How Native Americans Made $3.4 Billion off a Giant U.S. Accounting Oversight

Written By Staff

After 16 years of contentious litigation, 350,000 Native Americans can finally expect a check in the mail from the United States government. In the landmark case of Cobell vs. Salazar, the largest and most complicated class action lawsuit against the United States, Native Americans claimed the government mismanaged federal land held in trust by the Departments of Interior and Treasury. Native Americans in the case also claimed that they were not paid royalties made off the land by the government for more than a century. While the $3.4 billion settlement awarded to the Native Americans is the first step toward fixing a troubled past between tribes and government, many tribal members feel this decision amounts to just a fraction of what they are actually owed.

The Charge

In 1887, in an effort to assimilate Native Americans into government-run society, land was divided up for Native Americans to use for farming and grazing purposes. Possibly intended as an act of goodwill, the decision known as the Dawes Act undermined Native American culture in many ways, including taking away much of their land use and hunting rights. One provision of the Dawes Act was the establishment of a trust to collect and distribute funds made off of government lease of Native American land for uses including farming, grazing, timber-cutting and mining. Native Americans in the class action contend that billions of dollars are owed to them since the establishment of the Dawes Act. Unfortunately, due to centuries of mismanaged land trusts, inadequate bookkeeping, siphoned budgets and even theft, the exact sum is unknown.

The Plaintiffs

Elouise Cobell was the treasurer for the Blackfeet Tribe, founder of Blackfeet National Bank, and an activist for environmental and agricultural issues. She originally brought the case against the government in 1996 after uncovering inconsistencies in the management of land trust funds and the distribution of tribal dividends. Tired of watching tribal members suffer poor health and poverty while their government royalty checks went unpaid, Cobell decided to take action. Her efforts led to the creation of one of the largest class action lawsuits in U.S. history. Cobell and her attorneys Dennis Gingold, Thaddeus Holt, Keith Harper and John Echohawk demanded that tribe members be remunerated for the estimated $100 billion the U.S. government owed.

The Verdict

During the course of litigation, the lawsuit went before a federal appeals court 10 times. On December 8, 2009 Congress finally approved a settlement in which the government would pay $1.4 billion to individual beneficiaries and $2 billion to buy pieces “fractionalized” land interests at fair market prices. Fractionalized land interests occur when Native Americans die and their land interests are divided up equally among their heirs. Over the course of multiple generations, this has resulted in pieces of property valued at a few cents. This part of the settlement will allow Native Americans to cull together larger, more valuable parcels of land to divide how they see fit. In an interview with National Public Radio (NPR) in 2011, it was clear that Cobell did not think the trial would come to a conclusion in her lifetime and saw the settlement as merely a resolution to the drawn out litigation. She added that she did not feel that Native Americans were awarded the amount they deserved. “We are compelled to settle by the sobering realization that our class grows smaller each day as our elders die and are forever prevented from receiving just compensation,” she said. In 2011, Corbell passed away in Great Falls, Montana after battling cancer.

Strengthening Relations Between Nations

Reservation life remains difficult even today. As another harsh winter closes in on impoverished Native Americans residing on government-allocated land, the initial $1,000 check they expect to receive will barely cover their basic needs. "We've had 200-plus years of federal laws, statutes and regulations governing many aspects of how Indians govern their own lives," Donald Laverdure, assisting secretary with the Bureau of Indian Affairs, told NPR in an interview. Laverdure applauded the reforms to come out of the settlement but also acknowledged the long road ahead. There is no sum of money that could make up for the history of abuse and manipulation of Native Americans by the government, but the settlement of Corbell vs. Salazar marks the first step in attesting to the past and strengthening the future. “With the settlement now final, we can put years of discord behind us and start a new chapter in our nation-to-nation relationship,” said Interior Secretary Ken Salazar in a press release.

Related Links

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