# Western Shoshone Identifiable Group v. United States

> United States Court of Federal Claims · June 13, 2019

URL: https://www.frixlaw.com/law-library/cases/4406826

## Case

- **Court:** United States Court of Federal Claims
- **Decided:** June 13, 2019
- **Precedential status:** Published
- **Opinion:** Opinion
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/4406826

## How later opinions describe it (automated extraction)

- noting that the United States Court of Claims is “this court’s predecessor”

## Opinion text

In the United States Court of Federal Claims
No. 06-896L
Filed: June 13, 2019

* * * * * * * * * * * * * * * *
THE WESTERN SHOSHONE *
IDENTIFIABLE GROUP, represented *
by the YOMBA SHOSHONE TRIBE, *
a federally recognized Indian Tribe, *
et al., * Tribal Trust Funds; 25 U.S.C.
Plaintiffs, * § 162a; Breach of Fiduciary
v. * Duty; Duty to Prudently
* Invest.
UNITED STATES, *
*
Defendant. *
*
* * * * * * * * * * * * * * * *

Kelli J. Keegan, Barnhouse Keegan Solimon & West LLP, Los Ranchos de
Albuquerque, NM, for plaintiffs. Of counsel were Randolph Barnhouse and Michelle
Miano, Barnhouse Keegan Solimon & West LLP, Los Ranchos de Albuquerque, NM, and
Steven D. Gordon, Holland & Knight, LLP, Washington, D.C.

Joshua P. Wilson, Trial Attorney, Natural Resources Section, Environment
& Natural Resources Division, United States Department of Justice, Washington, D.C.,
for defendant. With him were Peter K. Dykema and Trent Crable, Natural Resources
Section, Environment & Natural Resources Division, and Joseph H. Hunt, Assistant
Attorney General, Civil Division, Department of Justice. Of counsel were Anthony P.
Hoang, Natural Resources Section, Environment & Natural Resources Division, United
States Department of Justice, Washington, D.C., Michael Bianco and Joshua
Edelstein, Office of the Solicitor, United States Department of the Interior, Washington,
D.C., and Thomas Kearns and Rebecca Saltiel, Office of the Chief Counsel, United
States Department of the Treasury, Washington, D.C.

OPINION

In this Native American tribal trust fund case, three tribal plaintiffs and three
individual plaintiffs have sued defendant, the United States, for allegedly mismanaging
plaintiffs’ three tribal trust funds, received as a result of three separate cases before the
Indian Claims Commission (ICC) and its successors for the government’s taking of the
plaintiffs’ ancestral lands in Nevada and California without just compensation, over a
thirty-three-year period. Plaintiffs seek to recover $216,386,589.83 in damages for the
government’s alleged mismanagement of the largest of the tribal trust funds, the 326-K
Fund, and $1,592,822.43 in damages for the government’s alleged mismanagement of
the two smaller tribal trust funds, the 326-A-1 and 326-A-3 Funds. The three tribal plaintiffs
are the Yomba Shoshone Tribe, Timbisha Shoshone Tribe, and the Duckwater Shoshone
Tribe, three of the federally recognized Western Shoshone Tribes and three of the
members of the Western Shoshone Identifiable Group. The three individual plaintiffs are
Maurice Frank-Churchill, an enrolled member of the Yomba Shoshone Tribe, Jerry Millet,
an enrolled member of the Duckwater Shoshone Tribe, and Virginia Sanchez, also an
enrolled member of the Duckwater Shoshone Tribe. Plaintiffs allege that defendant
“imprudently” invested their tribal trust funds in securities that were too short-term,
resulting in less than maximum returns. It is not disputed by the parties that defendant
was the trustee of the funds at issue, and was responsible for the administration,
management, and investment of the funds at issue from the time the funds were
appropriated for deposit in the trust accounts for the benefit of the Western Shoshone
Identifiable Group until the time the funds were distributed to plaintiffs. Defendant asserts
that based on the facts and circumstances at the time, plaintiffs’ tribal trust funds were
prudently invested, as evidenced in part by the 6.8% average annual return of plaintiffs’
largest tribal trust fund.

The events leading up to this case, and this case, once filed, have a long history.
The case in this court was filed in 2006 and originally assigned to a Judge other than the
undersigned. On August 26, 2015, this case was transferred to the undersigned after the
original presiding Judge had issued two Opinions in this case, one dismissing defendant’s
motion to dismiss and one denying defendant’s motion for reconsideration. See W.
Shoshone Identifiable Grp. v. United States, No. 06-896L, 2008 WL 9697144 (Fed. Cl.
Oct. 31, 2008); see also W. Shoshone Identifiable Grp. v. United States, No. 06-896L,
2009 WL 9389765 (Fed. Cl. Nov. 24, 2009). After the issuance of two Opinions, there
were settlement discussions and settlement attempts before the case was reassigned to
the undersigned. Upon being assigned the above-captioned case in 2015, the
undersigned pressed the parties to initiate and intensify efforts on pretrial proceedings
and to get ready for trial, earlier settlement efforts having failed. Thereafter, the court held
a five-day trial in Washington, D.C. This Opinion only addresses the issues of liability and
whether the government breached its fiduciary duty to plaintiffs when investing the tribal
trust funds. The facts described below are a brief summary of important, pertinent events
taken from the extensive record before the court and the joint stipulations submitted by
the parties which are relevant to deciding issues of liability in this case. By no means are
the below facts an event-by-event description of everything that happened over the thirty-
three-year period at issue.

