Opinion ID: 185354
Heading Depth: 2
Heading Rank: 2

Heading: Federal IIM Trust Responsibilities

Text: 11 Because the United States holds IIM lands in trust for individual Indian beneficiaries, it assumes the fiduciary obligations of a trustee.  '[W]here the Federal Government takes on or has control or supervision over tribal monies or properties, the fiduciary relationship normally exists with respect to such monies or properties (unless Congress has provided otherwise) even though nothing is said expressly in the authorizing or underlying statute (or other fundamental document) about a trust fund, or a trust or fiduciary connection.'  United States v. Mitchell (Mitchell II), 463 U.S. 206, 225 (1983) (quoting Navajo Tribe of Indians v. United States, 224 Ct. Cl. 171, 183 (1980)). As a result of allotment, individual Indians became beneficiaries of the trust lands, but lost the right to sell, lease, or burden the property without the federal government's approval. The federal government also probates estates related to Indian trust lands and receives and distributes income from the lease of allotted lands. Income generated from the trust lands is to be paid to the individual beneficiaries. 12 Under current law, the Secretary of the Interior and the Secretary of the Treasury are the designated trustee delegates for the IIM trust. Each Secretary, or his designates, has specific fiduciary responsibilities that must be fulfilled lest the United States breach its fiduciary obligations. Several governmental agencies have specific trust obligations. These include, among others, BIA, Office of Trust Funds Management (OTFM), and Office of the Special Trustee (OST). (Their responsibilities are extensively detailed in the decision below. See Cobell V, 91 F. Supp. 2d at 9-12.) 13 BIA is responsible for trust land management, including the approval of leases and land transfers, and income collection. See id. at 9. As noted above, BIA is also required to contract with qualifying tribes for the management of IIM accounts. OTFM, with the assistance of the Treasury Department, deposits IIM land revenues, maintains the individual IIM accounts, and ensures that money is distributed to IIM account holders or special deposit accounts where money cannot be distributed to the individual account holder. OST, created in 1994 by the Indian Trust Fund Management Reform Act, oversees IIM trust reform efforts. 25 U.S.C. S S 4042-43. 14 While the Interior Department is responsible for executing most of the federal government's trust duties, the Treasury Department has substantial trust responsibilities as well. In particular, Treasury holds and invests IIM funds at the Interior Department's direction and provides accounting and financial management services. See Cobell V, 91 F. Supp. 2d at 11. The Treasury Department maintains only a single IIM account for all IIM funds, rather than individuated accounts for each individual IIM beneficiary, leaving the maintenance of individualized accounting records to OTFM. OTFM relies upon the Treasury Department's accounting records to reconcile its own IIM records. Of note, when OTFM issues a check to an IIM trust beneficiary, the amount is deducted from the relevant fund, even though the money remains in the Treasury's general account. Thus, the IIM beneficiary loses any interest that would be accrued between issuance and cashing of the check. The district court found that while this time lapse may be short in the private sector, it can be much longer in the IIM trust context because OTFM often has incorrect addresses for the recipients. Id. at 12. 15 The federal government does not know the precise number of IIM trust accounts that it is to administer and protect. At present, the Interior Department's system contains over 300,000 accounts covering an estimated 11 million acres, but the Department is unsure whether this is the proper number of accounts. See id. at 10. 1 Plaintiffs claim that the actual number of accounts is far higher, exceeding 500,000 trust accounts. See id. 16 Not only does the Interior Department not know the proper number of accounts, it does not know the proper balances for each IIM account, nor does Interior have sufficient records to determine the value of IIM accounts. As the district court found, [a]lthough the United States freely gives out 'balances' to plaintiffs, it admits that currently these balances cannot be supported by adequate transactional documentation. Id. Current account reconciliation procedures are insufficient to ensure that existing account records, reported account balances, or payments to IIM beneficiaries are accurate. As the Interior Secretary testified at trial, the Department is presently unable to render an accounting for a majority of the IIM trust beneficiaries. Trial Transcript at 3762. As a result, the government regularly issues payments to trust beneficiaries in erroneous amounts--from unreconciled accounts--some of which are known to have incorrect balances. Cobell V, 91 F. Supp. 2d at 6. Thus, the district court concluded, and the government does not deny, that [i]t is entirely possible that tens of thousands of IIM trust beneficiaries should be receiving different amounts of money--their own money--than they do today. Perhaps not. But no one can say.... Id. 17