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S. HRG. 111–550 

COBELL V. SALAZAR SETTLEMENT AGREEMENT 

HEARING 

BEFORE THE

COMMITTEE ON INDIAN AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

DECEMBER 17, 2009 

Printed for the use of the Committee on Indian Affairs 

( 

(II) 

COMMITTEE ON INDIAN AFFAIRS 

BYRON L. DORGAN, North Dakota, Chairman 

JOHN BARRASSO, Wyoming, Vice Chairman 

DANIEL K. INOUYE, Hawaii 

KENT CONRAD, North Dakota 

DANIEL K. AKAKA, Hawaii 

TIM JOHNSON, South Dakota 

MARIA CANTWELL, Washington 

JON TESTER, Montana 

TOM UDALL, New Mexico 

AL FRANKEN, Minnesota 

JOHN MCCAIN, Arizona 

LISA MURKOWSKI, Alaska 

TOM COBURN, M.D., Oklahoma 

MIKE CRAPO, Idaho 

MIKE JOHANNS, Nebraska 

ALLISON C. BINNEY, Majority Staff Director and Chief Counsel 

DAVID A. MULLON JR., Minority Staff Director and Chief Counsel 

(III) 

C O N T E N T S 

Page 

Hearing held on December 17, 2009 ...................................................................... 1 

Statement of Senator Barrasso ............................................................................... 3 

Statement of Senator Dorgan ................................................................................. 1 

Statement of Senator Franken ............................................................................... 13 

Statement of Senator Johnson ................................................................................ 14 

Statement of Senator Murkowski ........................................................................... 14 

WITNESSES

Cobell, Elouise, Lead Plaintiff, Cobell v. Salazar ................................................. 17 

Prepared statement .......................................................................................... 18 

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

Justice ................................................................................................................... 7 

Prepared statement .......................................................................................... 8 

Salazar, Hon. Ken, Secretary of the Interior, U.S. Department of the Interior; 

accompanied by David J. Hayes, Deputy Secretary and Hilary Tompkins, 

Solicitor, Department of the Interior .................................................................. 3 

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

APPENDIX

Jacobs, Eddie, Creek Indian Individual Indian Trust Account Holder, prepared statement ................................................................................................... 25 

Keel, Hon. Jefferson, President, National Congress of American Indians, letter, dated December 17, 2009 ............................................................................. 27 

Response to written questions submitted by Hon. John Barrasso to: 

Elouise Cobell ................................................................................................... 28 

David J. Hayes .................................................................................................. 100 

Hon. Thomas J. Perrelli ................................................................................... 29 

Response to written questions submitted to Hon. Ken Salazar by: 

Hon. Tim Johnson ............................................................................................ 97 

Hon. Lisa Murkowski ....................................................................................... 98 

Hon. Tom Udall ................................................................................................ 97 

(1) 

COBELL V. SALAZAR SETTLEMENT 

AGREEMENT 

THURSDAY, DECEMBER 17, 2009 

U.S. SENATE, 

COMMITTEE ON INDIAN AFFAIRS, 

Washington, DC. 

The Committee met, pursuant to notice, at 2:39 p.m. in room 

628, Dirksen Senate Office Building, Hon. Byron L. Dorgan, 

Chairman of the Committee, presiding. 

OPENING STATEMENT OF HON. BYRON L. DORGAN, 

U.S. SENATOR FROM NORTH DAKOTA 

The CHAIRMAN. We will now turn to the hearing. We have the 

Honorable Ken Salazar, who is the Secretary of the Interior, with 

us today. 

Secretary Salazar, while we are waiting, if you would come forward, and you are accompanied the Honorable Hilary Tompkins, 

the Solicitor at the Department of the Interior; the Honorable 

David Hayes, Deputy Secretary of the United States Department 

of the Interior; and the Honorable Thomas Perrelli, Associate Attorney General, U.S. Department of Justice. 

Let me say that we will now convene the hearing itself. The 

hearing is an oversight hearing on the subject of Cobell v. Salazar, and a settlement agreement of that court suit. 

Earlier this month, the parties in the longstanding Cobell litigation reached a settlement agreement. And we have asked them 

here today to describe that agreement. I believe the Cobell settlement agreement is really historic, and I know it has been a long 

and very difficult journey to get to a settlement. 

The case has been in court for over 13 years. It is a tragedy that 

many beneficiaries of this case have passed away before the case 

has been resolved, and they certainly will not benefit from the settlement. 

I have long believed that settling rather than continuing to litigate year after year after year is the best course of action. In the 

109th Congress, Senator McCain and I worked very hard to see if 

we could create that settlement, and that was not achievable. 

The Cobell case itself was caused by a broken land management 

system developed by the Federal Government over a century ago. 

The U.S. was dividing up Indian reservations, allocating land to individual Indians. Remaining lands were sold to non-Indians. As 

part of these policies, the United States became responsible for 

2 

managing Indian lands, for collecting and distributing revenues 

produced from those lands to individual Indians. 

The management duties became burdensome as ownership in the 

lands became fractionated. I know of parcels of land that had 

10,000 owners, fractionated ownership. But in addition to just the 

complication, the fact is a number of American Indians whose accounts were to be handled by the Federal Government found that 

the accounts were mishandled. They were bilked, in my judgment. 

Some were perhaps stolen. The accounts were mismanaged. 

What happened was a terrible blot on the Federal Government. 

And there was required to be some redress for it, and some people 

went to court to seek that redress. And as I indicated, the court 

case lasted a long, long while. 

Today, there are 150,000 Indian land allotments with 4 million 

interests. And for each of these allotments, there could be as many 

as 1,000 owners. The problems is illustrated with 2005 date from 

the Fort Berthold Reservation in my home State. You can see on 

the chart that we are putting up, more than one third of the land 

parcels have between 11 and 1,000 owners. 

Other States have similar problems on their reservations. Some 

are even much worse. The most fractionated Indian allotment is in 

Wisconsin. If Indian land generates income, then each owner will 

have a trust account and the United States is responsible for managing that. In Fiscal Year 2009, there were almost 400,000 individual Indian trust accounts. 

Now, the courts have consistently held that the United States 

failed to properly manage these accounts. But the question of how 

much the plaintiffs have been owed or are owed, and how to fix the 

problem, have remained. And I am really pleased that the settlement agreement compensates the individual Indians whose accounts I believe were mismanaged, and takes a significant step towards decreasing the amount of land fractionation in Indian Country. I think this will help ensure that there will not be another 

Cobell case in the future. 

The terms of the settlement require that Congress approve it before the end of this month. I don’t know whether that will happen, 

but we hope it will happen. And if it doesn’t, we intend to try to 

make it happen. If it does not happen, I hope the parties will agree 

to a brief extension of time. 

It would be an incredible disappointment to waste this historic 

opportunity, and I pledge to you that I want to try to find a way 

in these waning days to make this happen. 

I do want to say that Secretary Salazar, you came to that post 

of Interior Secretary and you perhaps more than anyone in a dozen 

years decided you were going to try to make something happen 

here that was good for everybody, that resolved a longstanding dispute. And I think that is called leadership. And I, for one, really 

appreciate your leadership to try to bring us to this day and to this 

table. So thank you very much. 

The CHAIRMAN. Vice Chairman Barrasso, please? 

3 

STATEMENT OF HON. JOHN BARRASSO, 

U.S. SENATOR FROM WYOMING 

Senator BARRASSO. Thank you, Mr. Chairman, and thank you for 

holding this hearing, a very important hearing. 

I want to extend a warm welcome to my friend, Secretary Salazar. I want to thank you for appearing in front of the Committee 

this afternoon. I am very interested in hearing what you have to 

say about this proposed settlement, so I will be brief. 