FINDINGS OF FACT

I. Origin of plaintiffs’ tribal trust funds

Plaintiffs are the beneficial owners of three tribal trust funds stemming from three
separate judgment awards. The first judgment occurred on August 15, 1977, when the
ICC awarded $26,145,189.89 to the Western Shoshone Identifiable Group in Docket 326-

2
K for the taking of ancestral land located in modern day Nevada and California. Unlike
the plaintiffs’ awards in its second case before the ICC, docket number 326-A-1,
discussed below, in which the plaintiffs were awarded a judgment, plus interest, based
on the record before the court and the parties’ revised joint stipulations of fact in the
above-captioned case, plaintiffs were not awarded any interest for the award of the
$26,145,189.89 in the 326-K Fund case. Both parties appealed the ICC’s August 15, 1977
award of $26,145,189.89, which was subsequently affirmed by the United States Court
of Claims1 on February 21, 1979. See Temoak Band of W. Shoshone Indians, Nevada
v. United States, 219 Ct. Cl. 346, 361, 593 F.2d 994, 1002, cert. denied, 444 U.S. 973
(1979). On December 19, 1979, the ICC’s award of $26,145,189.89 was deposited into a
tribal trust fund account in the United States Treasury under account number JA9334697.
The parties in the above-captioned case refer to this tribal trust fund as the “326-K Fund,”
and it is the largest of the three tribal trust funds at issue.

The second judgment occurred on December 3, 1991, when the United States
Claims Court2 entered a judgment in Western Shoshone Identifiable Group v. United
States, Docket Number 326-A-1, in the amount of $823,752.64 in favor of the Western
Shoshone Identifiable Group. See Te-Moak Bands of Western Shoshone Indians of
Nevada, et al. v. United States, United States Claims Court, Docket No. 326-A-1,
Judgment (Dec. 3, 1991). The award of $823,752.64 was comprised of $815,209.67,
together with interest of $8,542.97. See id. On March 25, 1992, the second judgment
award of $823,752.64 was deposited into trust in the United States Treasury under
account number JA9087691. The parties refer to this tribal trust fund as the “326-A-1
Fund.”

The third judgment occurred a little more than three years later, on June 16, 1995,
when the United States Court of Federal Claims entered a judgment in Docket Number
326-A-3, in the amount of $29,396.60, in favor of the Western Shoshone Identifiable
Group. See Te-Moak Bands of Western Shoshone Indians of Nevada, v. United States,
United States Court of Federal Claims, Docket No. 326-A-3, Judgment (June 16, 1995).
According to the final judgment entered on the 326-A-3 docket, which was introduced at
trial as a joint exhibit, the 326-A-3 award did not appear to include interest. On September

1 The United States Court of Claims is the predecessor court to the United States Court
of Appeals for the Federal Circuit and the United States Court of Federal Claims, the court
on which the undersigned presides over the above-captioned case. See Shields v. United
States, 136 Fed. Cl. 37, 48 (2018) (stating that the “United States Court of Claims (‘Court
of Claims’), [is] the predecessor court to the Federal Circuit”); see also Health Republic
Ins. Co. v. United States, 129 Fed. Cl. 757, 769 (2017) (noting that the “United States
Court of Claims (‘Court of Claims’), [is] a predecessor of this court and the United States
Court of Appeals for the Federal Circuit”); Geiger v. United States, 3 Cl. Ct. 647, 650
(1983) (noting that the United States Court of Claims is “this court’s predecessor”).
2 The United States Claims Court was renamed the United States Court of Federal Claims
in 1992. See Federal Courts Administration Act of 1992, Pub. L. No. 102-572, § 902, 106
Stat. 4506, 4516 (1992).
3
15, 1995, the award of $29,396.60 was deposited into trust in the United States Treasury
under account number JA1009693. The parties refer to this tribal trust fund as the “326-
A-3 Fund.” The account number and type, and the sources of the three funds are
displayed below:

ACCOUNT NO. & TYPE SOURCE OF FUND

INITIAL AWARD OF $26,145,189.89 ON 12/19/1979,
JA9334697 WESTERN SHOSHONE JUDGMENT FUNDS
ICC DOCKET 326-K

INITIAL AWARD OF $823,752.64 ON 3/25/1992,
JA9087691 WESTERN SHOSHONE JOINT JUDGMENT FUNDS
ICC DOCKET 326-A-1

INTEREST CLAIM OF $29,369.60 ON 9/15/1995,
JA9087691 WESTERN SHOSHONE JOINT JUDGMENT FUNDS
ICC DOCKET 326-A-3

II. Investment of tribal trust funds

a. 25 U.S.C. § 162(a)

