliminary discussions with the Justice 

Department about some process thoughts to help facilitate a fast 

tracking of the settlement process, and I defer to Mr. Perrelli for 

supplementing that. 

Mr. PERRELLI. I have two things. I will first clarify what I just 

said, because the settlement does not deal with the tax issues. The 

legislation that we proposed does deal with the tax and benefit 

issues. 

I am sorry that the Congressman had to leave before I could clarify that, but when we send up a copy of the legislation, there is a 

specific provision on the tax and benefits implication that I think 

will be helpful to tribal leaders to understand that. 

With respect to the tribal trust cases, they are really the next 

step in this path in trying to bring resolution to all of these claims. 

The Solicitor and I recently sent a letter to some of the leaders of 

the groups that are representing significant numbers of the tribes, 

and inviting them to a settlement negotiation in which we would 

participate personally. 

49 

And we envision having that schedule in short order, and hopefully beginning a process that will allow us to move forward in 

those cases as we have here. 

Mr. HEINRICH. I appreciate both of your responses on that. I 

know that there are at least five cases in New Mexico, with the 

Arapaho Nation, the Hickory, and Mescalero and Apache Tribes, 

and the Pueblos of Zia and Laguna that are all involved in related 

litigation. 

The last thing that I would just do is for Ms. Tompkins. I wanted 

to give you the opportunity if you wanted to address the matter 

that Professor Monette brought up at the beginning, where he 

seemed to characterize your view on an issue, and I wanted to give 

you an opportunity to characterize your own view on that. 

Ms. TOMPKINS. Thank you, Congressman Heinrich. Sure. I guess 

my only comment on that was the question that we discussed last 

night was really—it just reminded me of law school and one of 

those convoluted, arcane questions that you would get when a professor was throwing you with easing the Socratic method. 

But I did look at the issue, and it is not an issue that raises any 

concern in the settlement agreement. It is about some very technical language in the definition part of the settlement. 

But it is not a problem. It basically includes the words lands and 

assets in the accounting definition, because that is an outgrowth of 

the litigation. There was a time in the litigation when the parties 

were debating whether or not asset statements, descriptions of the 

land, the underlying land, should be in the accounting statements. 

And so that is just to ensure that we are addressing that issue in 

that definition. Thank you. 

Mr. HEINRICH. Thank you, and Mr. Chairman, I yield back the 

rest of my time. 

Mr. FALEOMAVAEGA. Thank you. I would like to turn the time 

over to our Ranking Member for further questions. 

Mr. HASTINGS. Thank you very much, Mr. Chairman. I don’t 

have any other questions, but it is more of a request, because you 

said, and properly so, that this hearing has been very good. 

Generally, hearings engender more questions in the future. Surprise. Surprise. You were very kind to me in responding to the 

questions in a two week time period on the letter that I sent you. 

What I would ask you is that questions that are given to you 

after this meeting, if you would respond in a like time, a two week 

period, because there was a very tight time period on that, and as 

quickly that we can get these questions—our answers back for 

these questions, that would be helpful. 

So if you could set a goal of responding to whatever followup 

questions, that that response would be within a two week period. 

Mr. HAYES. Absolutely, Congressman. 

Mr. HASTINGS. Great. Great. Thank you very much. Thank you, 

Mr. Chairman. 

Mr. FALEOMAVAEGA. Well, I have just one followup question to 

the question from the gentleman from New Mexico. I just wanted 

to get it straight and for the record that there are tribes who have 

already filed lawsuits in the same case matter that we are talking 

about. 

50 

Are you suggesting that we are going to do something to disallow 

them from pursuing their efforts in filing a lawsuit in that same 

case matter? 

Mr. PERRELLI. No, not at all. Not at all, Congressman, and I 

apologize for any confusion in that regard. There are approximately 

99 current lawsuits filed by tribes that are not affected by this settlement, and this settlement doesn’t preclude tribes and tribal governments from filing any action. 

Mr. FALEOMAVAEGA. All right. Well, thank you very much. I believe we have one more panel here, our third one, and this is Ms. 

Elouise Cobell, and I believe she probably has a couple of attorneys 

that will be attending here. We would welcome her to testify now, 

and for the record, please introduce the attorney that is here with 

you. 

STATEMENT OF ELOUISE C. COBELL, LEAD PLAINTIFF IN 

COBELL V. SALAZAR, BROWNING, MONTANA; ACCOMPANIED 

BY MR. WILLIAM E. DORRIS, MANAGING PARTNER, 

KILPATRICK STOCKTON LLP, WASHINGTON, D.C. 

Ms. COBELL. Yes, I will, and with me today is Bill Dorris, one 

of the Plaintiffs’ attorneys, and he will be joining me for any comments or questions, and I think it is very important to tell this 

Committee that I didn’t bring this case on behalf of tribes. 

I brought this case on behalf of over 500 thousand individual 

Indians, and many who I know, and many who have suffered from 

the mismanagement of the Indian trust funds, and it is the largest 

class action lawsuit. 

I was a little taken back by the word transparency. This has 

been going on for 14 years, and we have posted constantly, and 

newspapers have covered it, and over, and over about what has 

happened in this court case. 

And I think that there is much more consensus, as Secretary 

Hayes has stated, in individual Indians knowing about this case. 

I flew in late last night from South Dakota, where I have been visiting and swiping my own personal credit card, but visiting tribes 

and individual Indians at tribal locations. 

And I was overjoyed because sometimes you feel that there are 

a lot of Monday night quarterbacks, and you are right down to the 

bottom, and getting ready to make a touchdown, and then everybody starts yelling and screaming that you did this wrong, and you 

did that wrong. 

Well, it was overwhelming to me to get out to Indian Country 

and to individual Indians, and not that I haven’t been out to Indian 

Country before, because I have traveled extensive in Indian Country updating individual Indians on this case. 

But I was extremely rewarded by just looking at the people that 

we represented, and the thank you’s, and the appreciation that was 

extended by elderly people, young people. 

And I think where the real confusion really existed was with the 

tribes. The tribal council members would get up and talk about, oh, 

you are going to extinguish your rights in the Black Hills, and it 

was constantly correcting misinformation that existed out there. 

That was one of the reasons that I actually started going out to 

Indian Country immediately before Congress approved this settleVerDate Nov 24 2008 15:23 Apr 28, 2010 Jkt 000000 PO 00000 Frm 00054 Fmt 6633 Sfmt 6602 L:\DOCS\55393.TXT Hresour1 PsN: KATHY
51 

ment because of the misinformation, and it was important for individual Indians to hear the facts, and as they learned the facts, you 

cannot believe the amount of like personal notes that were written. 

And, yes, we want to move forward. We feel that this is a stepping stone. We understand that this is not the end all to all the 

problems that exist in Indian Country. This is something that has 

been accomplished, and we feel good about this victory. We feel 

very good about this victory. 

I was very impressed by a young man in Pine Ridge, who got up 

and who had been reading since a young man at the beginning of 

this case, and informed all his family members constantly about 

what this case meant, and what it meant for all individual Indians. 

Very bright, and it just overwhelmingly gave me the satisfaction 

of the young people that have been affected by this case, and that, 

yes, they do have rights, and they do have a voice. 

And that a lot of times what I heard over the last couple of days 

is that tribal councils do not represent them, and they wanted me 

to make sure that I understood that, because sometimes they felt 

that they couldn’t trust tribal councils. 

So they wanted me to understand that, and they told me over 

and over, and as we continued to travel South Dakota, and were 

visiting every single reservation in South Dakota, it has been overwhelming. 

There is almost no opposition to this settlement as far as individual Indians. I think where we really ran into problems is just 

the total misinformation, and that is why we were out there. 

I just would like to say that I was deeply hurt by the collusion 

that the Professor alleged, and I want to tell you that these negotiations were tough. They were hard, and I think that I did the 

best job that I could, along with my class counsel, to negotiate a 

settlement. 

I felt that we were owed much more money, but this could go on 

for hundreds of years, and people are dying. Individual Indians 

that are owed this money are dying every single day, and we had 

to reach a time that we put the past before us, and get some money 

out to individual Indians that are owed. 

And so the driving force—and I really would like to thank Attorney General Tom Perrelli, and Deputy Secretary Hayes, and Solicitor Hilary Tompkins, because at times I wanted to walk out of the 

meetings. I said, no, that we are not accepting this. 

And once of the issues that I thought was very, very important 

is for the future. What about the future of our young people, and 

worked very hard for a scholarship fund, and that it be dedicated 

to educating our young people so that we never have to go through 

this again. 

We should never have to go through this abuse that the U.S. 

Government has done to individual Indians, and I just don’t want 

that to happen, and I want every individual young person to be 

educated so we don’t have to. 

You don’t know when I was walking over, and you don’t know 

how many times I have testified before the Senate Committee, this 

Committee. It has been numerous. I started with Mike Synar, who 

the Chairman recognized, and he was totally incredible. 