First and foremost, I think it is good that the parties in this dispute were able to come together and reach an agreement. For 

whatever reason, that didn’t happen during the last 13 years. That 

said, I believe there are still many questions that can and should 

be asked about the settlement. 

For example, I would like to know exactly how the settlement amount of $1.4 billion was arrived at. I would also like to know 

how the Administration arrived at the figure of $2 billion for the 

fractionated land buy-back program, and how and where they plan 

to spend that money. 

Like many people, I am sure, I would like to know how much of this money will go to attorneys’ fees; $3.4 billion is an incredible 

amount of money, and it is a lot of American taxpayers’ money. 

So it is appropriate that we delve into the details of that settlement with these and other questions, but I hope the witnesses can 

give us answers to these and other important questions this afternoon. If that can’t be done, I would like to receive follow-up or supplemental answers as soon as possible after the hearing. 

So I thank the witnesses for attending and preparing for today’s 

hearing on such short notice. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you very much, Senator Barrasso. 

Are there others on the Committee that wish to make a comment 

prior to my calling on the Secretary? 

If not, Secretary Salazar, I will call on you for testimony. The 

testimony of all of the witnesses today will be entered into the 

record in its entirety, and you may summarize. 

Thank you so much for being here. 

STATEMENT OF HON. KEN SALAZAR, SECRETARY OF THE 

INTERIOR, U.S. DEPARTMENT OF THE INTERIOR; 

ACCOMPANIED BY DAVID J. HAYES, DEPUTY SECRETARY 

AND HILARY TOMPKINS, SOLICITOR, DEPARTMENT OF THE 

INTERIOR 

Mr. SALAZAR. Thank you very much, Chairman Dorgan and 

Ranking Member Barrasso, Senator Murkowski, Senator Johnson, 

Senator Udall, Senator Franken and all the Members of the Committee who are here today. 

Let me at the outset first acknowledge your leadership, Chairman Dorgan, along with the leadership of others who have tried to 

wrestle with this issue for many years, including that of Senator 

McCain, who over many years worked with you to try to bring 

about a resolution to this longstanding and very difficult and very 

bitter dispute. 

Secondly, let me also say thank you to the members of the team 

who are here with me today as witnesses on the Cobell settlement. 

4 

Tom Perrelli, the Associate Attorney General from the Department 

of Justice has worked tirelessly on this matter, really for almost 

much of his last year, along with David Hayes, the Deputy Secretary of Interior, who spent an enormous amount of time working 

with Hilary Tompkins, who is the Solicitor General for the Department of Interior. So I thank them for their particular efforts. 

Let me at the outset just say the history of this case has been 

a long and tortured and painful history. It was born 13 years ago, 

and you on this Committee have been familiar with the different 

chapters of it. Perhaps there are two ways of looking at this case 

and the journey that it has taken. 

One of the ways it to look at it through the acrimony that has 

been created between the United States of America and the Indian 

nations around our Country, and the individual Indians who are 

represented in this class, where the issues that we are trying to 

deal with on reservations from law enforcement to education to economic development frankly have been hindered because of the fact 

that this has been a huge cloud over the relationship between the 

Department of the Interior and Indian Country. 

And so hopefully what this settlement does is it brings about a 

turn in direction relative to the relationship between the United 

States of America in carrying out its trust responsibilities with respect to Indian Country. 

Secondly, you can also tell the story of this journey through some 

of the numbers that have been dealt with that I think Dr. Barrasso, Senator Barrasso, you might know some of these numbers. 

But at some point in time, there was conversation about the fact 

that there was a claim here for $176 billion. There were plaintiffs’ 

requests in 2004, they were public at $40 billion. There was a National Congress of American Indians Task Force which worked 

hard and had come up with a number of $27.4 billion. 

And then in March 1 of 2007, under President Bush’s Administration, Attorney General Gonzalez and my predecessor, Secretary 

Kempthorne, put forth a proposal for an amount of $7 billion to try 

to attempt to settle this case. 

Between that time and this time, the litigation has continued, 

and in part as a result of the decisions that have been made in the 

courts, and the leadership of the court itself through the efforts of 

Judge Robertson, we were able to arrive a number that is $3.4 billion. So that is significantly less than had been talked about in the 

history. So that is part of telling the story of this case. 

Now, what does the settlement do? I think in two broad ways, 

you should be thinking about this settlement in the same way that 

we thought about them, and Chairman Dorgan touched on those 

two things in his opening statement. 

The first is that it does deal with past wrongs. When you think 

about the past wrongs we are trying to right here, these past 

wrongs to way back to over 100 years. And so what we will do is 

correct those past wrongs so we don’t have to look at the past anymore, and we can look to the future. 

The second thing that it does is it sets up a program so that we 

avoid the problem from occurring again in the future. It would do 

us not much good, in my view, to essentially settle the damages 

portion of this case, and not to move forward with a proactive effort 

5 

to try to make sure that we are not back in the same problem five 

years and 10 years and 20 years from now. 

And I think some of the numbers that Senator Dorgan spoke 

about relative to fractionation is only going illustrate that the problem is simply going to exacerbate and become larger. There are 

now 4 million interests that we are dealing with here. But if the 

fractionation issue continues to move forward in the same direction 

that it has moved in, our projection is that we will be dealing with 

11 million fractionated interests by the year 2030. 

So when we think about having to deal with this complex problem, it is only going to get more complex unless we are able to figure out away of moving forward with it. And so that is why the 

buy-out provisions on the $2 billion, Senator Barrasso, that you 

talk about will deal with that very substantive problem to ensure 

that this problem does not occur again. 

So it is for those reasons that I think that this is a fair and reasonable settlement. 

And in conclusion, as Senator Dorgan, Senator Barrasso and the 

Members of this Committee know, one of the priorities that I have 

for the Department of Interior is making sure that we address the 

problems that First Americans are facing all across our Country. 

And getting this litigation behind us will allow us to move forward 

in major efforts we have already launched to deal with the issues 

of public safety and law enforcement, to deal with what hopefully 

will be a new educational era in Indian Country, as well as to deal 

with energy development on Indian Country. 

So there are major issues that proactively require attention. This 

will allow us to do that. 

So I appreciate the opportunity to testify, Chairman Dorgan, and 

if you wish, I would like my colleague from the Department of Justice, Tom Perrelli, also to make a comment, as well as my Deputy 

Secretary for Interior. 

[The prepared statement of Secretary Salazar follows:] 

PREPARED STATEMENT OF HON. KEN SALAZAR, SECRETARY OF THE INTERIOR, U.S. 

DEPARTMENT OF THE INTERIOR; ACCOMPANIED BY DAVID J. HAYES, DEPUTY

SECRETARY AND HILARY TOMPKINS, SOLICITOR, DEPARTMENT OF THE INTERIOR

Good afternoon Mr. Chairman, Vice Chairman, 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 this month, we have 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 forges a solution to an ongoing—and worsening—problem. This negotiated 

agreement lays out a path for the responsible management of Indian trust assets 

6 

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 David J. Hayes, the Deputy Secretary of 

the Department of the Interior, who led our negotiations on my behalf, and by 

Hilary Tompkins, the Solicitor for the Department and the first American Indian 

to hold that post. Ms. Tompkins also participated actively in the negotiations. 

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 trust management and 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. 

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 will receive $1,000 for their historical accounting claims 

and may 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 ‘‘look-backs’’ regarding prior fund accounting and trust management issues. 

Correcting Fractionation 

The second part of this settlement contains provisions designed to address the 

daunting problem called ‘‘fractionation.’’ 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 fractionated 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 143,663 

individual Indian allotments and more than four million fractionated 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. 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. 