The parties have stipulated that “Tribal Trust Funds” are tribal monies, including
judgment awards, revenues, and other payments made to Indian tribes, which are
required by law to be deposited in the United States Treasury and historically to be
managed by the United States Department of the Interior. The parties also have stipulated
to an abbreviated summary of the relevant history to the above-captioned case, some of
which is described below. Some historical highlights for the purpose of providing some
context follow. In 1880, the Department of the Interior was authorized to deposit tribal
trust funds in the United States Treasury to earn a simple interest rate of four percent per
year whenever it determined that such a course of action was in the best interest of an
Indian tribe. In 1918, the Department of the Interior was permitted to deposit tribal trust
funds into any public-debt obligations of the United States and into any notes, bonds, or
other obligations that were unconditionally guaranteed as to both principal and interest,
when the Department of the Interior determined doing so was in the best interests of an
Indian tribe. In 1938, Congress passed the Act of June 24, 1938, ch. 648, § 1, 52 Stat.
1037, currently contained at 25 U.S.C. § 162a (2018), the statute at issue regarding
plaintiffs’ allegations of breach of trust in the above-captioned case, which codified the
authority of the Secretary of the Department of the Interior to invest tribal trust funds. 3
According to Subsection (a) of 25 U.S.C. § 162a:

3 The Secretary of the Interior has had and continues to have the authority pursuant to 25
U.S.C. § 161 (2018) and 25 U.S.C. § 161a (2018) to deposit tribal trust funds in the United
States Department of Treasury in lieu of investing tribal trust funds in securities allowed
under 25 U.S.C. § 162a. See 25 U.S.C. §§ 161, 161a. The plaintiffs in the above-
captioned case, however, do not allege that defendant breached a duty regarding the
investment of the three funds at issue in the United States Treasury pursuant to 25 U.S.C.
4
The Secretary of the Interior is hereby authorized in his discretion, and
under such rules and regulations as he may prescribe, to withdraw from the
United States Treasury and to deposit in banks to be selected by him the
common or community funds of any Indian tribe which are, or may hereafter
be, held in trust by the United States and on which the United States is not
obligated by law to pay interest at higher rates than can be procured from
the banks. The said Secretary is also authorized, under such rules and
regulations as he may prescribe, to withdraw from the United States
Treasury and to deposit in banks to be selected by him the funds held in
trust by the United States for the benefit of individual Indians . . . .

25 U.S.C. § 162a(a).

Subsection (a) of 25 U.S.C. § 162a further provides that:

[T]he Secretary of the Interior, if he deems it advisable and for the best
interest of the Indians, may invest the trust funds of any tribe or individual
Indian in any public-debt obligations of the United States and in any bonds,
notes, or other obligations which are unconditionally guaranteed as to both
interest and principal by the United States.

25 U.S.C. § 162a(a). As both parties noted during trial, Subsection (a) of 25 U.S.C.
§ 162a limits the government’s investment of tribal trust funds to fixed-income securities
backed by the full faith and credit of the United States, including bonds issued by federal
agencies, the United States Department of Treasury (Treasury securities), mortgage-
backed securities, and certificate of deposits (CDs). Moreover, both parties agree that
Subsection (a) of 25 U.S.C. § 162a would not allow the government to invest in stocks or
foreign-issued bonds. The parties do not contest that the government invested any of
plaintiffs’ three tribal trust funds in investments prohibited by law, nor do the parties
contest that the government misappropriated or stole any of the plaintiffs’ tribal trust
funds. The contention in the above-captioned case is whether the government prudently
invested the plaintiffs’ three tribal trust funds in government-approved securities.
According to plaintiffs, “[t]he issue is whether the government invested prudently.”
Plaintiffs challenge the government’s investment of their three tribal trust funds among
securities which were permissible at the time under the investment statute at 25 U.S.C.
§ 162(a). According to plaintiffs, the government did not prudently invest their three tribal
trust funds, but instead consistently under-invested the three funds in too short-term
securities. Defendant argued to the contrary.

Because Subsection (a) of 25 U.S.C. § 162a only allows the government to invest
tribal trust funds in government-backed securities, both parties agree that the government
faces virtually no credit risk when investing tribal trust funds, i.e., a risk that the fixed-

§ 161 or 25 U.S.C. § 161a, nor that defendant retained plaintiffs’ three tribal trust funds in
the United States Treasury instead of investing the funds.
5
income security4 issuer will default on the security. Both parties also agree that the
primary risk that the government faced when investing plaintiffs’ tribal trust funds was
“interest rate risk,” the risk that interest rates will change over the life of a fixed-income
security. As both parties agree, the risk that interest rates will fluctuate is greater for fixed-
income securities that have a longer-term maturity.5 Defendant’s liability expert, Dr. Laura
Starks, explained in her expert liability report, “if interest rates increase, bond prices fall.
That risk is greater for longer-maturity investments.” Similarly, plaintiffs’ rebuttal expert,
Dr. Michael Goldstein, explained in his rebuttal expert report that, “longer-term
investments” “[t]raditionally” experience higher-yields than shorter-term investments to
reflect the “interest rate risk that the holder is taking (i.e., when rates change).” In addition,
as plaintiffs’ counsel noted during her opening statement at trial, “[a]ll of the experts agree
that longer maturities normally offer larger average returns than shorter term maturities,
but their value does fluctuate with changes in the interest rate, which can result in either
capital gains or capital losses if they are sold before maturity.” Thus, as the parties agree,
if a bond-holder had to sell a bond prior to maturity, and interest rates increased from the
time the bond-holder purchased the bond, the bond-holder will likely experience a loss on
the principal of the bond because the bond’s value has decreased. Conversely, if a bond-
holder had to sell a bond before maturity, and interest rates decreased since the time of
purchase, the bond-holder would likely experience a gain on the principal of the bond
because the bond’s value has increased. If the bond-holder holds the bond to maturity,
any change in interest rates would not affect the bond’s principal value. Interest rate risk,
thus, becomes relevant when an investor decides to sell a bond before maturity. The

