Truth and Consequences on the Reservation

In Blackfoot country, passing down stories from one generation to the next is an intricate part of tribal culture. The people who live here at the foot of the Montana Rockies pride themselves on the accuracy of this oral tradition. In the spring, when the geese have returned and the first rumble of thunder has rolled over the land, the Blackfeet begin a series of sacred ceremonies in which the stories they tell must never be embroidered, lest they be colored over time. Truth, they say, is the core of their history.

On the days when Elouise Cobell drives to the dilapidated Blackfoot reservation town of Browning, she passes a weathered historical marker that tells part of a story. The wooden sign marks the site of the U.S. government’s first Indian office for the Blackfoot Nation. The marker also describes the devastating winter of 1884, when more than 500 Blackfeet died of starvation on the treeless, wind-swept plains where the government buildings once stood.

That account bears little resemblance to the Indian version of this grim tale, which has it that the U.S. Indian agent, John Young, hoarded food that would have saved the Blackfeet. The Indians who perished were buried in a mass grave atop what the Blackfeet reverently call Ghost Ridge. Cobell can see the ridge, too, each time she makes the 30-mile trip into Browning from her modest ranch south of town.

Cobell is a Blackfoot who for nearly three decades has overseen the financial fortunes of

her people, once a feared warrior tribe that roamed the plains before starvation, disease and

the slaughter of the buffalo reduced them to the humbling status of government wards. Now 56, this short, slightly plump woman has lived on the reservation most of her life.

In Browning, she spends much of her time schooling Native Americans in the basics of starting their own businesses. On the ranch, she shares chores with her husband, Alvin, including spreading hay for cattle in winter when the ground is blanketed with snow. Last spring, during a bitter cold snap, she saved two newborn calves from freezing by warming them in the shower. Then she took a blow dryer to them for good measure.

As she goes about this isolated existence just a few miles south of the Canadian border, Cobell also lives a second life--one arising from another story handed down by generations of Blackfeet that also is at odds with official versions of the truth. The tale is still being written, with Cobell emerging as the patient warrior whose labors over the last quarter century have brought the U.S. Interior Department to its knees. She has poised her tribe, along with countless other Native Americans, to reap billions of dollars in payments owed them by the government.

cobell’s office is on the top floor of a tired two-story building painted a sickly shade of drab olive. Many other buildings in town are worse, including a number of boarded-up trailers on cluttered, overgrown lots. Sidewalks and paved roads are a recent addition to Browning. Unemployment hovers at around 70% in winter, when construction jobs dry up and the Blackfeet hunker down against the cold. In winter, dirty snow adds to the forlorn scene, and it is well into May before the wildflowers bloom and the plains turn green. On most days, a strong wind howls through town.

But its backdrop is the soaring, snow-capped Rockies at the gateway to Glacier National Park. It is here that Cobell first began sorting out the mystery of the missing money.

One of eight children in a home with no electricity, running water or telephone, she grew up listening to stories of Baker’s Massacre, in which American soldiers slaughtered 200 Blackfeet, most of them women and children, after ambushing them on the banks of Montana’s Marias River. She heard other tales about how Indian children were sent off to distant boarding schools for years at a time, where speaking their native Piegans was cause for punishment. And, too, she heard stories of government checks. She heard her parents wonder why those payments never made sense.

The talk of the checks in Cobell’s house was similar to those in thousands of other homes on reservations throughout the American West. The checks arrived sporadically and they were for amounts no one understood. They knew the money was payment for land allotted to them but leased out by the government to timber, mineral or ranching interests, but they had no luck persuading the Interior Department or its Bureau of Indian Affairs to explain or account for the amounts. This haphazard way of doing business is called the Indian trust system. It is at the heart of the story.

In 1887, Congress passed a law intended to “civilize” the Indians and dilute the tribal structure. Known as the Dawes Act, each Indian head of household was given as much as 320 acres. But because the government didn’t believe Indians capable of managing their own affairs, they were barred from actual ownership. The land was put in trusts, with the U.S. government as the overseer.

