An Interior Department attorney who has been locked out of his office at the Bureau of Indian Affairs accused the agency on Tuesday of failing to account for millions of dollars in trust funds.
After a stint in Oklahoma, field solicitor Robert McCarthy went to work for the BIA in Palm Springs, California, over three years ago. He said he quickly learned that the agency didn’t have a way to track more than $30 million in annual lease payments owed to members of the Agua Caliente Band of Cahuilla Indians.
Even when a payment was made, the BIA didn’t always pass it on to the beneficiary, McCarthy testified. In one case, the BIA kept a trust payment of $130,000 in a “special deposit account” for over 25 years because the agency didn’t know whose money it was.
Despite the apparent mismanagement, the BIA made money off of Agua Caliente landowners. “In virtually every case for virtually every type of administrative action,” the agency charged a fee for its services, McCarthy said.
For example, a fee of 1 percent was applied to every single land sale, McCarthy said. In Palm Springs — where real estate is big business — this amounted to payments to the BIA that were as high as $60,000, according to one document entered into evidence.
But federal regulations limit fees for land sales to $22.50, McCarthy said. The regulations also cap fees for leases at $500, though that apparently wasn’t followed in Palm Springs.
Similar problems were identified in a 1992 audit by the Interior Department’s Inspector General. The report recommended the BIA add a field solicitor to the Palm Springs office and develop a system to ensure Agua Caliente landowners were getting paid fair market value and that their leases were being enforced.
A computer system was purchased to track the leases, but McCarthy said he found it locked up in a back office and that it had never been used.
The situation prompted McCarthy to warn his superiors in the Solicitor’s Office, the Inspector General and eventually Jim Cason — the associate deputy secretary at DOI who was in charge of the BIA at the time — about the problems in Palm Springs. “I was kicked out of my office after I made my disclosures,” McCarthy told Judge James Robertson, who wondered why the solicitor was working from home — with pay — rather than at the BIA office.
“Everyone stopped talking to me,” McCarthy added. “I was shunned.”
And when McCarthy informed his superiors that he was going to testify in the Cobell trial, he was told he was going to be fired for allegedly disclosing confidential trust data to the media. The Public Employees for Environmental Responsibility group is defending McCarthy, who has filed appeals over his employment status.
Inspector General Audit:
Indian Trust Investigative Review (July 2007)
Agua Caliente Lands in Palm Springs
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