4 At trial and in their expert reports, both parties’ liability and damages experts referred
interchangeably to “fixed-income securities” and “bonds” when discussing general
investment principals. Therefore, for purposes of this Opinion, this court interchangeably
shall refer to fixed-income securities and bonds, as used by the parties, when
summarizing the parties’ positions regarding general investment principals.
5 As both parties’ liability experts indicated at trial, the definition of a “longer-term” security
versus a “shorter-term” security varies somewhat throughout the investment industry.
According to the trial testimony of plaintiffs’ liability expert, Mr. Kevin Nunes, “ultra-short-
term” securities have maturities of one year or less, “short-term” securities have maturities
between one and five years, “intermediate-term” securities have maturities greater than
five and less than ten years, and “long-term” securities have maturities between ten and
thirty years. Contrastingly, defendant’s liability expert, Dr. Laura Starks, testified at trial,
“[p]eople define” the terms “short-term,” “intermediate term,” and “long term” differently
and that during her career, she has “actually seen these definitions change over time.”
According to Dr. Starks’ trial testimony, “short-term investments is -- typically, to me, that
would be a year or less, maybe a little over a year,” and whether securities with a maturity
of “two years” should be considered short-term would be “debatable.” Dr. Starks testified
at trial that “intermediate term” would be “primarily three to five years,” and that “[t]here
are others that extend intermediate to longer term.” Dr. Starks also testified that “long
term” would “typically” include securities with maturities of “ten years or more.” Dr. Starks
testified that securities with a maturity between five to ten years “don’t have a real
definition,” and that “[t]o me, it’s between what’s clearly intermediate and what’s clearly
long term.”
6
interest rate risk facing the government when investing plaintiffs’ three tribal trust funds
will be discussed in more detail below.

Subsection (d) of 25 U.S.C. § 162a, another provision of the statute relevant to
plaintiffs’ allegation of fund mismanagement, provides that:

The Secretary’s proper discharge of the trust responsibilities of the United
States shall include (but are not limited to) the following:

(1) Providing adequate systems for accounting for and
reporting trust fund balances.
(2) Providing adequate controls over receipts and
disbursements.
(3) Providing periodic, timely reconciliations to assure the
accuracy of accounts.
(4) Determining accurate cash balances.
(5) Preparing and supplying account holders with periodic
statements of their account performance and with balances of
their account which shall be available on a daily basis.
(6) Establishing consistent, written policies and procedures for
trust fund management and accounting.
(7) Providing adequate staffing, supervision, and training for
trust fund management and accounting.
(8) Appropriately managing the natural resources located
within the boundaries of Indian reservations and trust lands.

25 U.S.C. § 162a(d).

b. The Department of the Interior’s investment policies and procedures

In 1966, the Bureau of Indian Affairs (BIA), the office within the Department of the
Interior which was delegated the task of investment tribal trust funds, began a formal
investment program and published an investment policy statement. The 1966 policy
statement, in pertinent part, stated that “[p]repatory to undertaking any investment
program with surplus trust funds, a tribe necessarily would have to make a careful
analysis of its current and future cash needs” to cover “at least two six-months periods.”
The 1966 policy also stated that “[e]ach Area Office is requested to review the amount of
tribal trust funds each tribe in the respective Areas has on deposit in the Treasury,” and
that “[w]herever it appears that the amount is in excess of foreseeable cash needs of the
tribe, discussions should be held with the tribal council and its wishes regarding
investment of the funds ascertained.” The 1966 policy statement also noted that
“[g]overnment-backed securities, while basically safe, can result in losses unless held to
maturity.”

In 1973, Congress passed the Indian Tribal Judgment Funds Use and Distribution
Act, Pub. L. No. 93-134, 87 Stat. 466 (1973) (Use and Distribution Act of 1973), which

7
established a process for distributing judgment awards to Indian tribes. Pursuant to the
Use and Distribution Act of 1973, the Secretary of Interior had 180 days from “after the
appropriation of funds to pay a judgment of the Indian Claims Commission or the Court
of Claims to any Indian tribe,” and to “prepare and submit to Congress a plan for the use
or distribution of such funds.” Use and Distribution Act of 1973, Section 2(A). When
preparing the distribution plan, the Secretary was required to consider any distribution
plan proposed by the tribes. See id. at Section 3(A)(1). The Secretary of Interior also was
required to hold a “hearing or record” with the tribes to obtain their input regarding the
distribution plan. See id. at Section 3(A)(2). The Secretary of Interior could request a 90-
day extension of the 180-day timeline for submitting a proposed plan for the distribution
of a judgment award to an Indian tribe, and such request was “subject to the approval of
both the Senate and the House of Representatives committees on Interior and Insular
Affairs.” See id. at Section 2(B). The Secretary of Interior’s plan submitted to Congress
would become effective after 60 days, absent Congressional disapproval of the plan.
Upon the plan becoming effective, the Use and Distribution Act of 1973 required that the
Secretary of Interior “take immediate action to implement the plan for the use or
distribution of such judgment funds.” See id. at Section 5(A). If the Secretary of Interior
did not submit a proposal within 180 days of the date of the appropriation of the particular
judgment award, and no 90-day extension was granted, then the Secretary of Interior
would have to submit proposed legislation to Congress in order for the funds to be used
or distributed.

