20. American Indians Sue for Resources; Compensation Provided to Others

by Project Censored
Published: Updated:

Sources: LiP, Winter 2004, Title: “Trust Us, We’re the Government: How to Make $137 Billion of Indian Money Disappear,”Author: Brian Awehali; News from Indian Country, March 8, 2004, Title: “Despite Wealth of Resources, Many Tribes Still Live in Poverty,” Author: Angie Wagner; Mainstream Media Coverage: New York Times, April 7, 2004, and the Washington Post, March 14, 2004

Community Evaluator: Keith Pike MA
Student Researcher: Kiel Eorio

Native Americans, after more than two centuries, are still being cheated by the government and U.S. companies. Oil companies operate at Montezuma Creek in Utah. Montezuma Creek lies on a Navajo Reservation. The companies have under-compensated the Native Americans for the right to their natural resources since the 1950s. District court-appointed invesigator Alan Balaran discovered that non-Native Americans in the same area received royalties that amounted to more than 20 times the amount of the Native Americans on the reservation.

Native American reservations are filled with natural resources, but the government has routinely allowed energy companies to short-change the tribes. In Balaran’s findings it shows that the government owes Native Americans as much as $137.5 billion in back royalties. The issue of the government keeping funds from Native Americans dates back to the Dawes Act of 1887. The Dawes act created a trust fund for Native Americans over the years; since then the government has grossly mismanaged revenues from oil, timber and mineral leases on tribal land.

According to Elouise Cobell, a member of the Blackfeet tribe, many Native Americans depend on these royalty checks for the bare necessities. The Navajo Nation has more than 140,000 members and is the country’s largest tribe. It is also one of the poorest. More than 40 percent of its people live in poverty while the median household annual income is $20,000, less than half of the national median. Mary Johnson, a Navajo tribe member, who lives in a one bedroom stone house off the main highway, once received a royalty check for $5.30. These required checks are commonly paid out in sporadic intervals.

Johnson Martinez, a 68-year-old Navajo, lives out of a trailer that is pulled by his pickup truck. His “home” is just yards away from where gas pipelines sit on the family land. He has no running water and sometimes no electricity. There are even times when he doesn’t have any food. At night he builds a fire to keep him and his dogs warm. Sometimes he has received checks for only a few cents.

In 1994, Congress passed the American Indian Trust Reform Act. This required the Interior Department to account for all the money in the trust fund and clean up the accounting process. The Individual Indian Monies case, also known as Cobell V. Norton, is the largest class action suit ever filed against the federal government. Filed in 1996, Elouise Cobell is at the center of the suit that involves more than 100 years of revenues generated by government leases on Native American land held “in trust” for mining as well as oil and gas exploration. For years she has tried to get an accurate accounting of funds held in trust by the U.S. Government for individual Native American land leased by the federal government for natural resource stripping. The defendant in the Cobell V. Norton case is Interior Department Secretary Gale Norton. She has been held in contempt by Federal Judge Royce C. Lamberth for ignoring his orders to account for the fund. Lamberth stated that he had never seen greater government incompetence than the Interior Department had shown in administrating the money and representing itself in court.

In early of 2001, Alan Balaran, the investigator in the case, made a surprise visit to the Government’s warehouse. There he found papers from a shredder, which had records concerning the money paid out of the trust fund. The Bureau of Indian Affairs, which resides under the Interior Department, stated that similar documents were being shredded every day.

In March of 2004, Lamberth ordered a shutdown for the Interior Department’s internet connections due to security holes that could have allowed hackers to access hundreds of millions of dollars in royalties from Native American lands managed by the agency, according to Balaran’s findings. This was the third internet shutdown in three years. This particular shutdown was ordered after the Interior Department refused to sign sworn certificates that it had fixed major security flaws. This is the same system that processes hundreds of millions of dollars annually for Native Americans.

In April of 2004, Alan Balaran resigned under pressure as the investigator in the case. He states that the Bush Administration has been pursuing his refusal to silence criticisms of the Interior Department’s handling of individual Native American accounts. Balaran’s findings show that the Bush Administration knowingly allowed energy companies to continue to pay Native Americans far less than non-Native Americans for natural resources. Judge Royce C. Lamberth has ordered the government to complete a historic accounting for all funds in the case by January 6, 2008.


Rocky Mountain News, August 21, 2003 “Indians Underpaid for Land Leases, Official Charges; Appraisal Program Under Norton Targeted” by M.E. Sprengelmeyer.

Bismarck Tribune, April 7, 2004, “Investigator: Interior Favored Companies” by Robert Gehrke.

PR Newswire, February 24, 2005 “Cobell Litigation Team: U.S. District Court Reissues Structural Injunction in Cobell V. Norton Indian Trust Case-Full Accounting to Be Complete by January 6, 2008.”

Update by Brian Awehali: The Cobell v. Norton case is important because the government is colossally and obviously wrong. This is evident in light of the success of Eloise Cobell’s team in successive court victories. The sheer scope of the case, its possible precedent-setting resolution, and the ways in which it highlights the current limitations of Native Americans’ dependent-yet-sovereign status, all provide opportunities for real reform and long-term re-examination of the terms of U.S.-to-Native, government-to-government relations.

Media coverage of this story has largely suffered from two main challenges. The first challenge has been the massive bureaucratic complexities of the case, which I believe insulated it from quite a lot of daily news coverage. The second, and subtler, challenge is the average American’s lack of understanding of Native sovereignty. Without a clear understanding of this, Americans literally have no meaningful framework to fit the story into, and it simply disappears.

Ongoing security flaws in the Department of the Interior’s trust accounting systems have continued for a ridiculously long time. Despite failure after failure to amend security flaws that allow for manipulation of records, and in spite of repeated documented instances of bureaucratic ill will resulting in massive theft and “loss” from trust accounts, the Department of the Interior is still in charge of them. Another investigative story on SmartMoney.com (December 3, 2004) reported that “officials in the Bush Administration had detailed knowledge of fraudulent practices that allowed energy companies to cheat impoverished Native Americans out of vast sums over dozens of years.”

Indian Country Today also reported that behind the scenes negotiations might already be happening between the White House and Congress-but not with the plaintiffs in the case. The piece also warns of the possibility of another “midnight rider” on an appropriations bill that would effectively defer justice for yet another year.

Because recent developments in this case have centered mostly around court motions and abstruse legal machinations, there hasn’t been much hard “news” for the mainstream press to grab onto. Without new and breaking “hooks,” I think the perception is that this is an old story, rather than the very urgent and pressing one that it is. I also believe the government’s strategy-stall, obfuscate and deceive-is a deliberate attempt to keep media attention largely surface and scattershot.

The best places to go for information about the case are the following sites: http://www.indiantrust.com, Indian Country Today: http://www.indiancountry.com, The Friends Committee on National Legislation:http://www.fcnl.org/issues/item.php?item_id=1266&issue_id=112