Tribal Trust Funds

Arizona Red Rock Mountains. Courtesy of NPS.

NRS | Native Americans | Current Work of NRS Involving Indian Law Litigation

The Cheyenne-Arapaho Decision

While the Indian Claims Section was coping with Mescalero Apache, the General Litigation Section (now “the Natural Resources Section”) was dealing with another multi-plaintiff suit involving tribal trust funds. In this second case, numerous tribes alleged that the Bureau of Indian Affairs (“BIA”) of the United States Department of the Interior had not properly invested tribal trust funds under the Indian trust fund investment statute, Pub L. No. 159, Ch. 86, Act of May 25, 1918, 40 Stat. 561, 591, repealed and superseded by Pub. L. No. Ch. 645, Act of June 24, 1938, 52 Stat. 1037, codified at 25 U.S.C. 162a (2008), which had initially authorized the Secretary to deposit tribal and individual Indian trust funds in state banks at interest or to purchase federal securities. Cheyenne-Arapaho Tribes of Indians of Oklahoma v. United States, 206 Ct. Cl. 340, 512 F. 2d 1390 (1975). The court concluded that the 4% statutory rate of interest on tribal trust funds represented "a floor rather than a ceiling" and that the BIA had the duty to maximize the return on investment of tribal trust funds. Cheyenne-Arapaho, 206 Ct. Cl. at 348, 512 F.2d at 1394. The Cheyenne-Arapaho decision has had a significant impact on the pending Tribal Trust cases, nearly all of which have presented tribal claims that the government had failed to maximize its investments of tribal trust funds.

The White Mountain Apache Decision

In 1992, the United States Claims Court issued a landmark decision on claims for mismanagement of tribal trust funds. White Mountain Apache Tribe of Arizona v. United States, 26 Cl. Ct. 446 (1992). Among other things, the ruling established

  • A test for the propriety of disbursements of tribal IMPL funds: namely, whether the government intended to benefit the Tribe when it made a particular disbursement. This was a repudiation of the apparent test in the Commission’s Blackfeet decision that a tribal trust fund disbursement was proper only if it could be shown that it resulted in an actual benefit to the plaintiff tribe. The government could, as a practical matter, almost never make such a showing.
  • A test for the propriety of expenditures of Tribal IIM funds.1
  • The proposition that, because the United States could not locate and produce certain key financial documents (cancelled checks) relating to the disbursements of $6.2 million of Tribal IIM funds, the government was liable for the disbursements and thus had to reimburse the tribe for the entire amount.

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1Tribal IIM (Individual Indian Money) funds were tribally owned monies in the IIM account system that were kept at a local bank in the vicinity of a reservation or at the BIA agency office. Unlike tribal IMPL funds, which were held in the Treasury, tribal IIM funds were readily accessible to the tribe and the BIA. Tribal constitutions adopted by the tribes under the Indian Reorganization Act usually required the BIA agency superintendent to approve of only those disbursements from tribal IIM funds that exceeded a certain amount.

 

Updated May 12, 2015

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