The Secretary of the Interior did not submit a distribution proposal within the
required 180 days for the three funds at issue and no 90-day extension was granted.
Thus, pursuant to the Use and Distribution Act of 1973, Congress would be required to
pass legislation authorizing the distribution of the 326-K and 326-A Funds. As explained
in more detail below, over the years, various members of Congress introduced bills for
distributing the three tribal trust funds at issue, each of which did not pass. Distribution
legislation was finally passed in 2004, and the 326-K Fund was fully distributed in 2012.
The principal of the 326-A Funds was never to be distributed and is currently held in trust
as a permanent education trust fund, with the interest of the 326-A-1 and 326-A-3 Funds
to be used as educational grants for qualifying members of the Western Shoshone tribes.

In 1974, the BIA Acting Deputy Commissioner of Indian Affairs sent BIA’s updated
investment policy in a memorandum to the Area Directors of the BIA based in different
geographical regions in the United States and in charge of overseeing the investment of
various tribal accounts from tribes in their particular regions, which stated:

Area and agency offices should work very closely with the tribes to
determine the cash needs and ascertain if trust funds are available for
investment. When a decision has been made that surplus funds are
available for investment, arrangements should be made immediately with
the Branch of Investments, Albuquerque, to invest the funds.

8
The 1974 policy memorandum also stated:

Investments can be made for a period of one day or for as much as 25 years
or longer. Therefore, all funds except the funds for immediate needs can be
invested to provide a greater income to the tribe. The maturity dates can be
arranged to coincide with the needs for the funds. If requested, the funds
are returned to the U.S. Treasury at maturity and are available immediately
for expenditure through the normal procedures for the advance of funds to
the tribe.

It is the policy of the Bureau of Indian Affairs to maximize returns on all
tribal, as well as individual, trust funds. This comports with the recent
decision in Manchester Band of Pomo Indians v. United States, 363 F.
Supp. 1238 (N.D. California 1973).

Each Area Director has the responsibility for determining if surplus funds
are available for investment purposes and notifying the Branch of
Investments, Albuquerque, to take the necessary action to invest the funds.

(underline in original).

Subsequently, the BIA included a policy statement as part of the BIA’s “REPORT
OF INVESTMENT OF INDIAN TRUST FUNDS FOR FISCAL YEARS 1986 and 1987,”
which was introduced as a joint exhibit at trial. (capitalization in original). Although titled
a “REPORT,” the document contained two separate sections which discussed the BIA’s
investment policy. (capitalization in original). The first, titled “AUTHORITY,” stated:

Our basic authority is contained in 25 USC 162a [sic], which is specific for
Tribal and individual trust funds, and PL 98-146 which authorizes the
investment of collections from irrigation and power projects. The Bureau
can invest in certificates of deposit with banks and savings and loans which
are insured by FDIC [Federal Deposit Insurance Corporation] or FSLIC
[Federal Savings and Loan Insurance Corporation], or in banks which have
pledged collateral securities guaranteed as to both principal and interest by
the U.S. Government. Most of the purchased CD’s are for periods of less
than 1 year, although 1, 2 and 3 year CD’s have been purchased on
occasion. Investments can also be made through purchases of public debt
obligations of the United States (Treasury issues) or other obligations which
are guaranteed as to both principal and interest by the U.S. Government.

(capitalization and emphasis in original). The second section, titled “INVESTMENT
POLICIES AND INSTRUCTIONS,” stated:

Although BIA is the Trustee for Indian funds, an ideal investment
relationship is one in which Tribes participate fully by providing well thought-
out investment policies and instructions based on realistic cash flow

9
projections which are based on complete tribal budgets. It is possible,
through knowing the amounts required and when disbursements are
necessary, to plan the timing of investment maturities to maximize interest
rates and earnings and also have the funds available when needed.

(capitalization and emphasis in original). The parties agree that throughout the 1980s and
until the early 1990s, the BIA had a program in which it pooled approximately 70% to 80%
of tribal trust funds managed by the Department of the Interior into short-term jumbo CDs
in banks nationwide, which had a maturity of one year or less. Plaintiffs’ liability expert,
Mr. Nunes, testified at trial that during the 1980s, the BIA had a “blanket kind of approach
to all Indian funds that we saw,” which was to invest tribal trust funds in “very short term
and almost entirely in their CD program.” Defendant’s liability expert, Dr. Starks, similarly
testified at trial that:

[I]n the 1980s, the primary investments were into certificate of deposits, and
the -- the Government had this unique CD program in which they pooled the
money from a lot of different tribes and invested it in bank CDs all over the
country, and because of the pooling, they were able to buy very large CDs.

According to the trial testimony of defendant’s liability expert, Dr. Starks, the
general maturities of the BIA’s CD investments “were usually one year or less.” By pooling
tribal trust funds, as Dr. Starks testified at trial, the BIA was able to achieve higher returns
while ensuring that the tribal trust funds remained protected against any bank failures. Dr.
Starks also testified at trial that the returns on the CDs were generally comparable to two-
to three-year Treasury bonds.