The law also contained a loophole allowing the sale of “surplus” land. Vast tracts were sold to white settlers under that provision. By 1932, Indians had sold off 90 million acres--about 65% of their holdings. The Interior Department supervised the leasing of the remaining Indian land. Theoretically, the government paid all leasing fees into Indian accounts.

But the accounting system was sloppy and unworkable from the start and only got worse as time went on. Checks would go unclaimed because people moved away, leaving no forwarding address. In other cases, the land would be divided among heirs, further complicating the bookkeeping. Also, thousands of records were lost or destroyed, making a fair accounting virtually impossible.

The Indians had only limited knowledge of these government inner workings. Certainly Cobell did not. All she knew were the stories. She tucked them away as part of the Blackfoot lore, never imagining they would consume much of her life.

Though her family had limited resources, Cobell’s parents stressed the value of education. When she was 4, Cobell’s father took her with him when he visited the small reservation school. She found a desk and refused to leave until her father promised she could return the following day to begin her formal education. After high school, she headed for Great Falls Commercial College and then spent two years at Montana State University in Bozeman.

College was cut short when Cobell returned to the reservation to care for her dying mother. Then came her decision in 1968 to leave the reservation behind her, to move to Seattle and begin a career. There she met Alvin, also a Blackfoot, who made his living fishing the waters off the Alaska coast. She got a job in the accounting department of a Seattle television station. They had a son, Turk. Life was promising and the pay was good. She thought she was through with reservation life forever.

Funny how things can change, though, how a chance incident can set a new course for a life or, in this case, an entire people. On a return visit to Montana in 1970, Alvin realized he wanted to come home. He had grown up hunting and fishing in the mountains, and the lure of the majestic peaks pulled him back. So the three Cobells moved back to her family’s ranch. Six years after they returned, Elouise Cobell was offered the job as treasurer of the Blackfoot Nation. She was 30 years old.

It was like being handed a migraine. The slipshod tribal accounting system was, as she puts it, “in total chaos.” She began slogging through the books, such as they were, finding more questions than answers. Why, for instance, was the Blackfoot tribal trust drawing negative interest? How could this be when, by law, trust money must be invested by the government in the safest securities? Why was she seeing money leaving the tribal account when she was the only one authorized to write the checks? When she raised the questions with the local BIA, from which much of the money flowed, the withering response was that she should learn to read a financial statement.

Humiliated, Cobell plodded on. When financial discrepancies arose--and that was often--she would write to the Interior Department. “I’d write and write and write,” she says. “One guy hadn’t paid in a year” for land he used. “He’d gotten away with all the oil on a lease for free.”

But it wasn’t as if the trusts ran her life. The ranch and the treasurer’s work added up to more than a full-time job, and as Turk grew older, Cobell tried to be on hand to watch her son compete for his high school’s football, basketball and track teams. Turk Cobell recalls his mother driving hundreds of miles to watch him play. “I think I can count the number of events she missed on one hand,” says Turk, now a manager at Sunset Station Hotel and Casino in Henderson, Nev.

Though it took years to accomplish, Cobell began making headway with the Blackfoot tribal finances. In 1987, she was the prime mover in founding the first tribal-owned bank in the nation, opening the door for her people to finance their own businesses. Browning in those days was a boarded-up disaster--far worse than today. Its residents had almost no hope of making a living on their own. These days, although Browning is hardly thriving, Cobell can point to various businesses, from the Glacier Restaurant to the Browning Video store to the Dollar Store, that are Indian-owned. It’s a start.

On the larger issue of accounting for the individual lease money, however, Cobell was making almost no progress. Washington virtually ignored her, even as her people kept asking for help. Josephine Wild Gun, for instance, asked why she was receiving less than $1,000 a year even though 7,000 acres of family land were being leased out for grazing, oil, minerals and timber. Cobell had no answer.