Under the provisions of the settlement for land consolidation efforts, the Department would use a $2 billion fund for the buy-back of fractionated 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. As 

part of the class notice process that will notify individuals of this settlement, the 

Department will notify individuals of the opportunity to convey their interest. The 

$2 billion fund will cover administrative costs to undertake the process of acquiring 

millions of fractionated interests. 

7 

The fund will also cover up to $60 million that will be contributed to an existing 

non-profit organization for the benefit of educating American Indians and Alaska 

Natives. In addition to consolidating and preserving tribal homelands, settlement 

parties desired to connect with the next generation of Indians. Under the settlement 

terms, the sale and release of fractionated interests are directly linked to education—an overall benefit to Indian country. With each acquisition of an interest, 

an additional amount will be contributed to the educational Indian scholarship 

based on the value of the interest. For instance, for an interest worth $500 or more, 

five (5) percent of the value will be contributed to the scholarship fund. 

The settlement implementing legislation would authorize the $2 billion fund to be 

established in the U.S. Treasury and the transfer of a portion of this fund to the 

non-profit organization for Indian education scholarship purposes, and also authorize the conveyance of interests held by persons who cannot be located after five 

years, as described above. 

Long-term Trust Reform 

To address the future of Indian trust management, on December 8, 2009, I 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. 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. All right. Mr. Perrelli, you may proceed. Thank 

you so much. 

And thank you, Secretary Salazar. 

STATEMENT OF HON. THOMAS J. PERRELLI, ASSOCIATE 

ATTORNEY GENERAL, U.S. DEPARTMENT OF JUSTICE 

Mr. PERRELLI. Thank you, Chairman Dorgan and Vice Chairman 

Barrasso, and the other Members of the Committee. 

This Committee is quite familiar with the litigation now called 

Cobell v. Salazar, and has worked over the years with the Department of Interior to address it. And I think you have observed over 

time how this has drained Federal resources from Indian Country 

and has created a poor atmosphere for the administration of the 

Federal Government’s trust responsibilities in Indian Country. 

And you, as well as the courts, have encouraged parties to settle 

the litigation, and at times have directly supported efforts to mediate it. 

Built in great part on direction that Members of the Committee 

have provided over the years, on December 7, we signed a settlement agreement that hopes to turn the page on that history. As 

previously indicated, the settlement does require legislative and judicial approval to become effective, but we believe it is fair to the 

plaintiffs, is responsible for the United States and provides a path 

forward to the future. 

8 

The settlement contains many of the elements that Members of 

this Committee have sought to include in prior efforts to resolve 

the matter. First, the settlement resolves plaintiffs’ claims for an 

historical accounting, and will result in cash payment to class 

members and will bring 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. Those payments are $1,000 a person, and will be in conjunction with other payments under the settlement. 

Second, the settlement resolves what are called trust administration claims. Those are claims based on allegations that the government may have mismanaged hundreds of thousands of acres of 

land and millions of dollars, including proceeds from those lands it 

holds in trust for individual Native Americans. 

Now, to date, few of those claims have been brought, but they remain a threat to rebuilding a long-term relationship with the Department of Interior and Native Americans, because there has always been concern that if the Cobell case were to settle, it would 

simply be followed by 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. And each and 

every plaintiff of that class will receive an additional payment 

based on a formula to be approved by the court. Those payments, 

which are in addition to the accounting class payments, will start 

at $500 and go up from there, and for certain plaintiffs who hold 

valuable assets, will result in very significant amounts. The total of those two class resolutions will be $1.4 billion approximately. 

And then lastly, as Secretary Salazar mentioned, the settlement 

provides an important framework for the Department of the Interior to address one of the principal factors that has led us down 

this path, the problem of fractionation. 

The legislation required to implement this settlement accomplishes a number of things, some of which I think are relatively 

technical. But the primary substantive provisions, much like the 

bill that Senators Dorgan and McCain put forward in the 109th 

Congress, authorizes the Secretary to administer the land consolidation program that is critical to the settlement. 

We think this is a successful resolution for Native Americans and 

for all Americans, and hope that we are able to obtain the approvals we need so that we can move forward. Thank you to the Committee for its support over the years. 

[The prepared statement of Mr. Perrelli follows:] 

PREPARED STATEMENT OF HON. THOMAS J. PERRELLI, ASSOCIATE ATTORNEY

GENERAL, U.S. DEPARTMENT OF JUSTICE

Good afternoon and thank you to Chairman Dorgan, Vice-Chairman Barrasso, and 

the other members of the Committee. The litigation that is today known as Cobell 

v. Salazar has lasted thirteen years, and for nearly as long, members of this Committee have taken a keen interest in it. Members have worked with the Department 

of the Interior to address the challenges at issue in it. They have observed that the 

litigation has drained federal resources from Indian Country, and has created a poisonous atmosphere for the administration of the Federal Government’s trust responsibilities in Indian Country. They have encouraged the parties to settle the litigation, and at times have directly supported efforts to mediate it. 

9 

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 this Committee 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 concern 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, 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 the bill 

that Senators Dorgan and McCain put forward to resolve Cobell in the 109th Congress—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 

10 

on it, and the court will ultimately decide whether it represents a fair resolution 

of the claims. 

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 appreciate the Committee’s support over the years, and I look 

forward to any questions you may have. 

The CHAIRMAN. Mr. Perrelli, thank you very much. 

We will now hear from Mr. David Hayes. 

Mr. Hayes? 

Mr. HAYES. Thank you, Mr. Chairman. 

I want to just add a few brief comments about the operational 

aspects of this settlement in terms of the Department of Interior’s 

plans, if approved, for moving out on the land consolidation program and also the trust reform efforts that are part of the settlement, actually part of a separate secretarial order that grew out of 

our discussions in the settlement. 

In terms of the land consolidation program, the $2 billion, we believe, will make a huge dent in the problem that you identified, Mr. 

Chairman. We will be targeting tracts that have 20 or more interest holders. Those tracts contain 84 percent of the total number of 

interests. That is of 4 million interests total, 84 percent of them are 

in tracts that have 20 or more interest holders. That is 37,000 

tracts, with a total acreage of almost 5 million acres. 

We believe that, based on fair market value estimates, that our 

$2 billion will take a huge chunk out of that problem, and diminish 

the extrapolation of interests that the Secretary referred to. 

I would also like to say that in addition to streamlining our trust 

obligation by reducing the number of individual trust holders 

through this land consolidation program, we will save a significant 

amount of money going forward in our trust efforts. By putting a 

close to our historical accounting efforts, we expect to save about 

$250 million going forward. We are spending $25 million a year. 

We expected to have to continue to do that until 2019 if we were 

not able to resolve and end the historical accounting dispute with 

individual account holders. 

And in addition, while we have not done a complete calculation 

of how much money we will save by virtue of having a smaller 

number of trust accounts to account for, we have examples of one 

40-acre parcel, for example, that has 500 owners and that, produces only $2,000 in income. It is valued at $22,000. The administrative costs each and every year to administer these 500 individual trust accounts is over $42,000 a year for a parcel that is 

worth $2,000. 

So if we can diminish the number of individual trusts, as we expect to do, we expect enormous savings going forward in administering the program. And, of course, we expect, as the Secretary 

said, to be able to take better care of the accounts that we are following. 

The final point I will make is in terms of trust reform. An important part of the effort here is the secretarial order that the SecVerDate Nov 24 2008 09:51 Aug 11, 2010 Jkt 057482 PO 00000 Frm 00014 Fmt 6633 Sfmt 6601 S:\DOCS\57482.TXT JACK PsN: JACKF
11 

retary signed that will establish a commission upon approval of the 

settlement to look at organizationally how we should go forward in 

terms of administering the trusts, to do a full audit of the function 

as we start fresh without having to look backwards, and instead 

looking forward. 