Also, in 1983, 1984, and 1989, the Department of the Interior consulted with
various private investment firms and received three investment proposals from outside
firms with recommendations on how to improve the Department of the Interior’s
investment of its tribal trust funds. BIA received (1) a joint proposal from the American
Indian National Bank (AINB) and Lehman Management Company (Lehman), (2) Security
Pacific National Bank (Security Pacific), and (3) PricewaterhouseCoopers (PWC).6 None
of the firms proposed specific investment strategies for any particular tribal trust fund,
including the tribal trust funds at issue in the above-captioned case, but instead
recommended general investment strategies for tribes which had immediate cash flow
needs and for tribes which had longer-term investment horizons. The Department of the
Interior ultimately did not adopt those particular suggestions.

PWC submitted the first, and most in-depth investment proposal, to the
government on December 24, 1983. According to PWC, it conducted “an in-depth review

6 The court notes that although the parties refer to the December 24, 1983 investment
proposal as the “PWC investment proposal,” at the time of the proposal, the company’s
name was “Price Waterhouse.” For consistency, and to follow the lead of the parties, the
court refers to the December 24, 1983 investment proposal as the PWC investment
proposal and refers to the company as PWC.
10
of the management of Indian trust funds,” which consisted of the government’s various
tribal trust funds, “individual Indian monies” (IIM) accounts, “Indian Monies Proceeds of
Labor” accounts, “Contributions,” and the “Alaska Native Escrow Fund. Plaintiffs’ 326-K
Fund was one of various tribal trust funds the government held in trust during the 1980s.
PWC reviewed the BIA’s investment of “Indian trust funds” between 1976 and 1983. The
PWC proposal stated that “there is no evidence that outside money managers would have
improved on the investment performance during the period 1976-1983,” but that moving
forward, “we [PWC] recommend that the Bureau [of Indian Affairs] engage an outside
investment advisor.”

PWC’s December 24, 1983 proposal stated:

In assessing the overall performance of the funds in recent years, we have
found that the BIA Branch of Investments has achieved excellent
investment results relative to other managed portfolios operating under
similar investment authorizations. These recent successes are primarily
attributable to a strategy of investing in short-term assets in the face of
volatile interest rates and to the discovery of federal subsidies implicit in the
pricing of FDIC and FSLIC insured CD’s.

However, as the volatility of interest rates declines, yields will begin to reflect
the relative risks associated with the maturity and underlying credit
characterizing security investments. Further, the subsidies associated with
fdic and fslic securities are under consideration by bank regulators and may
not be available in the future.

(capitalization in original). The PWC investment proposal also noted that the “[w]hile the
BIA investment strategy has worked well in the past, the unusual market conditions of the
recent past,” i.e., that the yield curve for bonds was inverted such that short-term
securities had out-performed longer-term securities for the “last decade,” 1973 to 1983,
“may not continue.” PWC also stated that “there is no guarantee that the current strategy
of investing primarily in highly liquid short-term assets will achieve the same investment
performance relative to other strategies if the capital markets return to traditional pricing
behavior,” which is what the BIA did and achieved for the 326-K Fund from its deposit into
the Treasury on December 19, 1979 until December 24, 1983, the date of the PWC’s
proposal. According to the PWC investment proposal, unlike the “unusual” inverted yield
curve between 1973 and 1983, “[u]nder the traditional yield curve,” meaning that longer-
term investments out-perform shorter-term investments, “investors who assume the risks
associated with long-term securities, are rewarded more than investors who place their
funds in shorter term issues.”

Although PWC concluded that the BIA’s management of the Indian trust funds
between 1976 and 1983 was “excellent,” PWC noted that its “[m]easurement of actual
portfolio performance” of the Indian trust fund “was confounded by an absence of data”
and that PWC had to make various assumptions when analyzing the BIA’s investment
performance during this time. The PWC investment proposal noted that:

11
The current BIA accounting system does not produce periodic reports of
total returns (interest accrued each period plus changes in market value)
for the Indian trust fund portfolios. In order to analyze the performance of
the portfolio, we estimated total portfolio returns based on published returns
earned on the following generic categories of securities comprising the
Indian trust fund portfolios:

o Insured or collateralized Certificate of Deposit (6 months to
maturity)
o Treasury Securities (5 months to maturity)
o U.S. Government Agency Securities (7.1 years to maturity)

The PWC investment proposal stated that “[t]he asset allocation among” the three generic
securities listed above for its analysis of the government’s investment of Indian trust funds
“was assumed to be the actual asset allocation for the IIM portfolio as of August 1983,” a
different type of account than the tribal trust funds at issue in this case.

The PWC investment proposal also provided “numerous recommendations by
which the BIA can adjust to the changing investment environment and provide enhanced
services to the beneficiaries of the trust funds,” which included the recommendation that
BIA “[d]evelop and implement an ongoing process which will assist tribes and individuals
to formulate investment objectives.” The PWC investment proposal recommended to the
BIA a portfolio investment strategy of “passive diversification,” i.e., “[i]nvestment in
securities representing a variety of market sectors, and maturities where such
investments are held to maturity,” in order “to achieve the trust fund investment objectives
as the capital markets begin to reflect the more traditional risk/return relationships.” PWC
included five sample portfolios to illustrate that by using the passive diversification
strategy, “a portfolio of securities can be chosen that will perform better than any single
security in the portfolio.” PWC also explained in its investment report that of the five
sample portfolios, three were “dominant,” meaning that these three portfolios earned the
greatest return for the least risk. The first dominant portfolio was comprised of “10% T-
bills, 30% C.D.’s” and “30% Intermediates, 30% Long Term” and had an “Expected
Return” of 11.20%.7 The second dominant portfolio was comprised of “5% T-bills,” “50%
C.D.’s,” and “25% Intermediates, 20% Long Term,” and had an “Expected Return” of
“10.92%.” The third dominant portfolio was comprised of “20% T-bills, 40% C.D.’s” and
“40% Intermediates,” and had an “Expected Return” of “10.40%.”