52 

He was a person that started it, but probably 20 some times— 

and sometimes it just gets so tiring, because you come back again, 

and it is the same thing, and tribes say more consultation, and 

more of this, and more of that. 

Well, for 14 years, I sat in that courtroom and there was not too 

many tribal people that sat there. But we always had great input. 

My tribe was always behind this. They sent letters that said that 

we are behind this 100 percent. 

So I really wanted to address the situation on the outreach, because this outreach has been going on. You know, should we have 

gotten more than $3.4 billion? I would have liked to have gotten 

more than $3.4 billion. 

Like the Chairman, I wanted $280 billion at one point in time, 

but what is reasonable. What is reasonable during this time before 

so many people pass away and die, and die of poverty. 

I just came from Pine Ridge. I just came from Rose Bud, and 

things are tough. Things are tough in those situations. You can’t 

believe the roads that I traveled. They don’t even have paved 

roads. 

So I just want to continue to address that. The other thing that 

I did on my own just trying to get information out because of the 

misinformation. You know, oh, the treaties are being violated. Oh, 

this is going to happen. Oh, there are going to be no future claims. 

So I just began issuing Ask Elouise letters. Why don’t you ask 

us. We know. Don’t go to your tribal chairmen that have already 

said they don’t know anything about it. Ask us. 

So I started submitting, and this is the fourth Ask Elouise letter, 

and what we do is we collect questions from all the IAM account 

holders, and they give us questions, and we address them, constantly address them. 

And so it is a good way of getting out and really working with 

people. I guess I want to talk a little bit about the fifteen-hundred 

dollars, and the accounting portion you all know sitting up here, 

and everybody has talked about it. 

You have allocated hundreds of millions of dollars for an accounting, and there just can’t be an accounting. There are too many 

missing documents. The documents are gone. So you can’t do an accounting. So we had to settle on that. 

And we were asking for $48 billion. The Court came back and 

said, no, I think I will give you $455 million, and then the Appellate Court said, well, go back to District Court, and said, oh, the 

government can do any type of an accounting that they want. 

They can do an accounting for the low hanging fruit and for accounts that have a hundred-thousand or more in them. So it wasn’t 

a legal accounting, and you can take as long as you want. So we 

could have been looking at another hundred years for an accounting. 

And so those are the reasons that we settled, and those are the 

reasons that we fought on the table with the Department of Justice 

and the Department of the Interior to making sure that we got the 

best settlement. 

It was very important to us to have people understand that this 

would not be taxable. Many of the people that are going to be receiving this money are poor. They are poor. Entitlement programs 

53 

are very important to them, and the majority of people are on SSI, 

on TANF, on food stamps, and we wanted to ensure that those 

were not disrupted. 

And so in this settlement agreement, we will not be held victims 

to having those go away. I guess maybe the other areas that I 

wanted to talk about is the trust mismanagement claims. 

The government wanted that. The government wanted it, and we 

sat and talked about them. We actually did a study of how many 

claims had been filed on land mismanagement by individual 

Indians. There wasn’t that many. 

And the reason there isn’t that many is because people don’t 

have the money to sue, and that is why I sued the government on 

behalf of the 500 thousand individual Indians, and not one tribe 

gave one penny for this litigation. Let me ensure that item to you. 

I went out and raised money so that we could have justice, and 

so I know how difficult it is, and so I know that individuals that 

want to resolve these trust mismanagement claims that they have 

the option to. They can opt out. 

And I think that has been discussed several times over and over 

that there is going to be a fairness hearing. Everybody that doesn’t 

like what is happening, then go to the fairness hearing. Be heard, 

and the Judge will determine. 

The Judge played an active role in this. When he called the parties together, he said that you can litigate forever. I don’t see any 

judicial solution, because he knew that we had been in court for 14 

years, and we could be in court for another 20 years. 

And we don’t want to go to the Supreme Court. I mean, that option is open for us, and many of you asked why is there a sense 

of urgency. There is a sense of urgency because we have timelines, 

and I know Bill Dorris will discuss that with you, where we lose 

out on our option to go to the Supreme Court, but that is our next 

option, is to go to the Supreme Court. 

You can do the right thing here. You can act and act quickly, and 

get this approved so that we can get money to individual Indians 

that have been abused for so many years. Let us move on. Let us 

get this behind us, and let us move on, and I urge this Congress 

to take me seriously. 

It has been difficult. It has been a difficult 14 years, and I 

thought that the hard part was over when we had a legal settlement between the Plaintiffs and the Defendants. 

I thought that all we had to do was come up and talk to Congress, because they had so many hearings that they knew about 

this, and it is almost like Congress sometimes acts oblivious to all 

the issues that we have talked about, and I am not criticizing, because I need your support to approve this. 

[Laughter.] 

Ms. COBELL. But I would like to stop there, and just take any 

questions. 

[The prepared statement of Ms. Cobell follows:] 

Statement of Elouise P. Cobell, Lead Plaintiff in Cobell V. Salazar 

I. INTRODUCTION 

Good afternoon, and thank you Chairman Rahall, Ranking Member Hastings, and 

members of the Committee. I am here today representing a class of over 500,000 

individual Indians as the lead plaintiff in the case initially entitled Cobell v. Babbitt 

54 

and now referred to as Cobell v. Salazar, pending in the United States District 

Court for the District of Columbia and presently presided over by Judge James Robertson. Since virtually its inception more than 13 years ago, Congress has taken 

keen interest in this litigation and its key objectives—reforming the Individual 

Indian Trust (‘‘Trust’’), ensuring that the government accounts for all Trust assets 

including all trust funds, land and natural resources, and correcting and restating 

each individual’s account balance. 

By any measure, this litigation has proven exceptional and extraordinary. Not 

only is it one of the largest class actions ever brought against the United States as 

it addresses over 120 years of mismanagement of Indian trust assets and involves 

over 500,000 individual Indians, but the litigation has been intense and contentious. 

Moreover, there have been more than 3600 docket entries in the district court and 

over 80 published decisions, including ten appeals—the most recent appellate opinion is referred to as Cobell XXII. 

On each occasion I have appeared before Congress, I have emphasized my willingness to explore settlement of this case. But of course, resolution takes two parties 

willing to come to the table to negotiate in good faith and attempt to reach an equitable settlement that would set the foundation for improved trust management and 

accountability in the future. Until very recently, however, we did not have such a 

willing partner on the other side. President Obama showed great leadership during 

the campaign when he committed to seek a fair resolution to this case and, when 

elected, he followed through and charged Secretary Salazar and Attorney General 

Holder with carrying out this commitment. 

Having been through seven failed settlement efforts before, I was not optimistic 

at the outset of these negotiations that we would be able to reach agreement. Beginning in the late summer of 2009, though, we sat down in good faith and so did the 

Administration. Associate Attorney General Tom Perrelli, Interior Deputy Secretary 

David Hayes, and Interior Solicitor Hillary Tompkins were involved in the day-today negotiations. The issues to discuss and resolve were gravely challenging, and 

I repeatedly felt we had reached impasse. But both my team and the government 

soldiered on, knowing that resolution was the best thing for the affected individual 

Indian trust beneficiaries and for a healthier foundation of the trust relationship for 

the future. 

Reaching agreement was certainly not easy, and the settlement from my perspective is not perfect. I would want more for beneficiaries as I think that is what they 

deserve. But a settlement requires compromise—by definition, you do not get everything you want. This is the bottom line: After months of discussion, I am here to 

testify that I strongly support this agreement. It is time to look forward, not backward. And though we must never forget the past, this settlement can move us forward together as it represents the best resolution we can hope for under the circumstances. 

Although we have reached an historical settlement totaling more than 

$3.4 billion, there is little doubt this is far less than the full amount to which individual Indians are entitled. Yes, we could prolong our struggle, fight longer, and, 

perhaps one day, reach a judgment in the courts that results in a greater benefit 

to individual Indians. But we are nevertheless compelled to settle now by the sobering reality that members of our class die each year, each month, and every day, forever prevented from receiving that which is theirs. We also face the uncomfortable, 

but unavoidable fact that a large number of individual Indian trust beneficiaries are 

among the most vulnerable people in this country, existing in the direst of poverty. 

This settlement can begin to provide hope and a much needed measure of justice. 

In addition, now that the Cobell case has brought heightened attention to this 

matter, I am optimistic that this settlement will lay the foundation for genuine and 

meaningful reform of the Trust. There remains considerable room for improvement, 

as Secretary Salazar and Deputy Secretary Hayes have recognized. I am hopeful 

that the Commission that Secretary Salazar has contemporaneously announced with 

this settlement will ensure that additional critical reforms are made and that we 

set the underpinning for safe and sound management of our assets in the future. 

The terms of the settlement have been well publicized. We have reached out to 

Indian Country to insure that beneficiaries are well informed of its terms. I just returned from meeting with beneficiaries in South Dakota, and our class counsel, as 

we speak, is traveling to meet with beneficiaries in other states. We have met with 

allottee associations, tribal organizations and landowners and will continue our efforts. Next week, our class counsel will visit Arizona and New Mexico, the following 

week Montana, Wyoming and North Dakota and the weeks after that Oklahoma, 

Washington, California and Oregon. Further meetings with beneficiaries will continue throughout Indian Country in March and April to make sure that they are 

able to receive complete and accurate information about the settlement. 