After more than a decade of frustration, she finally found a sympathetic ear. David Matheson, deputy commissioner for Indian affairs under the first Bush administration, was a member of Idaho’s Coeur d’Alene tribe. Unlike other officials she had approached over the years, Matheson understood. He remembered how his own parents and grandparents on the reservation believed they had been ripped off in timber sales and leased land. He also remembered how they had been warned by the BIA not to make trouble.

“The BIA had a very prominent role in generations gone by in taking resources from the tribes and giving them to other people,” Matheson says. “But then a generation would pass and the problems never got resolved. We all heard it over and over again.”

While Cobell had a willing ear in Matheson, he did not have much time left at the BIA. George Bush was ousted by Bill Clinton just a year later and Matheson was out of a job. But before he left office, he arranged for Cobell to meet in Washington with a group of high-ranking government officials and banking experts. It was a fortunate stroke, for among those present was prominent Washington, D.C., banking lawyer Dennis Gingold, known for his slashing take-no-prisoners style, who was there as a favor to a friend. Gingold says he went to the session thinking he was to meet with East Indians. “From my experience, American Indians were not involved in banking,” he recalls. “I was looking for a bunch of people with turbans.”

What he heard that day from Cobell and others left him astonished. “I had never known this type of problem existed,” says the tough-talking Seton Hall law graduate. The status of the Indian trusts were “a disaster,” he says. “Regulators would never allow this to go on at a bank. A bank would be shut down.”

gingold recommended filing a lawsuit against the government. but Cobell and others were reluctant. The cost would be enormous. Besides, Matheson’s ouster aside, the election of Clinton was cause for hope, Cobell thought. She assumed the new president’s administration would be sympathetic.

Congress also was getting involved. In 1992, the House Committee on Government Operations issued a scathing report titled “Misplaced Trust: The Bureau of Indian Affairs’ Mismanagement of the Indian Trust Fund.” William Clinger, a former Republican congressman from Pennsylvania and one of the authors of the report, says the intractability of the BIA was nothing short of stunning.

“Every six months or so we’d haul them in again and then nothing ever happened,” he recalls. “They had the chutzpah to say ‘Well, we’re working on it.’ There was total incompetence in the BIA. They didn’t have the wherewithal to deal with this sort of thing.”

Two years after the report, Congress passed the landmark Indian Trust Fund Management Reform Act, appointing a trustee to oversee straightening out the financial mess. That trustee was veteran banker Paul Homan, known for his ability to clean up troubled financial institutions. He had been the CEO of four problem banks and the executive vice president of another before coming to Washington as the president and CEO of Riggs Bank.

Homan soon discovered the job was a nightmare. Records were in such disarray that it was impossible to tell how many people were due money. Of the 238,000 individual trusts Homan’s crew located, 50,000 had no addresses, which meant the money never left the Treasury. Some 16,000 accounts had no documents at all, and 118,000 were missing crucial papers.

Given those sorry conditions, it was reasonable to assume funds were skimmed from the trusts over the years, Homan says. “It’s akin to leaving the vault door open,” he says. “You leave it open and sooner or later it’s going to tempt somebody. If you don’t have records and you don’t have management, you don’t have much.” Homan later resigned his post, saying Interior Secretary Bruce Babbitt refused to give him the kind of support he needed for reforms.

Still uncertain about filing a lawsuit, Cobell bumped into Atty. Gen. Janet Reno at a conference. After a brief conversation, Cobell says Reno promised to take a personal interest in the trust issue and invited her to Washington, D.C.

As Cobell planned her trip, Gingold, long experienced in the ways of the capital, tried to warn her that officials can mean well, but getting results is another matter. “I told her not to expect anything,” Gingold recalls.

He was right. When Cobell arrived in Washington, Reno handed the case to a deputy without so much as a brief audience.