Of the non-dominant portfolios, the first was comprised of “22% T-bills, 70% C.D.’s”
and “8% Intermediates,” and had an “Expected Return” of “10.02%.” The second was
comprised of “22% T-bills, 70% C.D.’s” and “8% Intermediates,” and had an “Expected
Return” of “9.90%” The three dominant portfolios, which were expected to experience the

7The PWC investment proposal did not define what constitutes an “Intermediate” security
and what constitutes a “Long-term” security. The PWC investment proposal, however,
noted that “[t]wo-, three-, and five-year notes” were not considered “Long-term bonds.”
12
highest rate of returns from PWC’s five sample portfolios, contained the highest
combination of long-term and intermediate-term securities.

The PWC investment proposal also noted that because the five portfolios
assumed that a typical yield curve, i.e., when longer-term investments out-perform
shorter-term investments, “observed during the period of 1926-1973 would prevail, it is
not surprising that the dominant portfolios (earning the greatest return for least risk)
contained a substantially larger proportion of longer-term securities than we have
observed in the BIA portfolios.”

AINB and Lehman submitted their joint investment proposal to the government on
October 30, 1984 and “jointly” proposed “to organize, manage, and administer a mutual
fund to serve as an alternative investment vehicle for the American Indian Tribal Trust
Funds.” Unlike PWC, AINB and Lehman did not present a review of the BIA’s past
investment of the Indian trust fund in its joint investment proposal, nor commented on
whether the BIA had obtained “excellent” investment results in the past. AINB and
Lehman proposed that the Department of the Interior’s tribal trust funds, depending on
the cash flow needs of a particular tribe, be invested in one of two portfolios. The first
proposed portfolio was a money market portfolio “invested in money market instruments
with maturities not exceeding one year.” The second proposed portfolio was “an
intermediate-term portfolio invested in obligations with maturities not to exceed five years.
Such maturities typically have higher yields than money market instruments.”

Security Pacific discussed its investment recommendations with the government
during an investment meeting in San Diego, California from December 7-8, 1989, and its
recommendations were memorialized in a BIA memorandum dated January 17, 1990.
The BIA memorandum did not discuss whether Security Pacific had conducted a review
of the BIA’s past investment of the Indian trust fund in its investment proposal, nor did the
BIA memorandum comment on whether Security Pacific believed that the BIA’s
investment of the Indian trust fund was “excellent,” as PWC had concluded in its
investment proposal. Security Pacific recommended that the BIA pool together and invest
the largest twenty-five tribal trust funds as follows: 48% of the funds in short-term
securities, 38% of the funds in intermediate-term securities, and 14% of the funds in long-
term securities.8 Security Pacific recommended that the BIA pool together and invest the
remaining tribal trust funds as follows: 61% in short-term securities, 29% in intermediate-
term securities, and 10% in long-term securities.

The BIA memorandum memorializing Security Pacific’s investment
recommendations did not state whether plaintiffs’ 326-K Fund was one of the tribal trust
funds considered by Security Pacific. According to the trial testimony of defendant’s
damages expert, Justin Mclean, plaintiffs’ 326-K Fund would have been among one of
the largest twenty-five tribal trust funds pooled together and invested in Security Pacific’s
proposed portfolio. The 326-A-1 and 326-A-3 Funds, the other two trust funds at issue in

8 The Security Pacific proposal did not define what maturities would constitute a “short-
term” security, an “intermediate” security, or a “long-term” security.
13
this case, were not yet in existence at the time that Security Pacific made its
recommendations to the BIA.

In 1990, the Office of Trust Funds Management was established within the BIA at
the Department of the Interior. The Office of Trust Funds Management consolidated the
accounting and investment functions managing and governing tribal trust funds. As both
parties’ liability experts testified during trial in the above-captioned case, during the early
1990s, the Department of the Interior transitioned from its program of pooling together
and investing tribal trust funds in short-term jumbo CDs to primarily investing tribal trust
funds into other securities with varying maturities, such as agency and Treasury
securities. Plaintiffs’ liability expert, Mr. Nunes, testified at trial that around the early
1990s, the BIA made “a wholesale transition away from the CD program, which ultimately
went away completely, and monies now were being invested in agency securities,
mortgage-backeds, callable bonds, and things like that.” Defendant’s liability expert, Dr.
Starks, testified at trial that “[a]fter about [19]91,” the BIA made a “programmatic” switch
from investing tribal trust funds in jumbo CDs into “agency securities in particular and a
little bit longer term U.S. Treasuries.”