55 

Despite this outreach, there remains misinformation regarding the settlement 

conveyed by a very small number of individuals, many of whom are not beneficiaries 

and do not speak for individual Indian beneficiaries. I want to dispel those misunderstandings: 

First, there are those who have stated that under this agreement beneficiaries 

will receive very little. This is not accurate. In fact, most beneficiaries who participate in this settlement will receive at least—and I emphasize at least—$1,500.00. 

Many will receive substantially more based on the transactional activity in their 

IIM account. To those in Indian Country, receipt of this money is critical, both as 

a recognition of the government’s past wrongdoing and as a first step in fulfilling 

the commitment to reforming the trust system. Many individual Indians are dependent on this money for the basic necessities of life. Its payment should not be 

further delayed. 

Two other points are important with respect to these distributions. First, receipt 

of these funds shall not be construed as income and thus will not be taxable for 

beneficiaries. This is only fair because proceeds from trust lands are generally not 

taxable. Second, and critically important to the poorest among the class, the Cobell 

settlement funds shall not be considered when determining eligibility for programs 

such as TANF, SSI and food stamps. The last thing the parties want is to further 

victimize poorer class members by preventing them from receiving benefits from 

programs for which they would otherwise be eligible. 

Second, there are suggestions that the settlement should not have encompassed 

claims for trust administration since it is contended the Cobell case did not involve 

mismanagement of trust assets. This is not correct. The Cobell case has always insisted that the government account for all trust assets—not just money but the land 

and natural resources that are at the heart of the individual Indian trust. And, the 

district court invited plaintiffs to amend our complaint to include these claims in 

the litigation well before these settlement negotiations. In other words, their inclusion should be no surprise. Indeed, while true that there are certain trust damages 

claims that are now expressly included that were not before, understand that virtually all settlement discussions—including those led by this Committee and the 

Senate Indian Affairs Committee—have contemplated the inclusion of all such individual claims. The largest and oldest tribal organization, the National Congress of 

American Indians passed unanimously a resolution in 2006 endorsing inclusion of 

all trust management claims if, where as here, there is an opt out. 

I and others were also counseled on this point by the following sober reality: Very 

few trust mismanagement cases have ever been filed and those that have are very 

expensive, extremely time consuming and fraught with risk. There is an obvious 

reason for this. For most beneficiaries, the claims are relatively modest when compared with the cost of litigating against the government and the legal obstacles in 

doing so. Legal hindrances abound, such as statute of limitations and jurisdictional 

restrictions, and together with the cost prohibitive nature of litigation, help explain 

why so few have been brought. For the great majority of beneficiaries, this settlement represents the only opportunity for them to receive any compensation for the 

government’s mismanagement of their trust assets. For those who wish to pursue 

those claims independently, they have the opportunity to do so by opting out of the 

trust administration portion of the settlement. The agreement preserves all legal 

mechanisms to enable them to do so. 

Third, there are those who criticize the amount that the class attorneys may receive by reason of this settlement. That criticism is misplaced. This is not a case 

where attorneys are attempting to get a fee based on a quick settlement. The attorneys in this case undertook substantial risk in filing and prosecuting this case on 

behalf of the 500,000 individual Indian beneficiaries in 1996. Many of the attorneys 

gave up their practices to work solely on it. It has often consumed 18 hour days, 

seven days a week. They have engaged in 7 major trials, handled countless appeals 

by the government and reviewed tens of millions of pages of documents. They responded when no on else—not even Congress—was able to correct the wrongdoing 

that individual Indians endured. As a result of their efforts, for the first time in over 

100 years, the government has been held accountable for its mismanagement of the 

IIM Trust. Moreover, solely as a result of their efforts, reform of the Trust is a real 

possibility. The benefit to class members from their efforts is considerable. They 

have agreed to limit their petition for fees to under $100 million. This is less than 

3% of the total settlement—very modest when compared with fees typically awarded 

in class actions. Class members will have the opportunity to object to the fees and 

those objections will be considered by the Court before any fee award. The attempt 

by some such as ITMA to limit the fees further to those available under the Equal 

Access to Justice Act (EAJA) suffers from two infirmities. First, the government has 

made clear that it is not open to paying fees through EAJA. Second, if in the end, 

56 

lawyer fees are so dramatically curtailed, then how will individual Indians ever obtain the kind of highly competent and dedicated counsel necessary to bring a difficult case like this next time? It is already tragically difficult to attract such lawyers and ITMA would like to make it all the more challenging. This makes no sense. 

Fourth, there are those that have even suggested that the named plaintiffs in this 

case, including me, will profit from this settlement. This again is erroneous. The incentive fee contemplated is an award to named plaintiffs by the Court for their work 

in assisting in this case and to cover expenses. As you might expect, the work required has been considerable. However, most of the money requested will be for reimbursement of expenses incurred during the 14 years of this litigation. Millions of 

dollars have been spent in prosecuting this case, including payment of experts, and 

covering charges for transcripts and other court costs. I have contributed substantial 

funds to aid in the prosecution of this case. The Blackfeet Reservation Development 

Fund, a non profit, has used millions of its own funds as well. Furthermore, many 

of the grants we received are in the form of loans and are repayable. Importantly, 

any class members not comfortable with the incentive award will have a opportunity 

to have their views heard by the Court before any payment is made. However, those 

who have advanced the money to prosecute this case deserve to be reimbursed. 

Finally, some who don’t understand the reality of the historical data and the lack 

of reliable information, have criticized the distribution scheme contemplated in this 

settlement. They say it doesn’t track with precision the losses for each beneficiary. 

The reality is that there is no data to establish actual losses. This is indeed rough 

justice. But it is the best possible way to achieve three important objectives: (1) 

being fair so that all receive a meaningful payment of at least $1,500, while rewarding high dollar accounts that likely suffered the most losses; (2) permitting for a 

prompt distribution where most beneficiaries will be completely paid within a few 

months; and (3) will not waste significant money on lawyers, accountants and Special Masters trying to figure out what is owed to each individual. In addition, the 

Court will hear any objections to the distribution scheme and make a determination 

on its fairness. 

Some have asked to establish an extensive and expensive process where beneficiaries can have essentially mini-trials before a Special Master. This is absolutely 

and unequivocally foolish. It would waste significant funds on figuring out who gets 

what and will take years before beneficiaries receive their distributions. Moreover, 

it will not be advantageous to those beneficiaries who can prove their case since 

such beneficiaries have the ability to opt out anyway and pursue their claims independently. In short, such a proposal would take years, cost hundreds of millions and 

be no fairer than the current model. This is precisely why the parties rejected such 

an approach. 

In summary, this settlement will do a lot of good. It will get more than $3 billion 

in the hands of beneficiaries. It will provide monies for land consolidation. It will 

create a $60 million scholarship fund. Moreover, there will be a Secretarial Commission to recommend additional trust reforms that are desperately needed. And 

there is an agreement to perform an audit of the Trust. No audit has ever been 

done. To heal the division between individual Indian trust beneficiaries and the government that is reflected historically and in the nearly 14 years of our litigation and 

to begin to establish confidence that the IIM Trust is managed in accordance with 

trust law, transparency is essential. Too many records have been destroyed. Too 

much deception has occurred. Importantly, this settlement will allow individual 

Indians to look forward and work collaboratively with their trustee to ensure a better tomorrow. 

We know this settlement does not solve many of the serious underlying problems 

plaguing this Trust. We know that reform must continue and cannot stop here. We 

will continue our efforts to ensure accountability. We have had to spend too much 

time looking backwards, trying to address the terrible wrongs of the past. Now, my 

hope is that we look forward to correct those wrongs so that individual Indian trust 

beneficiaries finally receive that which rightfully is theirs. 

When I embarked on this settlement process, I was skeptical that this result could 

be achieved. But we were able to reach a resolution. There has been too much discussion about what we would like to achieve for individual Indian beneficiaries. It 

is now important that we implement this historical settlement. I now ask Congress 

to swiftly enact the necessary implementing legislation so we can begin to distribute 

our trust funds without further delay. Hundreds of thousands of individual Indians 

have waited patiently for far too long. 

57 

NOTE: The 57-page ‘‘Class Action Settlement Agreement’’ dated 

December 7, 2009, has been retained in the Committee’s official files. It can 

be found at the following website: 

www.doi.gov/documents/ClassActionSettlementCobellvSalazar.pdf 

[The ‘‘Agreement on Attorneys’ Fees, Expenses, and Costs’’ submitted for the 

record follows:] 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

ELOUISE PEPION COBELL, et al. Plaintiffs, 

vs. 

KEN SALAZAR, Secretary of the Interior, et al, Defendants. 