Thank you very much, Mr. Chairman. 

The CHAIRMAN. Mr. Hayes, thank you very much. 

Would you just for purposes of illustration go over again the 

paragraph in which you described the single parcel of land, I think, 

worth $20,000? Describe that again because it so aptly describes 

the dilemma that we have all inherited here. 

Mr. HAYES. Certainly. This was a tract identified in 2003. We 

can get you the specifics of exactly where it is, but it is a 40-acre 

tract. There are 505 individual owners for that tract, meaning we 

have to undertake an accounting of individual trusts for 505 owners for that 40 acres. That 40-acre parcel is producing $2,000 in income annually. So we have to take that $2,000 and divide it appropriately into individual accounts and follow that money. 

The 40-acre parcel is valued at $22,000. The administrative costs 

for the accounting that we have to do was estimated in 2003 by us 

at $42,800 a year, annually. 

The CHAIRMAN. Well, that pretty well—although I must say you 

are a pretty expensive accountant. 

[Laughter.] 

The CHAIRMAN. Five hundred accounts and $42,000. But I think 

it really well describes the dilemma here of this fractionated ownership, and I appreciate your doing that. 

Let me call on the Vice Chairman for comments or questions. 

Senator BARRASSO. A couple of questions, Mr. Chairman, if I 

may. 

First, Mr. Secretary, I know reaching this settlement was no 

easy matter, and there have been many attempts over the past 

number of years. I am going to submit some detailed questions, but 

based on what you know, two quick questions for you, Mr. Secretary. Based on what you know about the case and the issues that 

would be resolved by this settlement, is this settlement fair to the 

Indian account holders and the landowners? 

Mr. SALAZAR. The answer to that is yes. And at the end of the 

day, because of the litigation and its history, I can tell you that the 

plaintiffs and the United States did not come together under the 

leadership of Judge Robertson to get to this settlement if it hadn’t 

been a fair and reasonable compromise. So it is a fair and reasonable compromise that does reach that objective. 

Senator BARRASSO. And that is the second question. Is it a good 

settlement for the United States and the American taxpayer? 

Mr. SALAZAR. Absolutely. 

Senator BARRASSO. And if I could go to Mr. Perrelli, if you 

wouldn’t mind. As my background is a physician, I would like to 

ask about attorneys’ fees. 

[Laughter.] 

Senator BARRASSO. The settlement agreement provides that the 

amount to which plaintiffs are entitled for attorneys’ fees is, I believe, ‘‘within the discretion of the Court in accordance with conVerDate Nov 24 2008 09:51 Aug 11, 2010 Jkt 057482 PO 00000 Frm 00015 Fmt 6633 Sfmt 6601 S:\DOCS\57482.TXT JACK PsN: JACKF
12 

trolling law.’’ How much in attorneys’ fees do you expect the plaintiffs to request from the court? 

Mr. PERRELLI. Well, let me take a quick step back. As the Committee knows, this is a historic settlement, and ultimately we had 

to make a decision; even if we couldn’t ultimately come to agreement on attorneys’ fees, was this a settlement that was in the interests of the United States? And we decided that it was. 

I think we share your concern about attorneys’ fees, in particular 

in this case where every dollar of attorneys’ fees actually will come 

not from the United States, but every dollar of attorneys’ fees will 

actually come out from individual class members’ distribution, will 

come out of the $1.4 billion. 

We also had to balance, in considering this issue, the fact that 

if this case were litigated for another 3, 5, 10 years, at the end of 

that, we would likely be facing a substantial petition for attorneys’ 

fees in that context. And even though at that point we might well 

have very strong arguments against it, it was something we had 

to balance. 

We didn’t ultimately reach agreement on fees. There are a few 

things, a few agreements that I think are worth informing the 

Committee about. 

First of all, as I indicated, the funds do come out of the $1.4 billion, so there is no additional outlay by the U.S. Treasury. Second, 

the court will decide the ultimate fee award, based on existing law. 

The parties, however, also agreed that they would litigate within 

a range. That wouldn’t bind the court. It wouldn’t bind individual 

class members as to what arguments they could make regarding 

fees. But they would litigate in a range between $50 million and 

$99.9 million in attorneys’ fees. 

When you look at that in the overall context of the settlement, if you were to take that as a ratio of over $1.4 billion, if the court 

were to determine that were the appropriate fund to look at, you 

are looking at between 3.5 percent and 7 percent. 

Senator BARRASSO. So if the attorneys’ fees are awarded as a percentage of the final amount, that was what the percentage would 

be, in that range, if you stay between $50 million and $100 million. 

Mr. PERRELLI. If you use the $1.4 billion as the denominator. If you use the $3.4 billion, the numbers change. 

Mr. SALAZAR. If I may, Senator Barrasso, may I, Mr. Chairman, 

make a quick comment on that issue because I know it is central 

to your thinking? 

Having served as Attorney General of my State for six years and 

having watched what happened in other circumstances, including 

the tobacco litigation, this was a central issue of concern for us as 

we drove down to the final goal line on reaching this settlement. 

For those of you who know how contingency case litigation and costs are paid out, at $1.4 billion in the damages part of this case, 

one third of that would have been about $500 million. Okay? And 

so what we were able to do because of the very concern that I knew 

that Chairman Dorgan and the Members of this Committee would 

have, we were basically able to come about the bracketing of these 

amounts in what I think is a very reasonable amount. 

Senator BARRASSO. And then, Mr. Hayes, if I could ask you, 

could you explain to me how the Administration decided that $2 

13 

billion is the appropriate amount of money to spend on buying back 

fractionated land? And then maybe where most of that money is 

going to be spent? And then, specifically, if any of that is going to 

be used on the Wind River Indian Reservation in Wyoming? 

Mr. HAYES. Yes, Senator. A lot of work had been done by the 

prior Administration in connection with some of the work with this 

Committee in evaluating potential land consolidation programs on 

a grand scale. And we had the advantage of having estimates of 

land values broken down by parcels and fractionated interest numbers. 

In order to truly resolve this entire problem, we estimate it would cost $6 billion to $8 billion, frankly. But the largest problem 

are the highly fractionated shares, and as I mentioned in my brief 

comments before, we think that $2 billion has the potential to clear 

out as much as 80 percent of the number of interests overall held. 

And frankly, as you get into parcels that have fewer owners, 

where they are earning income, you don’t tend to have the fractionation problem because those owners are thinking about their future 

and their children’s futures, and so you don’t have that issue. 

In terms of how we are going to target within this, we are essentially going to have a rolling process that targets, first of all, those 

fractionated lands that have 20 or more interests. We will start 

with lands that do not have mineral interests because those mineral interests are harder to value, frankly. 

And within the 37,000 parcels of land that have more than 20 

owners, there are 20,000 parcels that don’t have mineral interests, 

that look like they are easier to value, and in fact we have already 

valued more than half of those. 

So there are a number of parcels throughout Indian Country that 

fall in this first tranche, including some in the Plains, and we 

would be happy to go over with you and your staff, Senator, the 

situation in terms of the Wind River tribes in particular. 

Senator BARRASSO. Thank you, I would appreciate that. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you very much. 

Senator Franken indicated he has to leave and has one question. 

With the help of my colleagues, I will call on him for one question, 

and then come back to our colleagues. 

STATEMENT OF HON. AL FRANKEN, 

U.S. SENATOR FROM MINNESOTA 

Senator FRANKEN. Thank you, Mr. Chairman, and I would like 

to thank my colleagues. 

