A special master in a long-running lawsuit brought by the Native Americans against the Interior Department resigned in disgust last Monday, citing repeated efforts by Interior to disqualify him from the case to prevent damaging evidence from surfacing about agency mismanagement of trust monies for oil and natural gas and other activities on Indian lands.

“In recent months, I have reported evidence of a practice — abetted by Interior — of energy companies routinely paying individual Indians much less than they pay non-Indians for oil and gas pipeline easements across the Southwest. I also have uncovered evidence that Interior fails to diligently monitor oil and gas leasing activities on individual Indian lands. To prevent further investigation into these matters, Interior seeks my removal from the…case,” wrote Alan L. Balaran in a letter to U.S. District Judge Royce C. Lamberth, who accepted his resignation with “profound regret.”

The nearly eight-year-old lawsuit, which was brought by Elouise Pepion Cobell of the Blackfeet Reservation in western Montana, alleged that Interior as fiduciary abused and mismanaged the individual Indian trust funds over the past century, bilking Native Americans out of as much as $10 billion in royalty monies stemming from oil and natural gas production, and timber and mining activities on their lands [Case No. 97-1285].

Balaran, a Washington, DC attorney, said Interior’s attempts to remove him from the case began in March 2003, when he visited the agency’s Office of Appraisal Services for the Navajo Regional Office in Gallup, NM. “There, in the presence of the Department of Justice and Interior counsel, the chief appraiser admitted that he appraised oil and gas easements running across individual Indian lands for amounts considerably less than the appraised value of identical interests held by non-Indians,” and that he had destroyed all evidence of his 20-year practice.

He issued a report on his findings in August 2003, but Balaran said it just scratched the surface. “I soon began to uncover evidence that Interior was putting the interests of private energy companies ahead of the interests of individual Indian beneficiaries.”

In September of that year, Balaran said he visited the Minerals Management Service’s (MMS) Office of Minerals Revenue Management in Dallas, TX, which houses all of Interior’s oil and gas audit files. “After only two hours, during which I uncovered chaotic record-keeping practices and missing audit files, MMS officials informed me that Justice ordered that I leave,” he said.

While earlier investigations exposed “random incidents” of mismanagement, “my recent findings implicated the agency’s systemic failure to properly monitor the activities of energy companies leasing minerals on individual Indian lands,” Balaran wrote. “The consequences of these findings could cost the very companies with which senior Interior officials maintain close ties, millions of dollars.”

In the end, “it is evident that Interior, supported by the Department of Justice, is committed to removing me from this case” because of “my discovery of significant problems with its appraisal and record-keeping practices,” he said. “A full investigation into these matters might well result in energy companies being forced to repay significant sums to individual Indians. Interior could not let this happen.”

Balaran said he was “confident” the court would deny Interior’s motion to unseat him, but he noted the agency’s efforts still would “persist and accelerate,” which would render him of “no practical service to the court.”

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