Case No. l:96CV01285-JR 

Agreement on Attorneys’ Fees, Expenses, and Costs 

December 7, 2009 

WHEREAS the Parties entered the Class Action Settlement Agreement, dated December 7, 2009 (‘‘Main Cobell Agreement’’); and 

WHEREAS the Parties desire that the Class should compensate Class Counsel for 

reasonable attorney fees and related expenses and costs; 

THEREFORE, the Parties hereby enter this Agreement on Attorneys’ Fees, Expenses, and Costs (‘‘Fee Agreement’’). 

1. Unless otherwise defined herein, this Fee Agreement incorporates all defined 

terms in the Main Cobell Agreement and shall be interpreted in a manner consistent with the Main Cobell Agreement. 

2. The amount of attorneys’ fees, expenses and costs shall be decided by the Court 

in accordance with controlling law and awarded from the Accounting/Trust Administration Fund. 

3. The Parties agree that litigation over attorneys’ fees, expenses, and costs 

should be conducted with a civility consistent with the Parties’ mutual desire to 

reach an amicable resolution on all open issues. The Parties agree therefore that 

all documents filed in connection with the litigation over attorneys’ fees, expenses, 

and costs shall consist of a short, plain statement of the facts and the law with the 

goal of informing the Court of relevant information for its consideration. 

Attorneys’ Fees, Expenses, and Costs Incurred through December 7, 2009. 

a. Plaintiffs may submit a motion for Class Counsel’s attorney fees, expenses, and costs incurred through December 7, 2009. Such motion shall 

not assert that Class Counsel be paid more than $99,900,000.00 above 

amounts previously paid by Defendants. Unless otherwise ordered by the 

Court, Plaintiffs’ memorandum of points and authorities in support of 

such claim shall not exceed 25 pages and shall be filed no later than 

thirty (30) days following Preliminary Approval, and Class Counsel’s 

reply in support of such claim shall not exceed 15 pages. 

b. Defendants may submit a memorandum in opposition to Plaintiffs’ motion. Such memorandum shall not assert that Class Counsel be paid less 

than $50,000,000.00 above the amounts previously paid by Defendants. 

Unless otherwise ordered by the Court, Defendant’s memorandum shall 

not exceed 25 pages and shall be filed within 30 days after Plaintiffs’ 

motion. 

c. Concurrently with any motion for fees, expenses, and costs of attorneys 

through December 7, 2009, Plaintiffs shall file statements regarding 

Class Counsel’s billing rates, as well as contemporaneous, where available, and complete daily time, expense, and cost records supporting this 

motion. Defendants may also submit an annotated version or summary 

of the time, expense and cost records in support of their opposition. 

d. Plaintiffs disclosure and filing of the records referenced in the preceding 

paragraph shall not constitute a waiver of any attorney client privilege 

or attorney work product protections. Plaintiffs may request the entry of 

an appropriate protective order regarding such confidential records. 

58 

e. In the event that the Court awards attorneys’ fees, expenses, and costs 

covered by this Paragraph in an amount equal to or greater than 

$50,000,000.00 and equal to or less than $99,900,000.00, Plaintiffs, Class 

Counsel and Defendants agree not to file a notice of appeal concerning 

such award. 

5. Attorneys’ Fees, Expenses, and Costs Incurred after December 7, 2009. Plaintiffs 

may submit a motion for Class Counsel’s attorneys’ fees, expenses, and costs incurred after December 7, 2009, up to $10,000,000.00. Such motion shall be based 

solely on attorney hours and actual billing rates and actual expenses and costs incurred, and may not be justified by any other means (such as a percentage of the 

class recovery). Such motion shall be resolved in such manner as directed by the 

Court. Concurrently with any motion for post Agreement attorneys’ fees, expenses, 

and costs, Plaintiffs shall file statements regarding Class Counsel’s billing rates, as 

well as complete and contemporaneous daily time, expense, and cost records supporting this motion. 

6. Should (a) either party terminate the Main Cobell Agreement pursuant to the 

terms thereof, (b) the Main Cobell Agreement become null and void because a condition subsequent does not occur, or (c) the Main Cobell Agreement not finally be approved by the Court, this Fee Agreement shall be null and void, and the parties and 

Class Counsel shall take such steps as are necessary to restore the status quo ante. 

7. Nothing in this Fee Agreement shall affect the right of any non-party to this 

Fee Agreement. 

Wherefore, intending to be legally bound in accordance with the terms of this Fee 

Agreement, the Parties hereby execute this Fee Agreement: 

SIGNATURES 

Wherefore, intending to be legally bound in accordance with the terms of this 

Agreement, the Parties hereby execute this Agreement: 

FOR PLAINTIFFS: 

Dennis M. Gingold, Class Counsel 

Keith M. Harper, Class Counsel 

FOR DEFENDANTS: 

Thomas J. Perrelli, Associate Attorney General 

Mr. FALEOMAVAEGA. Chairman Rahall. 

The CHAIRMAN. Thank you. Elouise, you heard my opening statement, and I certainly want to reiterate my commendation for you, 

and praise for you. You certainly have demonstrated a dogged determination, a persistence and patience, and your fight for justice 

for Indian Country will be long remembered after all of us in this 

room have departed. 

I wanted to also compare the misperceptions that I guess that 

are out there, and salute you as I said in my opening statement 

for your Dear Elouise column, or hotline, that you have opened to 

answer a lot of those misperceptions. 

And fears, and unjustifiable fears, but yet because of all of the 

injustices that have been done, you can understand from where it 

comes. It reminds me very much of our health care debate, and the 

misperceptions that are out there, and those for their own reasons 

that may be stirring up opposition unjustifiably on those who stir 

up the opposition. 

But again the fear you can understand, and the anger and frustration, because it has been so long as we all know, 13 or 14 years. 

You heard this figure mentioned earlier that there is an agreement 

59 

that establishes a range of 50 to a hundred-million dollars for attorney fees. Can you help us on how this range was developed? 

Ms. COBELL. Well, this range is 3 percent, and I firmly believe 

that the attorneys have to be paid a hundred million dollars. You 

know, the danger that we run into is when you start pulling back 

attorneys’ fees. 

I am going to go back a little bit in time before I filed this lawsuit. I went shopping for attorneys. I went to those big attorney 

firms here in Washington that represented tribes. I asked them to 

take this case. 

They told me no, we are not taking the case. It is going to take 

too long, and we just are not going to take the case. I could not 

get people to represent me, and these were attorneys that made 20 

and 30 percent off the Court of Claims representing Indian tribes, 

and they just would not do it. 

And then I finally found the attorneys that would represent, and 

I thought that the amount that they have filed for is very reasonable, very reasonable. I have no problem. I have done research, and 

I know that it is 25 percent, 20 percent, 25 percent for attorneys’ 

fees for large cases. 

And I believe that if we have good attorneys and we won—and 

let me tell you that we won. In the 14 years, we won huge victories, 

and it is almost like a surgeon. When my husband and I went 

through a transplant, I gave him a kidney, we had the top surgeon. 

It cost us a lot of money. 

But we got the top surgeon because we wanted to live. I got the 

top attorneys because I wanted over 500 thousand individual 

Indians to live, and I wanted to make sure that they had proper 

representation. So I think that three percent is a bargain basement 

amount to pay the attorneys. 

The CHAIRMAN. Could you tell us how this settlement may affect 

future trust management by the Department of the Interior? 

Ms. COBELL. Well, I have to believe that if anything that this 

court case has done has shown the breach of trust, that the Department of the Interior is unlawful, or that they are not doing. 

And so I believe that there is only one way to go, and that is to 

change, and I heard Secretary Hayes talk about the Secretarial 

order that Secretary Salazar is doing, where he is going to have a 

commission and to address trust reform, and continue, and I have 

to believe. 

I met with Secretary Salazar specifically one on one on this, because I was very worried about the fact that trust reform would not 

be performed, and I think his leadership—but it will take all of us 

to continue to make sure that trust reform is implemented properly 

for individual Indians. 

And I guess I just have to believe that when I have the Secretary 

of the Interior and the Attorney General telling me that they have 

committed, if I can’t believe them, then I don’t know who I can believe. 

The CHAIRMAN. You have touched upon this, but would you like 

to elaborate anymore on what this settlement agreement means for 

future generations? 

Ms. COBELL. Well, I believe that this will, like the panel before 

has stated, this is for the past, compensation for the past. I think 

60 

that the fact that this is the first victory for many individual 

Indians is so empowering for so many individual Indians that they 

do have a voice, and that they can be heard. 

And I feel that the young people are learning from this case. 

They are learning from this case. They are understanding that they 

have to pay attention. That you have to become very active in the 

management of your assets. You cannot be passive. 

And you can’t say, oh, the government is going to take care of 

it for us, because they are not. So you constantly have to be very 

active, and I think that this case has done that. 

You know you cannot believe the number of calls that class counsel gets, and the number of letters, and the number of calls, and 

I would like to invite each and every one of you to my little teeny 

office at Blackfeet, where I have boxes and boxes of letters from 

people that say thank you. Thank you for standing up. Thank you 

for drawing a line in the sand and saying no more. 

