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[source: NativeNews; Mon, 21 Feb 2000 10:43:04]

From: Lynne Moss-Sharman <lsharman@microage-tb.com>
Subject: lawsuit $10 billion, mishandling "trust accounts"

Natives sue government for $10.6 billion
Rick Mofina
The Ottawa Citizen

              The federal government is being sued for more than $10 billion in several different lawsuits launched by First Nations bands or individual members who allege the federal government mishandled their trust accounts.

Indian trust accounts are a little-known aspect of federal responsibility and the court actions turn the tables on the financial accountability issue, putting the federal government's management practices under question instead of those of native administrations, said one native leader.

"It is a major concern," said Dennis Whitebird, a regional chief with the Assembly of First Nations.

Mr. Whitebird said the lawsuits underscore the need for an overhaul of the paternalistic trust-account system. He predicted more court actions as more bands scrutinize their financial relationship with the federal government.

The Department of Indian Affairs, which administers native trusts under the Indian Act, is being sued for a total of $10.6 billion stemming from six major cases launched since 1996 by First Nations bands and individuals across Canada, according to records obtained by the Citizen using the Access to Information Act.

There have also been many other suits over trust accounts in recent years that have been settled or otherwise discontinued.

Indian Affairs could not discuss details of cases before the courts, said Ray Hatfield, acting director general of the revenue registration and band governance section of Indian Affairs, which oversees Indian trusts.

But Mr. Hatfield said that the areas of contention likely involve disputes on such matters as trust-account interest rates,entitlement, distribution, or claims that funds were not received.

Mr. Whitebird said the history of the government's handling of Indian trust accounts is dotted with examples of mismanagement by federal Indian agents, such as using trusts to buy farm equipment for reserves, or services.

"The Department of Indian Affairs used trust accounts to pay off health services, which they should not have been doing because the money was held in trust," said Mr. Whitebird, a co-chairman of the AFN's committee on trusts, from Winnipeg.

When Parliament introduced the Indian Act in 1876, it legislated Indian Affairs as the agency that would manage nearly all aspects of the lives of Indian people in Canada, including their financial affairs and trusts.

Little has changed since in the area of trust accounts. Indian Affairs maintains two types. One is for First Nations bands and usually involves a band's revenues from land transactions or oil and royalties. The other involves trusts for certain individual Indians, such as minors, mentally incompetents and adoptees.

These accounts in band and individual trust funds total some $1.05 billion. There are 608 bands which have 1,216 trust accounts and there are 13,500 individual trust accounts, according to Indian Affairs.

Mr. Whitebird and Mr. Hatfield said the federal government and Canada's First Nation bands are now working toward amending the section of the Indian Act concerning the trust account system.
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