“It was the straw that broke the camel’s back,” Cobell says.

massive lawsuits are massively expensive, and this was one of the largest class-action suits ever filed. To press this one would cost millions of dollars for lawyers and court fees and expenses and, just as important, for an army of accountants to try to sort out 100 years of sloppiness. It was money the Blackfeet simply did not have. It was also a step some Native Americans opposed, largely because they believe the BIA is a friend as well as a link between two nations.

But Cobell wasn’t about to stop. If a lawsuit would be expensive, she would become a rainmaker. She knew that a century of injustice is a powerful appeal. She also knew that her years of arguing with the BIA, not to mention her banking experience, had brought her into contact with an array of organizations, including the Otto Bremer Foundation of St. Paul, Minn. The regional foundation’s goal is to promote social justice in four northern states--Minnesota, Wisconsin, North Dakota and Montana. So she started there, with a director who already knew of her odyssey. The foundation responded with a $75,000 grant and a $600,000 loan.

And so it began. On June 10, 1996, the Boulder-based Native American Rights Fund filed a class-action lawsuit against the Interior and Treasury departments, with Cobell as the lead plaintiff and Gingold as the lead attorney. The suit, filed on behalf of half a million Native Americans, accused the two agencies of failing to fulfill their fiduciary duties to manage the trust funds.

Then Cobell caught a huge break. In 1997, the John D. MacArthur Foundation gave her a $300,000 “genius award”--quite out of the blue. Cobell had never heard of the foundation. Surprised but elated at the windfall, she threw most of the money into the legal defense kitty. She didn’t know that in Santa Fe, N.M., one J. Patrick Lannan Jr., whose Lannan Foundation has a keen interest in Native American causes, was reading about Cobell’s MacArthur award. Lannan asked the foundation if Cobell had applied for a Lannan grant. Yes, he was told, and the application had been rejected.

Intrigued, Lannan flew to Montana. He met Cobell for coffee at the Glacier National Park lodge and they talked for almost two hours. What the Native Americans needed most, Cobell told him, was money to hire accountants, people to crunch the numbers in preparation for their day in court.

Lannan left the lodge without promising any money. When he reached the Great Falls airport, he telephoned Cobell with a pledge of $1 million. Then he boarded the plane for Sante Fe. By the time he landed, he’d upped the figure to $2 million. Later, when that money ran out, the foundation chipped in another $2 million.

“We’ve always prided ourselves in the fact that if something needs to be done, we should so it,” says Lannan, whose family made its fortune in finance. “There was something about her that really impressed us. I guess it was her ability to describe what it’s been like to be an Indian in this sort of thing.”

To date, legal and accounting expenses have amounted to about $8 million.

when gingold was plotting his strategy about where to file the lawsuit, he knew that federal courts in Washington and New York are much less likely to be overturned on appeal. Partly as a matter of convenience, Gingold chose Washington. Then, he said, “We won the lottery.”

The judge assigned the case was U.S. District Judge Royce Lamberth, a native Texan who favors boots and large cars. At first blush, the selection seemed dubious. Lamberth was a Reagan appointee whose decisions had often rankled the Clinton administration.

But Gingold knew that the judge had laser-like concentration when dealing with complicated subjects. That would be a plus in the trust case, with its voluminous boxes of documents and accountant-speak. Further, Lamberth had been a federal prosecutor for many years, giving him an insider’s view of the federal bureaucracy.

From the beginning of the case, it was clear that the government could not produce the records that would have allowed accountants to reconcile the trust balance and get at least a rough estimate of how much the Indians had been paid. Many of the records had already been destroyed and, to make matters worse, 162 boxes of case-related documents were shredded after the trial began, a procedure Justice Department lawyers withheld from the court for three months.

Other records were in Louisiana and in rat-infested warehouses in New Mexico. Many more were kept haphazardly on reservations. The government promised to produce various records during the trial, though it was eventually clear that would prove to be impossible. Lamberth also discovered that the Interior Department’s computer system was so porous that hackers could set up trust accounts. He ordered the system shut down until the holes were plugged.