And we want to make a change. This change has to happen, and 

I do think that by sitting with the government and coming together 

for a settlement that we can change together. That the relationship 

between the Department of the Interior, and the Department of 

Justice, and individual Indian account holders, will improve, and 

we have to be able to work together to move forward. 

The CHAIRMAN. Thank you, Elouise. Thank you again. 

Ms. COBELL. Thank you for your nice comments. 

The CHAIRMAN. Thank you. 

Mr. FALEOMAVAEGA. Our Senior Ranking Member, the Gentleman from Washington, Mr. Hastings. 

Mr. HASTINGS. Thank you, Mr. Chairman, and thank you for 

being here, and certainly I think it needs to be acknowledged the 

long time period by which you have been involved in this. 

I have said in this Committee on other occasions where there are 

settlements, and not necessarily Indian settlements, but other settlements, that generally speaking those are very tough decisions. 

But the good part about it generally speaking is that they are decided by the people that are involved, and I applaud that process. 

I think that generally is good. You heard today, however, that 

there are some questions regarding the transparency and the understanding of what this settlement means. It is very legitimate, I 

think. 

And I think that process needs to be followed. Maybe one thing 

that you could do to help that is to share all of your—I think you 

called them Letters to Elouise, with all of the people that have 

questions about that. 

I mean, if there is transparency, then for goodness sakes, share 

all of that information, and you can get to a point of an understanding. I think that is what we all want, but there are some legitimate questions out there. 

Let me focus a bit though, at least from my understanding here 

of the attorneys’ fees, because there was questions that were raised 

on all of that. Now, as I understand it, your initial lawsuit was because of the accounting, and you said that was impossible, and so 

therefore you came to a settlement on that. 

Now, my understanding of the total amount of dollars of that 

part of it, the accounting, is roughly $300 million. The non-litiVerDate Nov 24 2008 15:23 Apr 28, 2010 Jkt 000000 PO 00000 Frm 00064 Fmt 6633 Sfmt 6602 L:\DOCS\55393.TXT Hresour1 PsN: KATHY
61 

gated claims that is part of that is about $1.1 billion, nearly three 

times as much. 

Yet, the attorney fees come out of that portion as I read the settlement. So that means that part of the damage claims—and correct me if I am wrong, but you said that you weren’t necessarily 

happy that was part of the settlement agreement, but all the attorney fees come out of that portion of the money. I am just asking 

you if that is correct or not. 

Ms. COBELL. I am going to take a run at the first question, and 

then I have Bill Dorris, our attorney, talk about that. But it was 

not just recently that the trust mismanagement was included in 

our case. 

It was a while back, and Bill Dorris will talk about it, where the 

District Court had said that you are now to include the accounting 

of trust assets other than just the funds. So that became a part of 

this case early on, and I can’t remember the exact date, and I will 

turn this over to Bill. 

STATEMENT OF WILLIAM E. DORRIS, MANAGING PARTNER, 

KILPATRICK STOCKTON LLP, WASHINGTON, D.C. 

Mr. DORRIS. Yes. The court did invite the Plaintiffs to amend 

their complaint to add those claims at some point during the course 

of the case, and that was in approximately 2004. 

But one of the things that I think is important to understand is 

that from the very outset when we asked for an accounting, one of 

the natural outgrowths of an accounting once you determine how 

well the trust has been managed or mismanaged, you then have a 

restatement of accounts. 

So in one sense money was always part of this case, in that one 

of the outgrowths from the accounting itself would be a restatement of the accounts. Now, one of the great benefits that we got 

for most of the Plaintiff class, and what will be the trust administration class, is that they have the opportunity now, without further litigation, to collect money tax free to settle those claims. 

However, we were very careful in the settlement agreement to 

make sure that if they did not want to take advantage of that, they 

could opt out and have all of their rights still preserved, and that 

is very clear in the settlement agreement. 

Now, one of the issues that the District Court will have to determine in deciding what the right amount of attorneys’ fees is, because that is not decided. That will ultimately be for the discretion 

of the court, is that normally in this district ranges are from 20 to 

30 percent recovery for attorneys’ fees. 

As Ms. Cobell was indicating, if you look at the full $3.4 billion 

amount, an award of a hundred million dollars would be only 3 

percent. But one of the issues that the District Court will have to 

determine after it hears from all of the class members, is what percentage is to apply and to what funds. 

Should it only apply to the historical accounting portion of the 

$1.4 billion, or should something be given to the attorneys for perhaps not litigating fully the trust administration claims, but still 

getting those benefits for the class. 

So that will be an issue for the court to decide, but let me also 

tell you that these claims have been investigated very thoroughly 

62 

before we settled them. As part of our accounting claim, we had extensive research and analysis done by experts, in terms of how 

much oil, gas, and other minerals, timbers, grazing rights, ranching, all of the various assets from the Plaintiff class, what should 

the government have collected on that. 

And we had extensive expert analysis done so that we felt like 

we were in a very good position when we settled these claims, 

though they are subject to an opt out, to get a fair settlement for 

the Plaintiffs. 

Mr. HASTINGS. Let me respond by simply saying that I am not 

an attorney, and I appreciate your response and legalese. I am 

going to have to go back and digest that in my way with the information that I have, and what you are saying. 

If you take the total 3.4, over half of that is something in future 

claims, but yet you are saying that should be part of the—or at 

least as I understand it, that should be part of the pot by which 

attorney compensation comes from. I just have a question, and so 

let me end here, but ask this of both of you. As I mentioned earlier 

to the Department of Justice and the Department of the Interior, 

hearings like this, it is good to have these hearings, because it 

brings out issues that need to be resolved. 

There are going to be some questions, obviously, as our staff kind 

of digests what you said, and we would obviously send you some 

questions so that we could further explore so we can understand 

exactly what was said here. 

If we could get your quick response—and I asked Justice and Interior because they turned around my questions in a two-week time 

period, and if you could follow that, that would be very helpful, because, Ms. Cobell, you said that timing is of the essence. 

Obviously, timing is of the essence to us, because we are part of 

this whole formula. I mean, again, if it was settled without any 

monetary damages, we would not be part of it. 

But there are monetary damages, and that means it brings us 

into this, and we have to understand what we are going in a proper 

way to make the right decision. We can only do that if we have information that satisfies our issues, too. 

And let me just simply conclude as I opened this that settlement 

agreements from my point of view are generally a very, very good 

way to go, simply because the people that are involved are the ones 

that are making the decision. 

But there are always questions that come of that, and we certainly heard that today. I think that those things need to be resolved so we can feel comfortable in going forward with this settlement agreement. So, thank you, Mr. Chairman. 

Mr. FALEOMAVAEGA. Thank you. When Ms. Cobell filed a lawsuit, 

and this was in 1996, I had this crazy idea and said why can’t we 

just get some of that money from the Interior Department since it 

is owing to Indian Country, and establish some kind of a scholarship fund, and hopefully maybe Indian Country will give approval 

to something so that we could utilize. 

And this is 14 years ago, an I am just so happy to hear that one 

of the factors that was given into your negotiations is that there 

will be a scholarship fund. Can you elaborate on that a little more, 

Ms. Cobell? How much is going to be allocated? 

63 

Ms. COBELL. The scholarship fund is $60 million and, of course, I wanted a hundred million, but I had to give in to $60 million for 

a scholarship fund, but it is for all individual Indians that would 

like to pursue their education. And no matter if it be at tribally 

controlled colleges, universities, or vocational schools, and I think 

this is a very good move. We have already had different private 

foundations that want to match the scholarship fund. 

So it is a great opportunity for individual Indians to get educated, and I just hope that every single one of them take on land 

issues, and get educated in that area to continue to understand the 

management of their land. 

And one of these days there, I think that Mr. Nunez talked about 

his association, and I that it is really important to have young people start having associations, and having places for individual 

Indians to go, and to learn the expertise that has to be known in 

order to manage your own assets, and to improve your own quality 

of life. 

Mr. FALEOMAVAEGA. I for one would certainly absolutely support 

your suggestion that it should be a hundred-million dollar pot specifically for scholarship funds, because I honestly believe that is 

only for the betterment, and not only the future of Indian Country, 

but for the young generations coming up in the United States. 

I just wanted to share with you a little bit of how much I enjoyed 

reading—I believe he was a Lakota—Dr. Vine Deloria, and how 

much I deeply enjoyed reading some 20 books that he had written. 

One of them was ‘‘Custer Died For Your Sins,’’ and I think the 

other book was ‘‘God is Red.’’ 

I hope my colleagues will have a chance to read those two books, 

because I think it tells a lot about the—and I just say that Mr. 

Deloria is one of my admirers, but I will once again say, Ms. 

Cobell, thank you for our patience. 

I realize that there are a lot of questions raised by what is going 

to happen now and hopefully there will be a better understanding 

in Indian Country about what you have tried to do, and what you 

have achieved, and with the help of the attorneys that have been 

willing to do all of this on behalf of Indian Country for some 14 

years now. I do want to thank you. 