What I am interested in is that for Indians to receive money in 

the settlement, I guess they would have to know about the settlement and whether they are entitled to it. So my only question really is what is the plan to let people know that they are entitled to 

part of this settlement? 

Mr. SALAZAR. There is an exact process that has been formulated, and I will have the Associate Attorney General respond to 

the process. 

Mr. PERRELLI. Certainly, Senator. 

There is a notice process that will include the Department of Interior, working with the plaintiffs and a contractor who does notice 

14 

professionally to, among other things, translate notice into appropriate languages. We will send notice to all the addresses that we 

have, so hundreds of thousands of pieces of mail, as well as publication notice and appropriate papers. 

I think we will also work with individual tribes to ensure publication on reservations, and I think a number of other steps as well. 

The CHAIRMAN. Senator Johnson? 

STATEMENT OF HON. TIM JOHNSON, 

U.S. SENATOR FROM SOUTH DAKOTA 

Senator JOHNSON. Welcome, Secretary Salazar. 

How many IIM account holders in South Dakota will be affected 

by this settlement? Do you have any idea, or could you get me that 

number? 

Mr. SALAZAR. Deputy Secretary Hayes? 

Senator JOHNSON. Yes? 

Mr. HAYES. We can get you that number, and will, Senator. 

There are over 300,000 total and a number are in South Dakota. 

And it is being handed to me right now: 19,811 individual accounts 

held in your State. 

Senator JOHNSON. In South Dakota, several of the tribes purchased land in the 1970s and 1980s using loans from the Department of Agriculture. Some of those tribes are so heavily impacted 

by this debt. Will these tribes be able to use the settlement money 

to pay down the debt on those loans, since they were used for land 

acquisition, including fractionated land? 

Mr. SALAZAR. I am not certain of that. Let me see if either David 

or Tom or Hilary have a response to that question. 

Mr. HAYES. I think, Senator, there is no restriction on how individual account holders getting their settlement money will use 

their money. They will have complete discretion to use it as they 

see fit. I assume that would include the ability to pay down loans 

that they may owe, but we would be happy to follow up and confirm that. 

Senator JOHNSON. Yes. 

Mr. Perrelli, this settlement covers individual claims. Are there 

remaining lawsuits filed by the tribes? Is so, how many? 

Mr. PERRELLI. There are approximately 99 cases brought by tribal governments against the United States raising similar types of 

claims. There are a small number of those that have been settled, 

and I think the Department of Interior and the Justice Department 

are very committed to working on trying to find resolution of those 

matters as well. 

Senator JOHNSON. I have no further questions. 

The CHAIRMAN. Thank you. 

Senator Murkowski? 

STATEMENT OF HON. LISA MURKOWSKI, 

U.S. SENATOR FROM ALASKA 

Senator MURKOWSKI. Thank you, Mr. Chairman. 

And nice to see you back in the Committee here, Mr. Secretary, 

and I appreciate your leadership on this settlement and the opportunity to ask a few questions. 

15 

The questions that I have this afternoon are probably more technical in nature, so I don’t know whether they are directed to you, 

Mr. Perrelli, or perhaps you, Mr. Hayes, or to Ms. Tompkins, but 

they are as the settlement may relate to Alaska Natives. 

The first one is regarding the settlement as it pertains to the land administration’s claim, and the minimum payment of $500 

per claimant, assuming that the settlement is approved. The question is whether every owner of an Alaska Native allotment will be 

eligible for these minimum payment amounts, assuming that they 

choose to not opt out of the class and are willing to forego their 

land administration claims relative to past conduct of the Federal 

Government. So will the Native allottees be eligible for these payments? 

Ms. TOMPKINS. Senator Murkowski, yes they will. There are class 

members who are Alaska Natives, and some of them do hold allotments, and so they will be eligible for payment under the trust administration portion of this settlement. 

Senator MURKOWSKI. Okay, that is good to hear. 

The second question, then, is similar to what Senator Johnson 

asked about the individual Indian money accounts. And Mr. Hayes, 

it looks like you must have the list there, and I would be curious 

to know how many Alaskans have individual Indian money accounts and whether or not there is any indication in terms of how 

much each might expect to receive if the settlement is approved. 

Mr. HAYES. Senator, I do have information about the number of 

accounts, and there are 5,365 individual accounts held by Alaska 

Natives. I don’t have the information about the funds, although 

they presumably will get the basic allocation, $500, and then there 

is a formula that applies depending upon the amount of transactions and essentially the money flow through those accounts with 

the account holders that are on land that is being more productive, 

being awarded more funds. 

Senator MURKOWSKI. Okay. Thank you. 

Another question involves the scholarship funds and whether or 

not Alaska Natives will be eligible to apply for these scholarship 

funds. And also, whether you think that there is going to be any 

particular blood quantum that will be applied as a form of eligibility cutoff. 

Mr. SALAZAR. Senator Murkowski, this is an important part of 

the settlement that creates an incentive for individual Indians to 

participate in the fractionation buy-back program. I am going to 

have Solicitor Tompkins report on exactly how that would work. 

Ms. TOMPKINS. Senator Murkowski, under current existing law, 

the Alaska Native communities are not eligible for buy-backs under 

the land consolidation program under current existing law. However, the scholarship fund, which will be a part of that program 

under the settlement agreement, will be administered by a nonprofit entity. And presumably that entity would provide scholarships to Alaska Natives, as well as other Native Americans. That 

is one of the criteria we have in the settlement agreement. 

Senator MURKOWSKI. I appreciate that answer. You mentioned 

that Alaska is not part of the Indian Land Consolidation Act and 

it doesn’t apply there. So am I correct in assuming that the Department of Interior will not be acquiring Native allotments within the 

16 

State for donation to tribe using the proceeds of the land consolidation program? 

Ms. TOMPKINS. That is correct. We are working within the current legal framework that exists. 

Senator MURKOWSKI. I appreciate that. Thank you for the responses. 

And again, Mr. Secretary, thank you for your leadership on this 

issue. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Senator Murkowski, thank you very much, and 

thanks for your work on these issues as well, along with Senator 

McCain and myself over a long period of time. 

Secretary Salazar, let me thank you and your team, and the Solicitor as well. Thank you for coming today to explain to us. Our 

Committee, of course, is the Committee of jurisdiction and we 

wanted to, prior to Congress taking action, have an opportunity to 

query you and those who were involved in the negotiations. We will 

hear as well from Ms. Elouise Cobell today, and we appreciate very 

much her being here. 

So do you have other things to say before you leave, Mr. Secretary? 

Mr. SALAZAR. If I may, Mr. Chairman, just in conclusion. Again, 

I want to thank you and the bipartisan leadership here in the U.S. 

Senate on this Committee who have worked so hard on this issue. 

It truly has been a herculean effort to get to where we are today, 

and it truly is a historic effort. 

I also want to thank President Obama for his support of this effort, and Senator Murkowski, who actually came to the White 

House Tribal Conference with the President a few weeks ago. 

The issues that we are facing for Alaska Natives and for Native 

Americans are huge and they are real. And all of you have shown 

a great amount of interest in helping this move forward and help 

us address those issues, so I want to thank you. 

And finally, I also want to thank Elouise Cobell because she 

raised issues that were important, which had been unresolved for 

a very long time, and has brought us to this point in history where 

we are in front of this Committee today presenting what we all believe is a fair and reasonable way forward. 

Thank you. 

The CHAIRMAN. Well, Mr. Secretary, thank you. Having met 

many, many times with Ms. Cobell, she has a backbone of steel, I 

can tell you, and we invited her to testify today as well. 

