What Is the Indian Trust Fund Settlement?


Quick Answer

The Indian trust fund settlement is a $3.4 billion settlement of American Indian plaintiffs with the federal government in the case of Cobell v. Salazar. It involves an Indian claim of federal mismanagement of tribal lands and Individual Indian Money accounts resulting in extreme poverty for many of the plaintiffs.

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Full Answer

Filed in 1996, the class action lawsuit reached settlement agreement in 2009. Congress approved the agreement in November 2010, President Obama signed legislation authorizing the distribution of settlement funds in December 2010, and payments began in September 2014. Claimants included anyone alive on Sept. 30, 2009, who had an IIM account between 1985 and Sept. 30, 2009, anyone owning trust land or land in restricted status on Sept. 30, 2009, or the heirs of the claimants. The settlement funds were divided into $1.5 billion to distribute among the claimants and $1.9 billion to purchase and consolidate fractionated Indian trust lands. A portion of the Trust Land Consolidation Fund was designated to finance an Indian Education Scholarship Fund.

Although the federal government denied the claims and accepted no legal responsibility, it agreed to the settlement to end the lawsuit. Elouise Cobell, who was one of the primary initiators of the lawsuit, claimed that the settlement was insufficient but might provoke fairer treatment in the future.

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