Ms. COBELL. Mr. Chairman, can I use this special time to officially say goodbye to Marie Howard. Marie Howard has been one 

of the bright spots that makes you want to continue to come back 

and testify before these committees, and she has just been committed, and I don’t know what we will do without her. Goodbye, 

Marie. 

Mr. FALEOMAVAEGA. Thank you very much. Without any further 

statements, the hearing is adjourned. 

[Whereupon, at 12:43 p.m., the Committee was adjourne 

[Additional material submitted for the record follows:] 

[A statement submitted for the record by the Rosebud Sioux 

Tribe follows:] 

Statement submitted for the record by the Rosebud Sioux Tribe 

For decades, the Rosebud Sioux Tribe (‘‘Tribe’’) has called for Congressional commitment of substantial federal funding to solve the fractionated interest problem 

64 

created by the federal government and left to tribes to solve. This testimony only 

concerns the portion of the Cobell Class Action Settlement Agreement (‘‘Settlement 

Agreement’’) concerning fractionated interests; specifically, the $2 billion Trust 

Land Consolidation Fund (‘‘Fund’’). 

As described further herein, our Tribe has been on the cutting edge in developing 

creative, effective and sustainable program for consolidation of fractionated interest. 

The only thing missing has been a comparable commitment of federal financial and 

administrative assistance. The federal government has been paltry at best, and at 

times go as far as to undermine the Tribe’s efforts. In order to facilitate consolidation of fractionated interests, language in the Cobell litigation settlement bill must 

be revised to make the Trust Land Consolidation Fund to be used broadly for Indian 

land consolidation purposes. For example, funds should be available to eliminate 

liens already acquired by the Indian Land Consolidation Program (‘‘ILCP’’) for 

tribes. Funds must also be available to be used to immediately eliminate any and 

all tribal loan obligation (especially to the United Sates) associated with land consolidation efforts and programs. This would benefit those Indian tribes, like Rosebud, that have already begun consolidation of their own fractionated interests. Furthermore, it will ensure that more of the $2 billion is applied toward Indian land 

consolidation before the ten (10) year ‘‘sunset date’’ established in the Settlement 

Proposal. (The Tribe sees no reason for such a time limit in any case.). 

Brief History of the Fractionation of the Rosebud Sioux Tribe Reservation. The Rosebud Sioux Tribe Reservation (‘‘Reservation’’) occupies only a small 

portion of the former Great Sioux Reservation. Specifically our Reservation consists 

of what remains after 90 million acres were taken from the Tribe and tribal members during Allotment and Homesteading. Subsequent cessions to the United States 

further diminished our land base. As with many other tribes, the Tribe is still trying 

to recover land lost through the checkerboarding of our Reservation. Consistent with 

the checkerboarding of Reservations, our current Reservation is comprised of tribal 

land, individual allotments and fee land owned by tribal members and others. Additionally, some allotments and tribal land fall outside the currently acknowledged 

boundaries of the Reservation. Due to the devastating diminishment of our land 

base, the Tribe has spent decades reacquiring and consolidating the scattered holdings, both within and outside the Reservation boundaries. 

Federal Government Fractionated Interest Consolidation Efforts. To assist 

tribes with the consolidation of fractionated interests within reservation boundaries, 

the federal government developed the ILCP. The ILCP purchases fractionated interests in the name of an Indian tribe. However, subsequent to purchase, interests are 

immediately slapped with a lien. These liens make it impossible for the land to be 

transferred to tribes. Lease income generated from ILCP purchased interest is used 

by the ILCP to purchase more fractionated interests. This actually results in the 

generation of debt in the name of tribe for which the interest was acquired. As is 

evident, the practice of placing liens on ILCP purchased interests undermines the 

overall goal of land consolidation. Tracts are not placed in trust for tribes, and tribes 

are put in debt for land acquisitions they cannot access. 

The federal government also created a lending program through the U.S. Department of Agriculture (‘‘USDA’’), under the Farm Service Agency, that allows tribes 

to borrow money to resolve the fractionation problem internally with the use of 

Indian Land Acquisition Loans. However, interest rates on these loans become so 

outstanding that tribes are required to pay interest in amounts in excess of several 

times the principal. 

Rosebud Sioux Tribe Fractionated Interest Consolidation Efforts. Since 

1943, the Tribe has operated a fractionated interest program called Tribal Land Enterprise (‘‘TLE’’). TLE has been a cutting edge program, and the model upon which 

other tribes have followed. Like the ILCP, TLE is working to resolve the 

fractionated interest problem within the Reservation. However, TLE uses new and 

innovative ways to acquire fractionated interest, which have been commended by 

the Department of the Interior. Through TLE, the Tribe has borrowed $8.5 million 

in Indian Land Acquisition Loans from the USDA. To date, the Tribe has repaid 

the principal amount on its Indian Land Acquisition Loans. However, as previously 

mentioned, the Tribe has fallen victim to interest payments that now total several 

times more than original loan amounts. 

Rosebud Sioux Tribe Proposal for a Mutually Beneficial Solution. In the 

true spirit of consolidation of fractionated Indian land interests, the Tribe has time 

and time again submitted proposals to the Bureau of Indian Affairs (‘‘BIA’’) for the 

return of land purchased in the name of the Tribe though the ILCP to the Tribe. 

We continue to demand that liens on the ILCP tracts be forgiven, and the ILCP 

tract lease income be transferred to the TLE program. 

65 

Our proposals are just and reasonable. Especially in light of the fact that programs like TLE save the federal government money by reducing the cost of administering fractionated interests for the federal government. Also, since the infrastructure of TLE is already in place, and TLE’s administrative needs are already met, 

funds funneled through TLE can be used solely to acquire fractionated interests. 

Our proposals are the most economic and efficient way for the federal government 

to execute Indian land consolidation! 

Trust Land Consolidation Fund Created from the Cobell Settlement 

Agreement. The Class Action Settlement Agreement (‘‘Settlement Agreement’’) for 

Elouise Pepion Cobell v. Ken Salazar, Secretary of Interior, et al., No. Civ. 96-1285 

(JR) (‘‘Cobell’’) was entered into on December 7, 2009. The Settlement Agreement 

provides for the establishment of a Trust Land Consolidation Fund (‘‘Fund’’). As defined in the Settlement Agreement, the Fund shall have $2 billion ‘‘allocated to Interior Defendants and held in a separate account in Treasury for the purpose of acquiring factional interests in trust or restricted land...’’. 

Interior Defendants are to distribute the Fund in accordance with the Indian 

Land Consolidation Program authorized under 25 U.S.C. §§ 2201 et seq. The Fund 

shall be used for the purposes of (1) acquiring fractional interests in trust or restricted lands; (2) implementing the ILCP; and (3) paying the costs related to the 

work of the Secretarial Commission on Trust Reform, including costs of consultants 

to the Commission and audits recommended by the Commission. 

Interior Defendants have no more than ten (10) years from the date of the final 

approval of the Settlement Agreement to expend the Fund. If the Fund is not expended at that time, any amount remaining in the Fund will be returned to the 

Treasury. 

Realization of Fractionated Interest Consolidation on the Rosebud Sioux 

Tribe Reservation. As earlier stated, the Tribe has repeatedly requested that 

lands purchased through the ILCP be returned to the Tribe lien free. This is authorized under ILCA, as amended by the American Indian Probate Reform Act 

(‘‘AIPRA’’), per 25 U.S.C. § 2213(b)(3), ‘‘Removal of Liens After Findings.’’ 

According to ILCA, the Secretary of the Interior (‘‘Secretary’’) can forgive the repayment of a lien if: (1) the costs of administering the interest will equal or exceed 

the projected revenues; (2) it will take an unreasonable period of time for the parcel 

to generate revenue that equals the purchase price; or (3) a subsequent decrease in 

the value of land or commodities associated with the parcel of land make it likely 

that the interest will be unable to generate revenue that equals the purchase price 

paid for the interest in a reasonable time. To date, the Secretary has not forgiven 

the repayment of liens on the Tribe’s ILCP tracts, nor indicated that our proposal 

is even being considered. 

Additionally, the Tribe has requested that all interest on the Tribe’s Indian Land 

Acquisition Loans be forgiven. Again, to date, the interest on the loans are still outstanding, and no discussion are in place to settle the outstanding interest issue. 

How the Trust Land Consolidation Fund Could Assist the Rosebud Sioux 

Tribe, TLE, and other Tribes with Programs like the TLE. If the Secretary 

is unwilling to forgive the lien as outlined above, the Tribe proposes that funds from 

the Trust Land Consolidation Fund be used to satisfy the liens on the Tribe’s ILCP 

tracts. Additionally, the Tribe proposes that funds from the Trust Land Consolidation Fund also be used to satisfy the Tribe’s outstanding interest on the Tribe’s 

Indian Land Acquisition Loan. 

