American Jobs And Closing Tax Loopholes Act Of 2010
Floor Speech
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Mr. BARRASSO. Madam President, the tax extenders bill includes a settlement that involves a class action lawsuit that is known as Cobell v. Salazar. The total cost of this settlement is about $3.4 billion. This settlement will affect hundreds of thousands of Indian people across the United States who are class members in this lawsuit. It was signed last December by the Obama administration with the lead plaintiffs and their attorneys. Part of the settlement provides $1.4 billion to individual Indians whose trust assets have been mismanaged by the Federal Government for over 100 years. Another $2 billion would be used by the Department of the Interior to consolidate Indian land ownership to prevent a repeat of these claims.
On Wednesday, June 9, 2010, Attorney General Holder and Secretary Salazar sent letters to the Senate leaders opposing an amendment I filed on Tuesday, June 8. My amendment corrects serious flaws in the settlement. I am going to respond to their letter as well as explain my amendment.
The Attorney General and the Secretary argue that the amendment makes material changes to the settlement that would render it void. To begin with, I must point out that the parties have changed their settlement in material ways several times--several times--since it was announced that the agreement had been reached. Whenever they deem fit, they change it. For the reasons I am about to go into, they should change it again. If they don't, then Congress should act.
In their letter to leadership, the Attorney General and Secretary Salazar say:
The nature of any settlement agreement is that no one gets everything they asked for.
I know the Cobell case has waged on and on in the courts for 14 years. It has been up and down on appeal many times--too many times. In fact, it is on appeal right now. So I support settling this case. I support providing fair compensation to people harmed by decades of Federal mismanagement. I support consolidating the fractionated ownership of land to prevent the recurrence of problems that led to this court case. But I cannot support the settlement as drafted by the administration. It has flaws, and I believe some of them are very serious. All of them can and should be fixed without making major changes to its overall structure. Leaders in Indian country agree.
I ask unanimous consent that a letter dated June 11, 2010, from the National Congress of American Indians to Senator Dorgan and to me be printed in the Record following my remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibit 1.)
Mr. BARRASSO. Madam President, the National Congress of American Indians' letter states that the changes in my amendment address legitimate concerns that have been raised by tribal leaders and Indian people. The NCAI letter references resolutions passed by the Affiliated Tribes of Northwest Indians and the Great Plains Tribal Chairmen's Association supporting my amendment.
So what does my amendment do? It addresses five significant weaknesses in the settlement. The first issue is attorneys fees. This settlement was signed by the Department of Justice and two of the plaintiffs on December 7, 2009. Originally, the settlement said that Congress had to approve it in 24 days--by New Year's Eve. Well, supporters said there was no time for a hearing; Congress had to act immediately. I disagreed. Any $3.4 billion settlement paid for by taxpayers that affects the lives of hundreds of thousands of people should have a hearing before Congress.
I requested that the Committee on Indian Affairs hold a hearing on the settlement. Chairman Dorgan scheduled one nearly 6 months ago and that hearing was December 17, 2009. During the hearing, it was disclosed that the parties had entered into a separate agreement covering attorneys fees. In the side agreement, the plaintiffs' lawyers agreed not to ask the court for more than $99.9 million in presettlement attorneys' fees and costs, and the administration agreed not to argue that the attorneys should get anything less than $50 million. So, in effect, the two parties quietly agreed that the plaintiffs' attorneys should be paid between $50 million and $100 million.
This separate agreement also provided that when attorneys asked the court for presettlement fees, the attorneys must provide contemporaneous time records, but they said only ``where available.'' This is a very remarkable agreement, especially for a court case that was pretty much all about inadequate government recordkeeping in the first place.
What the government has done is agreed not to demand contemporaneously prepared time records when the attorneys ask the court for their fees--fees that will be taken directly out of the funds that are supposed to be distributed to the class members in the suit. This settlement should be about compensating the individual Indians who were harmed by government mismanagement. My amendment requires production of contemporaneous records and it caps the fees at $50 million. Fifty million dollars is an amount that both parties agreed would not be appealed. It is their number, so it must be fair.
Besides the issue of attorneys fees, there have been other concerns raised about the settlement--about the possibility of a multimillion dollar incentive award to named plaintiffs; about the qualification of the bank where the money will be deposited; about the role of Indian tribes and the land consolidation aspect of the settlement; and about the formula for distributing the money. My amendment addresses each of these issues.
The amendment would also require that any ``incentive awards'' to named plaintiffs be justified by documented expenses. Leading the case of Indian landowners against the government for 14 years has undoubtedly been an exhausting burden and an expensive burden. The named plaintiffs should be allowed to ask the court to have those expenses reimbursed. My amendment would limit any such award to an aggregate amount of $15 million and only for the expenses incurred by the class representatives. This is the amount the plaintiffs told us is their total estimated out-of-pocket expenses. The amendment would allow full reimbursement of these expenses.
My amendment also addresses the selection of the bank that will hold the $1.4 billion in settlement funds. The settlement is especially lax in setting standards to ensure the safety of these funds--lax, I believe, to the point of being irresponsible. My amendment simply requires the court to consider certain factors when approving a proposed bank: experience, a history of regulatory compliance, plus competitive interest rates and fees. These factors are important because if anything happens to the money, then the class members bear the risk of the loss. I cannot fathom why asking the court to simply consider these commonsense protections will void the settlement.
The amendment I have offered will require the Secretary of the Interior to consult with Indian tribes on implementation of the Indian land consolidation program. In order for this $2 billion consolidation program to succeed, the tribal governments should be partners in implementation. The amendment would require that to happen.
Finally, my amendment would provide relief for certain class members for whom the pro rata formula used in the settlement does not work. This formula is simple and will be easy to use. That is why the administration likes it. In many cases, the formula won't work and will lead to unfair results. It is necessary that we create a system for individual class members with unique circumstances to petition the court for a nonstandard settlement payment.
Under my amendment, the court would be provided with broad flexibility to make discretionary awards in appropriate cases.
In closing, I urge Members of the Senate to support this amendment to the Cobell settlement provisions in this measure. My amendment doesn't change the structure of the settlement. It does improve, however, the agreement for the hundreds of thousands of class members covered by the settlement.
What my amendment doesn't do is void the agreement. Let me repeat, my amendment does not void the agreement; it does not void the settlement. Plaintiffs have the ability to void the settlement if they don't believe the changes are in the best interests of the class members. The administration can void it if they don't believe there should be financial standards for selection of the bank that will hold and manage $1.4 billion of settlement funds. By passing this amendment, we will not void the agreement.
Congress has the obligation to never rubberstamp an agreement and to not rubberstamp this agreement.
Adopting my amendment is the right thing to do.
I yield the floor.
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