ASK ANYONE TO PICTURE IN HIS OR HER MIND THE image of a bank chairman, and this is likely to be the portrait: a gray-haired white male in his 60s who belongs to a country club, subscribes to Forbes and Business Week, and trusts his government. Little of that applies to Elouise Cobell of Browning, Mont. She is the unlikeliest of bankers. A member of the Blackfeet tribe -- population 10,000 on a 1.5 million-acre reservation on the elevated plains east of Glacier National Park -- Cobell was the tribal treasurer in 1983 when the local First National Bank went bust. Four years later, and after raising $1 million to irrigate the tribe's parched economic landscape, the Blackfeet National Bank opened and began making its first loans.
As the chair of the bank's board, Cobell, who is 53 and married to a rancher, has seen the bank become a boon to the economy of the reservation, for decades one of the poorest of some 270 U.S. tribes. A graduate of Great Falls Business College, where she developed a talent for accounting, Cobell was the driving force behind Blackfeet National.
With assets of $18 million and 15 employees, it is America's first Indian-owned and Indian-run bank. For her pioneering efforts, which were all but unknown beyond the reservation, Cobell in 1997 received a $310,000 grant from the John D. and Catherine T. MacArthur Foundation.
However much intellectual brilliance might have been needed to help get the Blackfeet into banking, Cobell needed to stir only a few brain cells to understand another financial reality: Billions of dollars of Native Americans' money that the federal government had been holding in trust for tribal members since the 1880s were lost or untraced. She learned this upon leaving school three decades ago. With sharpened instincts for economic justice, she resolved to take action.
Cobell realized that whether through low-level bungling at the local Bureau of Indian Affairs offices or through high-level Interior Department indifference in Washington, some 500,000 Indians had been, or were being, cheated out of up to $5 billion. The poorest of the nation's poor, suffering high rates of disease and unemployment, had been betrayed by officials of the world's wealthiest nation.
In 1996, Cobell and four others, including a Winnebago from Nebraska and an Apache from Oklahoma, filed a class-action lawsuit against the Secretary of the Interior and the Secretary of the Treasury. The lawsuit -- said to be the largest financial legal action ever taken against the federal government -- included charges that trust records were lost or destroyed, that funds were not properly invested, and that officials didn't tell individual Indians -- large numbers of them penniless -- where their trust funds were.
On Feb. 22, a federal judge in Washington, in blunt and unsparing words, cited Interior Secretary Bruce Babbitt and Treasury Secretary Robert Rubin for contempt of court. Judge Royce Lamberth said that the two officials and their underlings had been "engaging in a shocking pattern of deception of the court" during his efforts to find trust fund records. "I have never seen more egregious misconduct by the federal government," said Lamberth, implicitly describing the Babbitt-Rubin deceits as a worse scandal than Watergate, Iran-contra and the Clinton sex case.
Lamberth, who stated that "justice has not been done to these Indian beneficiaries," is only the latest impartial observer to condemn the financial assault against American Indians.
In 1996, Sen. John McCain, chair of the Indian Affairs Committee, said, "We have no idea how many thousands of Native Americans have been deprived of revenues that belong to them. We should be ashamed of a system that is a living example of our nation's inattention to our trust obligations to Native Americans."
McCain said that if trustees of any other federal fund had botched it the way the Interior Department had, "they would be in jail today."
In 1994, after members of Congress had been persistently presented the facts by Cobell and others, including lawyers from the Native Americans Rights Fund, the Native American Trust Fund Accounting and Management Reform Act was passed. It established a special trustee for Indians, one with experience in public finance. The presidential appointee was Paul Homan, a former president of Riggs National Bank in Washington and former senior deputy comptroller for bank supervision. He told the Senate about the trust fund mismanagement: "Honestly, I have never seen anything like it in my 30-year career." In another forum, he said, "As a former bank examiner, I have seen some very poor operating circumstances, and this is one of the worse messes that I've ever seen."