Language in the Cobell litigation settlement bill must permit the Trust Land Consolidation Fund to be used for the satisfaction of liens on tracts already acquired 

by the ILCP for tribes, and towards loans (both the principal and interest) tribes 

have taken out for land consolidation purposes. Not only would this allowance provide the best benefit to tribes who have already begun consolidation their own 

fractionated interests, it would better ensure that the entire Fund is actually applied toward Indian land consolidation before the sunset date in the settlement. Additionally, allowance of the aforementioned use of the Fund will save the federal 

government money on administrative overhead of ILCP tracts and federal loans. 

Conclusion. The fractionation problem has been and continues to be very costly 

to the federal government, which continues to incur administrative costs on all ILCP 

tracts upon which there is a lien, and federal loans issued for land consolidation. 

If liens and loans could be satisfied from the Trust Land Consolidation Fund created 

through the Cobell Settlement Agreement, the federal government will be alleviated 

of all administrative costs of the ILCP tracts and federal loans. Both the federal 

government and tribes benefits from this arrangement, and the goal of land consolidation is ultimately honored. It is time that the federal government heed decades 

worth of urging from tribes to assist in solving a federally created problem—fractionation of Indian land. The Cobell Settlement Agreement outlines vehicle with 

66 

1See, Exhibits 1, 2 and 3 for definitions of Freedmen from various Administrations. 

2There is a general ‘‘repudiation rule′′’ with regards to equitable trusts that says the statute 

of limitations will not begin to run on claims to enforce a trust against a trustee until repudiation of the trust relationship. The underlying rationale is that the trustee’s possession of the 

trust assets is presumed to be possession for the beneficiary (i.e., the cestui que trust), and the 

time should begin to run on claims against the trustee only when the trustee has taken some 

acts or communicated in a way that is inconsistent with that presumption, so as to provide notice that the trustee has disavowed the trust relationship or is no longer acting in the interests 

of the beneficiary. The repudiation rule is applicable in the Harvest action for the reason the 

Freedmen are seeking recovery of trust property itself, and the Government as evidenced by 

Cobell has not already repudiated its trust relationship with the Freedmen. 

which the federal government can make amends for decades of trust mismanagement. The Trust Land Consolidation Funds provides a vehicle that can help begin 

healing century long wounds. 

The Tribe thanks you for the opportunity to submit a statement for the record. 

[A letter submitted for the record by Percy Squire, Percy Squire 

Co., LLC, Columbus, Ohio, follows:] 

March 10, 2010 

The Honorable Nick J. Rahall, II 

Chairman 

Committee on Natural Resources 

1324 Longworth House Office Building 

Washington, D.C. 20515 

Re: Full Committee Oversight Hearing on the ’′′Proposed Settlement of the 

Cobell v. Salazar Litigation; Proposed Amendment 

Dear Mr. Chairman: 

This correspondence is being sent to you on behalf of the Plaintiffs in United 

States Supreme Court Case No. 09-585. The Harvest Institute Freedman Federation, 

et al. v. United States, now pending. The Harvest action was commenced on December 28, 2006, in the United States Court of Federal Claims by persons aggrieved 

by the breach of fiduciary duties owed by the United States to Freedman as defined 

under the terms of various treaties entered into between the United States and the 

so-called Five Civilized Indian tribes following the Civil War, in 1866. 1 The Cobell 

settlement as currently proposed has profound implications for the Harvest Institute 

action and countenances the perpetuation of historic racial discrimination, unless 

amended, for the following reasons: 

1. The Cobell settlements reaffirms the existence of a trust relationship between 

the United States and Native Americans dating back to at least 1887, the time 

of enactment of the General Allotment Act of 1887, known as the ‘‘Dawes Act’’ 

(the bulk of trust assets alleged within the Cobell action to have been mismanaged by the United States are proceeds of various transactions in land allotted to individual Indians under the Dawes Act), See, Cobell v. Salazar. July 

24, 2009, Opinion of the United States Court of Appeals for the District of Columbia, Circuit No. 08-5500, p. 2. 

2. Under 1866 treaties between the United States and the Five Civilized Tribes, 

Freedmen were accorded equal civic status in relation to the United States as 

members of the Five Civilized Tribes, whether the Freedman were adopted into 

the tribes or not; 

3. Since Cobell establishes that trust obligations are owed and have been owed 

by the United States to Indians since the close of the Civil War, Freedman 

having equal civic status under the 1866 treaties to members of the Five Civilized tribes are also owed fiduciary duties by the United States; 

4. The Cobell settlement is evidence that the United States has never repudiated 

its fiduciary duty as trustee to Native American beneficiaries, i.e. the Cobell 

Plaintiffs; thus 

5. Contrary to the rulings of the United States Court of Federal Claims in Harvest Institute Freedman Federation, et al. v. United States, Case No. 06-907L 

and its affirmance by the United States Court of Appeals for the Federal Circuit, the six year statute of limitations applicable to claims against the United 

States under the Tucker Act 28 U.S.C. § 2501, does not. under the repudiation 

rule 2, begin to run in relation to claims by the Harvest Institute Plaintiffs, 

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The repudiation rule has appeared in cases involving Native American trust claims, For example, in Tunica-Biloxi Tribe v. United States, 1991 U.S. App. LEXIS 10716 (Fed. Cir. may 17, 

1991). 

Under the law of trust, a cause of action for breach of a fiduciary obligation owed by a trustee does not accrue until the trust is repudiated or terminated. Manchester Band of Porno 

Indians. Inc. v. United States, 363 F. Supp. 1238. 1249 (N.D. Cal 1973) (citing United States 

v. Taylor, 104 U.S. 216(1881) 3See, Exhibit 4 for actual treaty terms. 

et al. until the United States as trustee repudiates its trust responsibility to 

the Five Civilized Tribes, an event which Cobell establishes has never 

occurred. 

In light of the above it is inequitable and will result in the perpetuation of racial 

discrimination against the Freedman Plaintiffs in the Harvest Institute action 

(hereinafter ‘‘Harvest Plaintiffs) to settle claims accruing to the benefit of members 

of the Five Civilized Tribes, descendants of slaveholders and persons who were disloyal to the United States while failing to resolve claims against the United States 

by the Harvest Institute Freedmen’s Federation’s putative class. Accordingly, the 

Cobell settlement authorization legislation should be amended to also include resolution of the claims in Supreme Court docket no. 09-585, by adding a subclass to 

the putative Cobell class consisting of the Plaintiffs in the Harvest Institute action and by increasing the settlement amount by $600,000,000.00 to account for claims 

by the 120.000 individual descendants of Freedman entitled to a recovery by reason 

of the breach of fiduciary duties owed to the Freedmen by the United States. A full 

discussion of the grounds for this relief is below. 

A. BACKGROUND 3

During the Civil War, the Five Civilized Tribes entered into treaties with the Confederacy, severing their relations with the United States. As a result of these acts 

of disloyalty the Five Civilized Tribes forfeited all tribal lands and their status as 

government wards. In 1866, the United States made treaties with each of the Five 

Civilized Tribes, setting the terms on which the tribes would continue to exist within the United States, regain their land and trust beneficiary status. All of the treaties with the Five Civilized Tribes eradicated slavery’ within the tribes and provided 

that the emancipated ‘‘Freedmen’’ would have certain rights within the tribes. Although these Treaties had a common purpose, the provisions of the various Treaties 

were not identical. However, under the treaties the Freedmen were emancipated 

and given civic status equal to Indians whether the Freedmen were adopted into 

the Tribes or not. The following is a summary of the provisions of the treaties pertinent to this appeal. 

The Seminole Treaty: The United States entered into its first antebellum treaty 

with the Seminole in 1866. 14 Stat. 755. The treaty provided that the Freedmen 

members would have rights equal to those of Seminoles by blood: 

And inasmuch as there are among the Seminoles many persons of African 

descent and blood, who have no interest or property in the soil, and no recognized civil rights, it is stipulated that hereafter these persons and their 

descendants, and such other of the same race as shall be permitted by said 

nation to settle there, shall have and enjoy all the rights of native citizens, 

and the laws of said nation shall be equally binding upon all persons of 

whatever race or color who may be adopted as citizens or members of said 

tribe. 

14 Stat. 755, 756. In 1898, the Seminole entered into an agreement with the 

United States to allot its land held in common to individual members. 30 Stat. 567. 

The agreement made no distinction between the Freedmen members and the members by blood. All Freedmen members, those represented by Harvest here, did not 

receive allotments under this agreement. 

The Creek Treaty: The United States’ treaty with the Creek is similar to its 

treaty with the Seminole. It provided that the Creek Freedmen would have all the 

rights of members by blood, including the right to share equally in land and funds: 

[A]nd inasmuch as there are among the Creeks many persons of African descent, who have no interest in the soil, it is stipulated that hereafter those 

persons lawfully residing in said Creek country under their laws and usages...shall have and enjoy all the rights and privileges of native citizens, 

including an equal inters tint he soil and national funds, and the laws of 

said nation shall be equally binding upon and give equal protection to all 

such persons, and all others, of whatever race or color, who may be adopted 

as citizens or members of said tribe. 

