[as published in the Seattle Post Intelligencer on February 23, 1996]
The Bureau of Indian Affairs can't account for $2.4 billion, or one
of every seven dollars that flowed through tribal trust funds in the last
20 years, auditors say.
The money isn't necessarily missing, but documents cannot be found
to show where it came from or where it was paid, officials say. Tribes are
likely to ask Congress to restore some of it.
The bureau has been under criticism for years for alleged
mismanagement of the trust funds, but the extent of the problem becomes
clearer with completion of a five-year audit by the Arthur Anderson
accounting firm.
Congress ordered the audit to figure out how much money should be
n the 2,000 tribal accounts, set up over the years to handle receipts of
tribal income from timber, minerals, water and land claims.
"What we've got is a mess. As far as I can tell it's an
unprecedented mess." said Dan Press, attorney for an intertribal group that
monitors the funds.
The funds total about $2 billion. The largest single account,
valued at $400 million comprises a court's award to the Sioux nation for
its loss of South Dakota's Black Hills to the United States.
Accountants studied $17.7 billion in transactions between 1973 and
1992 and found documentation for $15.3 billion, a bureau summary of the
findings says.
The problem is akin to a bank being unable to provide canceled
checks or deposit receipts to back up its account statements. The funds
have been put under a special trustee independent of the Indian bureau.
Over the years, dozens of audits by the General Accounting Office
and the Interior Department's inspector general have criticized the
bureau's management of the funds. Problems cited include unreliable
accounting systems and lack of security controls and competent personnel.
"They can't confirm that all the money that should have been collected was
actually collected." Press said. "They can't prove that money that was
collected was deposited. They can't prove that the money that was deposited
was invested properly."
"If this were a private bank trustee . . . they'd be in jail right
now."
Interior Secretary Bruce Babbitt has until May 31 to make
recommendations to Congress for handling claims by tribes whose accounts
can't be reconciled.
"That's going to be something Congress is going to have to come to
grips with," said Joe Christie, the official in charge of the bureau's
attempt to reconcile the accounts.
Congress set aside $3 million to reimburse tribes that are missing
money. The independent special trustee, Paul Homen, said he expects the
claims to exceed that.
"All of the tribes are going to be putting in claims," said Elouise
Cobell, comptroller for the Blackfeet tribe in Montana. The bureau values
the Blackfeet accounts at $8 million; the tribe says that's too low.
Many tribes probably will withdraw their funds from government
control under a 1994 law that allows them to do so, Cobell said.
There are also 300,000 accounts, totaling $400 million, belonging to
individual Indians. No attempt was made to reconcile them, because the cost
doing the work is estimated at up to $250 million.