So let me thank you and your team, and we will excuse you and 

have Ms. Cobell come to the table. 

Good luck to you, Mr. Secretary. 

Ms. Cobell, Elouise Cobell, is the lead plaintiff in the Cobell v. 

Salazar class action. Ms. Cobell is from Browning, Montana. She 

is accompanied by Mr. Keith Harper, who is the Class Counsel and 

Partner, Kilpatrick Stockton, LLP, Washington, D.C. 

Ms. Cobell, thank you very much for being here today. It has 

been a long and difficult road, I know, and we are anxious to hear 

your perspective about the settlement that is the subject of this 

hearing. Your entire statement will be made a part of the permanent record, and you may summarize. You may proceed. 

17 

STATEMENT OF ELOUISE COBELL, LEAD PLAINTIFF, COBELL 

V. SALAZAR 

Ms. COBELL. Thank you, Chairman Dorgan. And once again, I 

am here representing the class of over 500,000 individual Indians 

as the lead plaintiff in this case initially entitled Cobell v. Babbitt, and now referred to as Cobell v. Salazar, you know, pending in the 

United States Court for the District of Columbia, presently being 

presided over by Judge James Robertson. 

Since inception more than 13 years ago, this Committee and this 

House Committee on Resources have taken keen interest in this 

litigation and key objectives reforming individual Indian trusts, ensuring a full accounting, and correcting and restating each individual’s account balances, and other trust assets. 

I have been here numerous times, and on each occasion I have 

emphasized my willingness to explore settlement of this case. Resolution takes two parties willing to come to the table to negotiate 

in good faith and attempt to reach what might be an equitable settlement that would set the foundation for improved trust management and accountability in the future. 

The President showed great leadership during the campaign 

when he committed to seeking 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 settlements before, I was not 

optimistic of these negotiations and that we would reach agreement. But we sat down in good faith with the Administration. The 

issues to discuss and resolve were gravely challenging, and I repeatedly felt we had reached an impasse. But both my team and 

the government continued on, knowing that resolution was the best 

thing for all individual Indian trust beneficiaries, and for a 

healthier foundation of trust relationships for the future. 

The settlement, from my perspective, is not perfect. But after 

months of discussion, I am here to testify that we have reached an 

agreement and that I support this agreement. It is time to look forward, not backward. We must never forget the past. The settlement can move us forward together as it represents the best resolution we can hope for under the circumstances and is a partial 

atonement for historical mismanagement of individual Indian 

trusts. 

Although we have reached an historical settlement totaling more than $3.4 billion, there is no doubt this is far less than the full 

amount to which each individual Indians are entitled. We could 

prolong our struggle, fight longer, and perhaps one day know down 

to the penny how much every individual Indian is owed. Perhaps 

we could even litigate long enough to increase the settlement 

amount. But we are compelled to settle now by the sobering reality 

that our class grows smaller each year, each month and every day 

as our elders and infirm class members die, forever preventing 

them from receiving which is theirs. 

We also face the uncomfortable unavoidable fact that a large 

number of individual Indian trust beneficiaries are among the most 

vulnerable people in this Country, existing in sheer poverty. 

Now that the Cobell case has brought heightened attention to 

this matter, I am optimistic that this settlement will lay the founVerDate Nov 24 2008 09:51 Aug 11, 2010 Jkt 057482 PO 00000 Frm 00021 Fmt 6633 Sfmt 6601 S:\DOCS\57482.TXT JACK PsN: JACKF
18 

dation for genuine and meaningful reform of the trust. I am hopeful that the commission that Secretary Salazar has announced with 

this settlement will ensure that additional critical reforms are 

made and that we set the underlying for the safe and sound management of our assets in the future. 

I know that Assistant Attorney General Perrelli has talked about 

the settlement, so I will skip that detail. But I am particularly 

pleased about the incentive program that is part of the land consolidation effort. This will create post-secondary academic and vocational scholarships for Indian youth. 

When Indian parents and grandparents talk to me about our litigation, they always commit to use any money recovered from this 

case to improve their children’s and their grandchildren’s lives. 

These funds can establish a great legacy for our Indian children 

and grandchildren, providing them the education necessary to 

break the cycle of poverty that has held too many Indians in grips 

for generations. 

I think the 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 the $60 million scholarship fund. 

Moreover, there will be a secretarial commission to recommend additional trust reforms. 

When I embarked on this settlement process, I was skeptical 

that this result could be achieved, but we were able to reach a resolution. I now ask Congress to swiftly enact the necessary implementing legislation so we can start on the challenges of distribution without further delay. Hundreds of thousands of individual Indians have waited patiently for far too long. It is time that they 

see the proceeds of their efforts. 

Thank you, Mr. Chairman. 

[The prepared statement of Ms. Cobell follows:] 

PREPARED STATEMENT OF ELOUISE COBELL, LEAD PLAINTIFF, Cobell v. Salazar 

Good afternoon, and thank you Chairman Dorgan, Ranking Member Barrasso, 

and members of the Committee. I am here today once more representing a class of 

over 500,000 individual Indians as the lead plaintiff in the case initially entitled 

Cobell v. Babbitt 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, this 

Committee and the House Committee on Resources have taken keen interest in this 

litigation and its key objectives—reforming the Individual Indian Trust (‘‘Trust’’), 

ensuring a full accounting, and correcting and restating each individual’s account 

balance and all other Trust assets. 

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 3,600 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. 

I have been before you numerous times, and, on each occasion, 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 

what might be 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. The President showed 

great leadership during the campaign when he committed to seeking 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. 

19 

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. Over 

the past few months 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 Hilary Tompkins were involved in the day-to-day 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 all 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. But after months of discussion, I am here to testify that we have 

reached agreement and that I 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 and, resolving past claims, is a partial atonement for the historical 

mismanagement of the Individual Indian Trust. Although we have reached an historical settlement totaling more than $3.4 billion 

dollars, 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, know—down to the penny—how much individual Indians are owed. Perhaps we could even litigate long enough to increase the settlement amount. But we 

are nevertheless compelled to settle now by the sobering reality that our class grows 

smaller each year, each month, and every day, as our elders and infirm class members die, 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 Settlement 

The settlement is rather straightforward. There shall be set aside $1.412 billion 

for the resolution of the accounting, trust administration and mismanagement 

claims. These funds will be distributed as follows. Each individual Indian trust beneficiary who has an account open on government systems as of October 25, 1994, 

will receive $1,000.00 as a payment in lieu of the government providing an historical accounting. The remainder of this settlement fund, less the cost of settlement 

implementation, shall be distributed pro rata, calculated on the transactional activity in a beneficiaries’ trust account over a designated period of time, with a baseline 

minimum payment of $500.00. Accordingly, the vast majority of beneficiaries will receive at least $1,500.00 from this settlement, and many will receive considerably 

more than that. 

In addition, the agreement addresses the longstanding challenge of the increasing 

fractionation of individual Indian lands. The Interior Department repeatedly has acknowledged that managing these small interests—many of low monetary value—is 

one of the problems causing the Trust’s mismanagement. The amount of $2 billion 

is set aside to purchase lands from willing sellers. This will provide additional funds 

to individual Indians and can establish a more stable foundation for prospective 

management. 

I am particularly pleased about the incentive program that is part of the land consolidation effort. This will create post-secondary academic and vocational scholarships for Indian youth. When Indian parents and grandparents talk to me about our 

litigation, they passionately explain that they would use the money we recover to 

improve their children’s and grandchildren’s lives. I am confident this will prove an 

important incentive for land consolidation. More importantly, these funds should establish a great legacy for our Indian children and grandchildren, providing them the 

education necessary to break the cycle of poverty that has held too many Indians 

in its grip for generations. 