Soon after his appointment, Homan would see another mess -- the one within the Interior Department. The undermining and underfunding of his cleanup work became too much to take. In January, Homan resigned in frustration. As with most standoffs between Indians and the federal government, this one is traceable to the 19th century. When the U.S. Army began systematically killing or displacing Indians and then turning over their captured lands to white settlers, the federal government -- stopping short of a total wipeout -- appointed itself trustee of what small amounts of property were allotted to Indians.
Under laws passed with little regard for the rights of Indians, the Bureau of Indian Affairs was empowered to manage 55 million acres of land in the trust. The earnings from the sales and leases of the land and the money generated by timber, grazing and oil rights were supposed to be given to individual tribal property owners. This was the Great White Father's way of decreeing that Indians were too dull to manage their money -- hence the trust fund to be guided by the all-wise feds.
Interviewing Cobell in Washington three days before the Lamberth contempt ruling, I found her to be well in command of her facts. She has an easygoing wit and gracious charm. Those assets are twinned with a passion for justice. Long before she became the lead plaintiff in the 1996 lawsuit, Cobell tried to rouse federal officials to respond. She was brushed off, stonewalled or ignored.
All the while, she witnessed the raw poverty of many of the Blackfeet. As many as 80 percent live below the poverty line, a figure common in Indian country. A myth persists that casino revenues in the past decade have made Indians rich, with Chief Roulette Wheel cruising down Easy Street behind the Cadillac of Ronald Reagan's Welfare Queen. In fact, only a few tribes run gambling operations, and, by federal law, all profits must go to reservation social programs.
Of her tribe and others, Cobell says, "It is hard to get people out of poverty when they have nowhere to go. Even in the bank, we experience it. A lot of people lack the equity to do something. That's why I'm working so hard on this trust fund issue. If we can get people to the point where trust mortgages flow easily, and they understand they can leverage that to go into homes or businesses, then you have a lot of opportunities. But right now in Indian country, we have much work to do to ease the poverty."
Cobell has a reservoir of stories of Indians being denied their rightful due. One Blackfeet elder lives on 100 acres that were leased by trustees to oil companies that have been successfully drilling for decades. Yet the Indian receives checks only sporadically, most often with no accounting and often for sums well under $100. He lives in a hut and drives a 20-year-old car.
More than 50,000 trust accounts, holding $46 million, were for Indians for whom government officials had no addresses or had incorrect addresses. Some warehouses where aging boxes of records were stored had become breeding grounds for rat-borne diseases. Rodent dung and urine had so contaminated the files that astronaut-style space suits were needed for government people seeking information.
Is it imaginable for a person to walk into Chase Manhattan and be told that his or her trust fund records aren't available? "Sorry. Come back when we clean out the rat droppings, and bring your space suit, too."
Cobell has much work ahead of her in Washington. She has seen the stonewalling skills of Bruce Babbitt as he has avoided dealing with the trust fund debacle. He has never given a press interview on the question and, more telling, has refused all requests from tribal leaders to discuss solutions. They held him in contempt; so now does a federal court.
Remaining mum on how his department has cheated these impoverished Americans out of billions of dollars of their money, Babbitt has shown stellar zeal on other issues. Two days after being lambasted by a federal judge, Babbitt appealed to Congress for $9.1 million to research why frogs are disappearing throughout America. "This is urgent," he said of the frog crisis.
While impoverished Indians continue to endure joblessness, hunger and despair, and look on while their money is lost and mismanaged by the Clinton administration, the secretary of the Interior has become a crusader for frogs.
On Wednesday, Babbitt said he needs $100 million next year and new laws to straighten out the trust fund fiasco. Babbitt appeared before a joint oversight hearing of the Senate committees on Indian affairs and natural resources. The government has spent five years and $21 million in an unsuccessful effort to fix the bookkeeping problems. An accounting firm has estimated that the costs might exceed $300 million or more.
Colman McCarthy directs the Center for Teaching Peace in Washington. He teaches courses on nonviolence at several Washington-area schools.
Pub Date: 03/07/99