ANOTHER ACCOUNTING SCANDAL - but ANOTHER ACCOUNTING SCANDAL - but this one a century in the making. Oregonian reporter Michael Milstein reports
on what he describes as "perhaps the greatest case of government financial
incompetence in history" - the disastrous mismanagement of trust funds by
the Department of Interior's Bureau of Indian Affairs:

The government held Indian allotments tax-free and leased them
to farmers, loggers, miners and, later, oil companies. Congress set up a
trust fund to hold the royalties and dole them out to Indian owners. But
a federal Indian agent despaired as early as 1828 that it looked as though
the government had handled Native American funds "with a pitchfork" -- and
it got worse. Not only did the government not balance the checkbook holding
Native American money, it barely even kept a checkbook.

Milstein's report gives a good summary of the problem, along with Samantha Levine's from U.S. News:

At issue is the Interior Department's mismanagement of the roughly $500 million that annually passes through the trust fund program, which was established in 1887 to pay the Indians royalties generated from mining, timber, oil, and farming on lands their ancestors were forced to cede to the U.S. government. Over the decades, the record is one of gross negligence by the Interior Department–many account files have been destroyed, and nearly 60 percent of all leases for trust lands were never recorded. The whole system is in such bad shape that the government doesn't have a full count of Indian beneficiaries or how much money they are owed, although [plaintiff Elouise] Cobell believes the sum is $10 billion or more. "There has never been any internal control," says Cobell's lead attorney, Dennis Gingold, "and no way to determine where the money is held and how it's distributed. That raises serious fraud issues."

I have to wonder if the program was run sloppily from the start because its administrators didn't really believe they would ever have to make an honest accounting to the Indians. As an aside, I couldn't resist this comment from Levine's report, concerning the judge's decision to shut down Interior's computers because of serious security problems:

Suspected faults in the Interior Department's online accounting system were confirmed when a court-appointed hacker broke in–twice–and set up a false account to illegally receive money.

"Court-appointed hacker". I wonder how you go about applying for that kind of work.
Posted by Moira Breen at February 03, 2002 11:41 AM