I think 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 needed. And there is an agreeVerDate Nov 24 2008 09:51 Aug 11, 2010 Jkt 057482 PO 00000 Frm 00023 Fmt 6633 Sfmt 6621 S:\DOCS\57482.TXT JACK PsN: JACKF
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ment to perform an audit of the Trust. No audit has ever been done of this Trust. 

To heal the division between individual Indian trust beneficiaries and the government and to establish greater 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 all of the serious underlying problems 

plaguing this Trust. We know that reform 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 ensure that in the future individual Indian trust beneficiaries finally 

receive that which rightfully is theirs. 

Conclusion 

When I embarked on this settlement process, I was skeptical that this result could 

be achieved. But we were able to reach a resolution. 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. Time is of the essence. 

The CHAIRMAN. Ms. Cobell, thank you very much. 

And as I have indicated, you have been very patient, but very 

resolute throughout this. You and I have had a number of discussions, and you have always been particularly generous in being 

willing to sit down with anybody at any time and try to talk 

through and discuss this case. And I have always been appreciative 

of that. 

I want to ask a couple of questions. You talk about the incentive 

program and its ability to improve children’s and grandchildren’s 

lives. Give me a little better description of that. How do you see 

this incentive program investing in children? 

Ms. COBELL. Many of the individual Indians that we represent 

in this case are living in poverty. They don’t have any means to 

send their children to school. And I think that has been the driving 

force of my work on this case as the lead plaintiff is to better and 

improve the lives of our children. And it is the place that we need 

to start. 

So many times that I have been in meetings with elders and individual Indians, it is always for my children, if I can have this for 

my children, if I can better the lives for my grandchildren. And I 

am always under the impression that if we can get our young people educated, this will never happen again. We can never allow the 

United States Government to behave like this and treat individual 

Indians the way that they have treated individual Indians. And I 

feel that if educating our young people, this will be the opportunity, 

that we can hold people accountable. 

The CHAIRMAN. You are the lead plaintiff, but of course, there 

are many plaintiffs. Tell me about the reaction of the other plaintiffs in the class. I assume there are differences of opinion. How 

significant are those differences? 

Ms. COBELL. Well, I think out of every 10 people that I hear 

from, you know, maybe one that is negative. But they have a little 

confusion of what does this really mean? What does this mean to 

us? Does it mean our tribal trusts? 

So there is a lot of confusion that has to be, you know, described 

to them, that this is as a result of the Allotment Act or the Dawes 

Act. 

21 

Everybody has been ecstatic, let me tell you. At my home, I go 

into the grocery store and everybody runs and shakes my hand and 

thanks me for fighting for justice for them. Because, you know, 

$1,000 means a lot, and people don’t understand that I think 

maybe living in the D.C. area, you know, what is $1,000? Well, 

$1,000 will buy, you know, maybe two or three months groceries 

for your family out where I am from. And so, I think that the $1,000 means that maybe the government, for once in their lives, will pay up, will be honest to them; 

will actually, you know, have the ability to say, we did wrong and 

let’s move forward, and so here is a first payment. But under the 

distribution plan, many individuals will receive a lot more money. 

The CHAIRMAN. The historical accounting that the court would 

have required would be long, arduous and very, very expensive to 

do. And yet I understand why some would probably want that because there is evidence in the late 1800s and the early 1900s, there 

is evidence of Indians and tribes being completely bilked by representatives of the Interior who claimed that their land was producing no income, when in fact it was. And so there is such a 

shameful history here. 

And I guess the question I have is I have the greatest respect 

for Secretary Salazar. We served with him here in the United 

States Senate. He is an extraordinary man. And he has committed 

himself, I know, to try to reach a settlement. He has also committed this Interior Department to a future that is vastly different 

than the past. 

Tell me your feelings about viewing the Interior Department’s actions going forward. Do you feel like you have extracted sufficient 

protections here that we are not going to see 50 years from now 

another lead plaintiff come to a table and say, we were wronged? 

Ms. COBELL. Well, you know, I have to believe that they are 

going to correct this trust. I was very encouraged by the fact that 

the secretarial order was coming out that would establish a commission. And I worried about the fact that, you know, will that 

change if the Administration changes? How do we make sure that 

it continues on? 

And I think it is something that we can’t leave out of our sight, 

is that we will have to continue to watch and monitor and make 

sure that the commitments that have been made, and this Committee, I think, will have to continue to monitor, to make sure that 

we get trust reform. We can’t let this happen again. We can’t. 

And, you know, I don’t know, the sadness that I have, every single day that I go back to Black Butte is seeing another person die 

and another person die without their money. You know, we talked 

about fractionated heirship lands, and my feeling is that if these 

systems weren’t broken in 1887, you know, we would have been 

able to account for the different types of land that was being inherited by other people. 

You know, if it was done properly, but have broken systems and 

they don’t change overnight. And we have to make sure that the 

Secretary is held accountable on this commission. And I compliment the Secretary and the Administration for taking this headon because it is the first time that we have really seen this type 

of cooperation. 

22 

The CHAIRMAN. What is your understanding of the time of distribution of these funds, provided that Congress meets the end of 

the year deadline? 

Ms. COBELL. Well, my understanding if they met the deadline, 

and I am hoping that we are still able to do that. I am, you know, 

I am a little concerned about going back home and telling everybody again, well, sorry, we are going to be delayed again. You 

know, people just get tired of that. 

And so I think by the fall that there would be distribution that 

would, you know, that would take place, that we would be able to 

have proper notice and a fairness hearing, and there could actually 

be money distributed by the fall of 2010. 

The CHAIRMAN. Well, Ms. Cobell, I support the decision. I think 

it is a wise choice, probably not an easy choice, but nonetheless a 

wise one, and one that I think will provide substantial benefits to 

those who have been injured. 

My hope is, and I certainly commit as the Chairman of this Committee, to continue to hold oversight hearings to make sure that 

when we start fresh now and begin anew, that we not allow to happen in the future what happened in the past. 

And I think the fact that you and others in the class, you as the 

lead in this class, have brought action against the Interior Department was entirely appropriate. As you know, the courts have spoken in the publishing of a lot of material over some years now 

about what happened in the Interior Department, and it is a sad 

chapter. But it needn’t continue, and I think this suit and the subsequent settlement of the suit is an admonishment that things 

must change and will change. And as I said, I have great confidence in the Secretary and applaud him for the conclusion of 

these settlement negotiations. 

Well, I want to thank you for flying to Washington, D.C. to testify. As the Committee of jurisdiction, we wanted to have, even 

though it was on short notice, we wanted to have a hearing, a formal hearing with the Secretary here, and invited you to be present 

as well. And we will now do all that we can to see that the terms 

of the settlement are carried out by the Federal Government. 

Do you have additional comments, Ms. Cobell? 

Ms. COBELL. I just want to thank you, and I appreciate the fact 

that you will continue to have oversight hearings to make sure. 

And I just pray that you do everything in your power to make this 

legislation happen by the end of the year. And I will be available 

to do any way that we can to help. 

And I would like to ask maybe Keith Harper if he would like to 

have a closing statement. 

Mr. Harper. The only thing I can add, Senator, is that from the 

legal team, that we also thank the leadership of this Committee. 

The Committee has been a staunch supporter of this litigation and 

has urged the parties to see resolution. And we strongly believe 

that that has led the parties to reach this settlement. 

It was, again, across the table, very difficult, took months. But 

we are here and we do ask that you continue that leadership to get 

this legislation enacted for those beneficiaries out in Indian Country. 

Thank you. 