14 Stat. 785, 786. In 1897, the United States and the Creek Nation agreed to 

terms on which the Creek Nation’s common lands would be allotted. 30 Stat. 496. 

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514. The agreement made no distinction between Creeks by blood and the Freedmen. In 1901, the Creek entered a second agreement with the United States. 31 

Stat. 861. Like the first, this agreement made no distinction between Creek Indian 

and Freedmen members. The Creek Freedmen represented by Harvest here did not 

receive their allotments on the same terms as the Creek members by blood. 

The Cherokee Agreement: The United States entered into a treaty with the 

Cherokee in 1866. The treaty of 1866, inter alia is a basis for Appellants’ claims 

here. A treaty with the Cherokee Tribe and the United States was concluded on 

July 19, 1866. Article IV of that Treaty provided that′′’’... [a]ll of the Cherokee freed 

Negros who were formerly slaves to any Cherokee, and all free Negros not having 

been slaves, who resided in the Cherokee nation prior to June 1, 1861...shall have 

the right to settle in and occupy the Canadian district...and will include a quantity 

of land equal to 160 acres for each person who may so elect to reside in the territory...’’ Thus, as in the case of the Choctaw and Chickasaw Freedmen, the Cherokee 

Freedmen were ‘‘adopted into the tribe [and! [consequently, they and their descendants were entitled to participate in the allotment of lands equally with members of 

the tribe by blood.’’ Ross v. Ickes. 130 F.2d 415 (D.C.C. 1942). It is in the failure 

of the Cherokee to allot land to the Freedmen represented by Harvest in this action 

that gave rise to the Harvest Complaint. 

The Choctaw and Chickasaw Treaty: The United States entered into a treaty 

with the Choctaw and Chickasaw Tribes on April 28, 1866. 14 Stat. 769. This treaty 

provided that the tribes had a choice about how to deal with their Freedmen. If the 

tribes made their Freedmen members within two years, the tribes would receive a 

portion of a trust fund, and the Freedmen would receive 40-acre allotments once the 

Choctaw, Chickasaw and Kansas Indians had made their selections. If the tribes did 

not adopt their Freedmen and the Freedmen voluntarily removed themselves to 

other land within Indian Territory, the tribes would get nothing and the [Freedmen 

would receive a portion of the trust fund. Id] The Choctaw and Chickasaw resisted 

adopting the Freedmen, so the Freedmen were not entitled to the 40-acre allotments. In 1883, the Choctaw adopted the Freedmen into the tribe and declared each 

was entitled to 40 acres. The tribe made no allotments at that time either. Choctaw 

Nation of Indians v. United States. 318 U.S. 423, 425 (1943). The Chickasaw never 

did adopt their Freedmen into the tribe. 

In 1897, the United States entered into an agreement with the Choctaw and 

Chickasaw whereby their lands held in common would be allotted. 30 Stat. 496, 505- 

506. This agreement provided that the Choctaw Freedmen would receive 40-acre allotments. 30 Stat. 506. Before any allotments were made, the United States entered 

into another agreement with the tribes. This second agreement also provided that 

Choctaw and Chickasaw Freedmen would receive 40 acres. 32 Stat. 641. 

While the Choctaw and Chickasaw treaty provided conditional property rights, 

none of the other treaties entitled the Freedmen to individual property rights. The 

Freedmen represented by Harvest here did not receive allotments under their tribes’ 

allotment agreements with the United States at the turn of the 20th century. 

The allotment process under the Dawes Act of 1887 was not initially applicable 

to the Five Tribes. The allotment process was extended to include the Five Tribes 

by the Curtis Act of 1898. Under the Curtis Act, Five Tribes land was allotted. Proceeds from transactions involving Five Tribes land, resulted in assets whose mismanagement is the subject of the Cobell action. just as with assets emanating from 

the General Allotment Act of 1887. 

The claim of the Harvest Plaintiffs alleges land guaranteed under the 1866 treaties to Freedmen by the United States was not delivered to the Freedmen, allotments were not received under the Curtis Act of 1898 which resulted in the resulting failure to establish ‘‘Individual Indian Money’’ accounts for the ancestors of the 

Harvest Plaintiffs. Approving the Cobell settlement authorization without some 

amendment to address this historic breach of trust will perpetuate past historic racial discrimination and have the ironic twist of resolving claims of persons disloyal 

to the United States and slaveholders, while failing to address the claims of persons 

who were not disloyal and guaranteed equal civic and political status, separate and 

apart from tribal membership - the Harvest Plaintiffs. 

The United States has clearly accepted and acknowledged its trust responsibilities 

to the Cobell Plaintiffs. In point of fact, the trial court in Cobell stated: 

• It is clear now that this Court has broad equitable authority to deal with a century or more of trustee nonfeasance and to fashion appropriate remedies, see, 

Cobell v. Norton, 240 F.3d 1081, 1108-10 (D.C, Cir. 2001) (Cobell VI). but it is 

also clear that the authority is constrained by traditional doctrinal limits on 

federal courts that apply in suites against the government, including sovereign 

immunity and separation of powers. 

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• Accordingly, methods that might be unacceptable in a typical trust case, such 

as statistical sampling, are available here, where I am instructed to strike a 

more forgiving ‘‘balance between exactitude and cost.’’ 

• In these unchartered waters, where the trust is of enormous scope, the trustee 

of unusual character, and the data affected with such great uncertainty, the law 

of trusts is a sort of magnetic compass; it cannot be expected to point to due 

north, or to ’′′map directly’’ onto this context. Id. at 1078. 

• One useful is not very precise pointer provided by case law is that a trustee 

may not hide behind obscurity that he himself has created. See, e.g., Rainbolt 

v. Johnson, 669 F.2d 767, 769 (D.C. Cir. 1981) 

• ‘‘As to a trustee who fails to keep proper records of his trust it is usually stated 

that, ’all presumptions are against him’ on his accounting, or that ’all doubts 

on the accounting are resolved against him.’′′ 

• The rules that identify and govern a breach of the accounting duty for a simple, 

25-year trust with a single beneficiary cannot be applied, unaltered, to a 121- 

year old perpetual trust, managed by civil servants, with rapidly multiplying 

beneficiaries and a variety of ever-changing assets. Equity seeks ‘‘to do justice 

to al]—parties, Bollinger & Boyd Barge Serv., Inc. v. The Motor Vessel. Captain 

Claude Bass, 576 F.2d 595, 598 (5th Cir. 1978) (Emphasis added.) 

• —‘‘its orders are adapted to the exigencies of the case,’’ Taylor v. Sterrett. 499 

F.2d 367, 368 (5th Cir. 1974), and it seeks to make accurate evaluations of difficult evidence, not to provide ‘‘windfalls’’ for victims or punishment for wrongdoers. See, Bollinger v. Boyd, 576 F.2d at598. 

• The trustee’s irremediable breach of its accounting duty has unquestionably 

harmed individual plaintiffs (if not necessarily the plaintiff class): their putative 

damages claims have been prejudiced by the impossibility of assembling accurate data about the disposition of their assets. 

These are but a few of the affirmative statements made by the Cobell Court concerning its duty to the Cobell Plaintiffs, including those Cobell Plaintiffs descended 

from persons disloyal to the United States who forfeited all of their land. 

B. SOLUTION 

The Cobell settlement authorization definition of litigation should be expanded to 

include Supreme Court docket no. 09-585, Harvest Institute Freedmen Federation, 

et al v. United States. The settlement amount should be increased by 

$600,000,000.00 to account for the 120,000 Harvest putative class members. A Harvest subclass should be certified in the Cobell action however participation in the 

subclass should not be based exclusively on the ‘‘Final Rolls of Citizens and Freedmen the Five Civilized Tribes’’ the ‘‘Dawes Rolls. Persons who can prove a connection to any of the Congressionally mandated Freedmen census should be eligible to 

apply for Harvest subclass participation, including: The Kern-Clifton Roll of Cherokee Freedmen of 1897 and the Wallace Roll of Admitted Freedmen 1890-1893. The 

exclusive authority of the Dawes Roll must be abandoned in favor of the addition 

of the Kern-Clifton Roll and Wallace Roll and also the ‘‘Ancient documents’’ exception to the hearsay rule codified into the Federal Rules of Evidence which allows 

into evidence probative statements in a document in existence twenty years or more 

the authenticity of which is established.’’ Fed. R. Evid. 803(16). 

C. CONCLUSION 

It is respectfully requested that the Cobell authorization legislation be amended 

as set forth above in order to avoid the perpetuation of historic inequity and blatant 

racial discrimination. 

Sincerely, 

Percy Squire 

Enclosure 

cc: Joshua Pitre; Joshua.pitre@mail.house.gov 

Clay T. Lightfoot; Clay-Lightfoot@cobuni.senate.gov 

Rollie Wilson; rollie wilson@indian.senate.gov 

James S. Hall; Jim Hall@indian.senate.gov 

[NOTE: Attachments have been retained in the Committee’s official files.] 

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