In December 2009, when the New York Times
reported on the Obama Administration celebrating
its achievement in settling royalties claims by American Indian tribes
against the U.S. Department of Interior for pennies on the dollar, the
misappropriated royalties from the plaintiffs' 56 million acres --
administered by Interior under the Indian Trust Fund -- were to be
partially restored and distributed by year's end. As presaged in a
September 2005 Mother Jones
article by Julia Whitty, it would turn out to be a bittersweet
victory for Blackfeet warrior Elouise Cobell.
As noted in a December 2009 article at Indian Country Today
The willingness to settle for $3.4 billion of the
estimated $47 billion stolen by the U.S. government since 1887 reflected
the desperate poverty of the plaintiffs as a class, as well as the
realization that it was probably the best they could do given the
American political system.
In December 2010, when the Obama Administration hosted the White House Tribal Nations Conference
to celebrate its belated and half-hearted endorsement of the 2007
United Nations Declaration on the Rights of Indigenous Peoples, tribal
leaders were hopeful that the attacks on American Indian governments --
begun in 2004 by the Internal Revenue Service -- would come to an end.
Instead, less than two years since the tribal summit, the U.S.
Department of Treasury has escalated its attack
on tribal sovereignty, imposing discriminatory policy on tribal governments and their citizens.
In what is possibly the most callous and cynical follow-up imaginable to the settlement of Cobell
, the IRS is now trying to tax
the meager benefits
received by the plaintiffs after generations of unimaginable suffering
by them and their ancestors -- some of whom literally froze and starved
to death -- while Interior and the oil and gas companies lived lives of
luxury at their expense.
As noted in the June 2012 testimony
by the National Congress of American Indians to the Senate Committee on Indian Affairs, it is noted that,
In 2005, the IRS began an aggressive campaign to audit
every Indian tribal government in the country and impose inequitable tax
treatment on Indian tribes. In this effort, the IRS has frequently
undermined longstanding principles of tribal sovereignty, tribal
self-government and the federal trust responsibility and failed to
respect the roles of tribal governments under the U.S. Constitution and
the plain language of federal statutes.
Concluding its detailed testimony of unfair treatment of Indian
tribes by the IRS, the National Congress of American Indians urged the
U.S. Congress to rein in these abuses of federal authority. As observed
in this testimony,
The timing of the IRS effort -- to attempt to change the
law regarding taxability of trust funds at precisely the time when the
United States is finally making partial compensation for many decades of
trust funds mismanagement -- raises the implication of unfair dealing.
As James Warren observed
in the June 2010 issue of The Atlantic
The story turns on theft and incompetence by the Interior
and Treasury Departments, with culprits including Interior's Bureau of
Indian Affairs (BIA) and the same Minerals Management Service now at the
center of the BP oil spill fiasco...Government officials exploited
computer systems with no audit trails to turn Indian proceeds into slush
funds but maintain plausible deniability.
As U.S. District Judge Royce Lamberth who oversaw the case for a
decade, remarked, the whole matter is "government irresponsibility in
its purest form."
On Friday, 14 September 2012, the Subcommittee on Indian and Alaska
Native Affairs of the U.S. House of Representatives held an oversight hearing
to examine the dramatic shift in federal policy by the Internal Revenue
Service regarding tribal distributions from trust resources under the Per Capita Act
Noting that the IRS on 6 September backed off on its claim that trust
fund distributions from the settlement of Department of Interior mismanagement
of Indian Trust Fund resources are taxable, tribal witnesses at the
hearing made the important observation that the IRS has not backed off
on its more significant claim that other trust fund distributions are.
This unilateral reversal of U.S. policy by the U.S. Treasury not only
attempts to take tribal resources exempt from taxation under U.S. law,
but would also establish the unprecedented situation where tribal
distributions derived from these resources would now be included in
income determination for federal benefits such as housing, health and
education--as well as Social Security. As American Indian tribes try to
raise their members from lives of poverty through self-sufficient
efforts -- using their own resources -- the idea that the IRS would try
to thwart these efforts is baffling.
As Athena Sanchey Yallup of the Yakama Nation Tribal Council remarked
the IRS' attempts to tax our trust resources are simply a
disingenuous money grab that our People can ill afford...The IRS'
policy change perversely requires poor tribal members to pass on tribal
resources to avoid taxation [and] corrupts the trustee relationship by
profiting from trust resources of the beneficiary.
In the August 30, 2012 report
by the UN Special Rapporteur on the rights of indigenous peoples, it is
noted that flagrant violations of historical treaties constitute some
of the principal wrongdoings committed by the United States towards
indigenous peoples. Indeed, as Special Rapporteur James Anaya reports,
plenary congressional power over the "domestic dependent nations" is out
of step with contemporary human rights values.
This plenary power, exercised throughout the history of US-tribal
relations, he notes, has had devastating social and economic
consequences still apparent today.
Anaya goes on to say that,
the image now often popularized of Native Americans flush
with cash from casinos is far from the norm. A number of tribes do have
casino operations as part of economic development efforts, taking
advantage of special exemptions from ordinary state regulation and
taxation that are available to them under federal law. Most tribes,
however, do not have casinos and, of those that do, only a handful have
reaped substantial riches sufficient to significantly reduce poverty
The loss of their lands by force or fraud, says Anaya, meant the
substantial or complete undermining of indigenous peoples' own economic
foundations and means of subsistence... Measures of reconciliation and
redress, he notes, should include initiatives to address outstanding
claims of treaty violations or non-consensual takings of traditional
lands and to secure indigenous peoples' capacities in accordance with
the United States international human rights commitments.
Only then can we advance toward reconciliation.