23 

The CHAIRMAN. When you say before the end of the year, it certainly appears to me we will be here until the end of the year. 

[Laughter.] 

The CHAIRMAN. Let me also note that former colleague, Elliott 

Levitas, former Member of the House of Representatives is here, I 

believe a part of the team that was involved. 

Elliott, it is nice to see you. Thank you very much for being here. 

This hearing is adjourned. 

[Whereupon, at 3:34 p.m., the Committee was adjourned.] 

(25) 

A P P E N D I X 

PREPARED STATEMENT OF EDDIE JACOBS, CREEK INDIAN INDIVIDUAL INDIAN TRUST

ACCOUNT HOLDER

Mr. Chairman and members of the Committee, I am a member of the present 

Cobell plaintiff class. I would also be a member of both proposed plantiff classes 

which this legislation would authorize the U.S. District Court for the District of Columbia to bind as a matter of law in settlement of the Cobell litigation. For several 

years I have sought to intervene in this litigation and have been opposed at every 

turn by the plaintiffs’ attorneys. In addition, I have been advised by representatives 

of defendants’ Special Trustee that they cannot address my claims directly with me 

because I have become a ‘‘represented party,’’ represented by plaintiffs’ counsel. I 

have been locked out of all deliberations and out of all consideration. And now I am 

advised that all my claims, including those that have never been part of this litigation, are to be resolved by this proposed ‘‘settlement,’’ which is manifestly unfair to 

me and to individual Indians in my situation. 

I urge the members of this Committee to reject those portions of the proposed legislation which would authorize settlement of matters that are not and never have 

been a part of the underlying litigation. This Committee’s long-standing interest in 

settlement of this litigation is well known, but never before has this Committee proposed to sell out claims that are not part of the litigation in order to settle those 

matters that are actually before the court. 

Class Members Have Been Assured They Will Be Paid Before Attorneys 

In addition, Senator McCain has stated in public hearings on an earlier settlement proposal that no settlement would be approved by this Committee that does 

not provide for actual payment to the Indians before payment of untold millions of 

dollars to the attorneys in this matter. Under this proposal, not only the attorneys 

but also the named plaintiffs would be paid scores, or perhaps hundreds, of millions 

of dollars before any other class member would receive a dime. 

Per Capita Payment Neither Fair nor Equitable 

The per capita payment proposed for the Historical Accounting Class will treat 

individuals who inherited minuscule shares of Indian trust estates as recently as 

September 2009 the same way as Indians like myself who have been entitled to 100 

percent of the revenue from my trust lands that have been significantly underpaid 

for many years. I have personally assisted other Indian trust landowners in collecting several thousands of dollars in partial payment of what they were owed for 

oil and gas production from their lands. By any standard of fairness these individuals should receive a greater payment than those whose interests can only be expressed by fractions with seven- or eight-digit denominators. A ‘‘Claims Administrator’’ should be permitted to make payments based on some reasonable estimate 

or evidence of loss and not on an across-the-board basis that will provide a huge 

windfall to some account holders while grossly underpaying those who have truly 

suffered significant losses through the years. 

Payments Should Take into Consideration Shares of Ownership Interests 

For owners of divided interests in trust land, the per capita payments will pay 

to an owner of a very small interest in a tract of land the same amount that is paid 

to the single owner of 75 percent or more of the very same tract. In my case, I am 

the owner of 100 percent of the land allotted to my father, and my payment will 

be the same as the payments to neighboring landowners whose ownership interests 

can only be expressed in numbers with seven or eight digits to the right of a decimal 

point. There is no fairness, equity, or otherwise sensible basis for such a settlement 

arrangement. My payment for losses should certainly reflect my 100 percent ownership interest in all the revenues generated and paid into the IIM system by my 100 

percent ownership interest. It is not enough to say that these losses are to be compensated by payments to the second class of payees this proposed settlement would 

26 

create. My losses for revenues generated in past years are indisputably included in 

the Historical Accounting Class that will be compensated in the initial round of per 

capita payments. My losses on 100 percent of the revenues generated by my land 

over many years cannot reasonably be compared to those suffered by someone who 

only inherited a small interest in an already divided account as recently as three 

months ago. 

Pro Rata Payments Based on Receipts, not on Losses 

Ms. Cobell has spoken eloquently throughout this litigation of her concern for 

those Indians like myself who have actually suffered losses as a result of the government’s failures to administer the Indian trust appropriately. This proposed settlement makes a mockery of those expressions. Under this proposal, those individuals 

who have already sold their land, some several years ago, would receive higher payments than those of us who have maintained our trust landholdings and have actually suffered the losses that Ms. Cobell claims to redress. Those of us who have been 

deprived of income we were entitled to receive would receive smaller payments for 

the very reason that we have been underpaid in the past. 

Proposed Land Consolidation Fund Benefits Only Attorneys, not Indians 

In an earlier hearing, Senator McCain asked Ms. Cobell to disclose the terms 

under which her attorneys would be compensated, and she agreed to provide that 

information for the record. I do not believe that information was ever provided to 

the Committee. Under this proposal, according to news releases, the proposed $2 billion Land Consolidation Fund is considered part of the settlement. In fact, no part 

of that money will be used to settle any loss that any Indian has ever suffered for 

anything. The only Indians who will receive any part of that money are those who 

agree to part with their birthrights in the future. On the other hand, if the attorneys are paid on any contingency fee basis that is calculated on a ‘‘settlement’’ that 

includes this Fund, the result will be that the initial $1.4 billion payment for Indians will be further reduced by taking the attorneys’ percentage of the Land Consolidation Fund out of that portion of the settlement designated as the Historic Accounting Settlement. In other words. if the attorney fees are calculated at only one 

percent (1.0 percent), the Land Consolidation Fund will generate another $20 million in attorney fees, which will have to be taken from the $1.43 billion intended 

to compensate Indians. If the attorney fees are even capped at ten per cent, the result will be to reduce the money available to pay the Indians by a staggering $200 

million which will go to the attorneys instead. At the very least, I urge this Committee to shed some light on this part of the settlement. The $2 billion Land Consolidation Fund should not be considered any part of a ‘‘settlement,’’ for purposes 

of reducing the amount available to pay the Indians. 

Cobell is not Afghanistan, nor Health Care; Time is Not of the Essence 

There are two only conceivable reasons for the urgency presented by this proposal. 

One is to prevent anyone from fully examining or understanding it The schedule 

presented by the settlement and this legislation makes a mockery of any pretense 

of consulting with class members, or even permitting the Congress to consider the 

consequences of its actions. The other conceivable reason is that the attorneys and 

named plaintiffs need relief. If the attorneys and the named plaintiffs are in desperate need of an immediate cash infusion, the Administration could arrange a 

bridge loan, or Congress could consider a private relief bill for them that would not 

involve selling out the very Indians that this settlement claims to benefit. 

Recommendation 

If the Committee is determined to act on this proposed settlement, common decency demands that Indians such as myself not be sold out just to appease the 

named plaintiffs who collectively have not shown losses amounting to a single, 

$1,000 per capita payment under this proposal, much less the estimated $15 million 

they will share in incentive payments. If the Congress is determined to act, then 

I respectfully recommend that the Claims Administrator should be authorized to review the documents and actual claims of individuals in the second-tier (Trust Administration) class which will be created by this settlement, and to make settlement 

payments based on some evidence of actual claims and actual losses rather than 

just on the amount that has gone through the accounts. Otherwise, those who have 

been the most mistreated in the past will be the most mistreated and least compensated in the settlement. 

Thank you for this opportunity to present my views, and I am willing to work 

with the Committee in any way possible to make any settlement of this litigation 

truly honorable. 

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