On Feb. 22, 1999, Lamberth held Babbitt, Treasury Secretary Robert Rubin and an assistant secretary for Indian affairs, Kevin Gover, in contempt for failing to produce records ordered by the court. The judge also imposed fines of more than $600,000.

In December 1999, Lamberth issued a 126-page opinion against the government. He called the case “a shocking pattern of deception. I have never seen more egregious conduct by the federal government.”

Equally blunt, Cobell says: “I’d like to see a few people go to jail for this.”

The government appealed to the U.S. Court of Appeals, but was soundly rebuffed, and opted not to appeal to the U.S. Supreme Court.

“The folks at Interior are going to have to cut to the chase and admit they don’t have the records and settle up,” says Bruce E. Johansen, who teaches Native American studies at the University of Nebraska at Omaha. “They aren’t fessing up to what they don’t have and can’t do.”

But no settlement is on the horizon, which leaves the case far from over. A second phase of the trial, which is not yet on the court docket, will be held to determine how much the government owes. Gingold says he believes the final award will be “far north of $10 billion,” and a study commissioned by the Interior Department warns that liability could be as high as $40 billion.

The government’s legal team has had more than 100 lawyers assigned to the case--more than the government employed in the complex Microsoft antitrust litigation. “I think Justice doesn’t want to give away the store,” says Clinger, the former congressman. “But the longer it goes on, the worse it’s going to get.”

in a ritual two years ago, Cobell was declared a warrior of the Blackfoot Nation and presented with an eagle feather--an honor reserved these days almost exclusively for U.S. armed services veterans.

Cobell has traveled a lonely road, often dealing with a government that ignored or insulted her, says Darrell Kipp, a Harvard-educated Blackfoot who returned to the reservation intent on preserving the Piegans language. “It took a lot of guts for her to do what she did,” Kipp says. “Remember, we’re a minority, a fact that sometimes escapes greater America. Minorities do run a risk when we rise up like this.”

Cobell now speaks to children around the country about the ability of Native Americans to succeed, even against long odds. Last month, more than three decades after she left school to care for her mother, Cobell returned to Montana State University to accept an honorary doctorate.

When she drives through Browning these days, she sees progress where others see poverty. Some homes on the north side of town are new and well-tended. A new gas station is on the main drag because the owner was able to borrow money from the Blackfoot bank.

She heads out of town, talking as she drives. The time has come for the government to settle, she says. For all the years of work, not a single Indian has been paid a dime for the government’s malfeasance and neglect. “The government is going to fight this no matter what, even if it’s morally or ethically wrong,” she says. “That’s a real crime in itself. They’re in such denial, it’s amazing. Congress needs to say no more money to fight this litigation.”

The car swings south, past where the Blackfeet are buried at Ghost Ridge. Then the tidy Cobell ranch house comes into view, with a new white fence lining the driveway. She finds a solace in this place, where a creek slices through the land near the house.

She also takes comfort in Alvin, who shuns the spotlight that sometimes falls on his wife. It’s nothing he wants for himself, but he takes pride in his wife for what she has accomplished. Sometimes he stops her in mid-sentence as she rattles on about the case, and he tells her it is time to talk about something else.

There are days when Cobell admits to being somewhat wistful about that $300,000 MacArthur award years ago, when she thinks of something she and Alvin might have done with the money--such as a nice long vacation to escape the frozen Montana winter. But then she shrugs and moves on.

In the light of late afternoon, Cobell spotted two of her cows standing by the roadside. They had found their way through a spot where the barbed wire was sagging. Cobell, dressed in a light blue business suit and street shoes, made her way through the muck of the spring thaw and herded the cows back onto her property. Her feet covered with mud, she hunted around until she found a sturdy stick to prop up the wire.

A rancher’s life. Next morning, she would fly out of Great Falls for more work in her other life--of Blackfoot warrior.