The Department of the Interior’s shift from CDs was reflected in the October 1,
1992 edition of the Office of Trust Funds Management’s quarterly journal “TRUST,”
introduced at trial in the above-captioned by both parties as a joint exhibit. (capitalization
in original). According to the October 1, 1992 journal, the Branch of Investments Chief at
the Department of the Interior, Fred Kellerup, “got OTFM [Office of Trust Funds
Management] on the right road four years ago [in 1988] when the trust funds investment
portfolio began its transformation from CD’s to government securities.” Mr. Kellerup
provided the following advice to tribes in the October 1, 1992 journal: “Stay away from the
long bond. There’s no need for tribes to invest beyond 15 years. You’re too far out if
interest rates turn around. Shorten up on the maturity. Even if you have cash flow needs,
go for the three-to-seven year government securities. Avoid the one-year CDs.”
(emphasis in original).

Also, during the early 1990s, Congress investigated BIA’s management and
investment of the Indian trust fund, comprised of tribal trust funds, such as the three tribal
trust funds at issue in the above-captioned case, and the IIM trust fund. The
Congressional Committee on Government Operations published the results of the
investigation in an April 1, 1992 report, titled “MISPLACED TRUST: THE BUREAU OF
INDIAN AFFAIRS’ MISMANAGEMENT OF THE INDIAN TRUST FUND,” (1992
Congressional Report) introduced at trial in the above-captioned case by both parties as
a joint exhibit. (capitalization in original). The 1992 Congressional Report explained that
the IIM trust fund is “a deposit fund, usually not voluntary, for individual participants and
tribes.” The Department of the Interior’s investment of the IIM trust fund is not at issue in
the above-captioned case. The 1992 Congressional Report also explained that as of April
1, 1992, “the BIA is responsible for managing and investing almost $2 billion in tribal and
individual Indian funds.”

14
The 1992 Congressional Report summarized the BIA’s duty to Indian tribes as a
“fiduciary duty to ‘maximize the trust income by prudent investment.’” (quoting Cheyenne-
Arapaho Tribes v. United States, 206 Ct. Cl. 340, 348, 512 F.2d 1390, 1394 (1975)
(Cheyenne-Arapaho)). The 1992 Congressional Report explained that “[t]his
responsibility requires the Government to stay well-informed about the rates of return and
investment opportunities and to intelligently choose from among authorized investment
opportunities to obtain the highest rate of return to make the trust funds productive.” The
1992 Congressional Report noted that “the Bureau’s fiduciary responsibilities are not
dissimilar to the duties performed by many private trustees” and that:

To fulfill these important obligations it is necessary for the agency to fully
understand both its fiduciary duties and the financial marketplace. Stated
simply these fundamental assignments are: To accurately account to the
beneficiary; to make accounts productive for the beneficiaries; and to
maximize the trust income through prudent investment. To successfully
perform these tasks, the Bureau of Indian Affairs, as any fiduciary, must
conduct itself as a sophisticated investor, a smart shopper, and a highly
diligent and resourceful manager.

Upon review of the BIA’s investment of Indian trust fund, the 1992 Congressional
Report found that the BIA had “longstanding financial management problems in its
administration of the Indian trust fund,” primarily due to a failure to “accurately account
for trust fund moneys.” The 1992 Congressional Report explained that:

Indeed, it [BIA] cannot even provide accountholders with meaningful
periodic statements on their account balances. It cannot consistently and
prudently invest trust funds and pay interest to accountholders. It does not
have consistent written policies or procedures that cover all of its trust fund
accounting practices. Under the management of the Bureau of Indian
Affairs, the Indian trust fund is equivalent to a bank that doesn’t know how
much money it has.

Notably, the plaintiffs in the above-captioned case do not allege that defendant breached
its fiduciary duty by failing to keep accurate records of the plaintiffs’ tribal trust funds or
that the defendant failed to provide plaintiffs with periodic account statements. Plaintiffs,
instead, argued that the defendant invested their three tribal trust funds in too short-term
securities, and, thus, did not maximize the investment return on their tribal trust funds.

Subsequently, Congress passed the American Indian Trust Fund Management
Reform Act, Pub. L. No. 103-412, 108 Stat. 4239 (1994) (1994 Trust Fund Management
Reform Act), which created the Office of the Special Trustee for American Indians (Office
of the Special Trustee) within the Department of the Interior, to be headed by the Special
Trustee. See 1994 Trust Fund Management Reform Act, codified at 25 U.S.C. § 4001 et
seq. According to the 1994 Trust Fund Management Reform Act, the Special Trustee was
to “ensure proper and efficient discharge of the Secretary[] [of the Interior’s] trust

15
responsibilities to Indian tribes and individual Indians.” 25 U.S.C. § 4043(a)(1) (1994).
The 1994 Trust Fund Management Reform Act also recognized that

[t]he Special Trustee shall ensure that the Bureau [of Indian Affairs]
establishes appropriate policies and procedures, and develops necessary
systems, that will allow it-- (i) properly to account for and invest, as well as
maximize, in a manner consistent with the statutory restrictions imposed on
the Secretary’s investment options, the return on the investment of all trust
fund monies . . . .

Id. at § 4043(b)(2)(B) (1994).

The 1994 Trust Fund Management Reform Act also established a nine-member
Advisory Board to assist and advise the Special Trustee with implementation of the 1994
Trust Fund Management Reform Act. In 1996, the Office of the Special Trustee, a
separate office within the Department of the Interior, took over the responsibility of
managing tribal trust funds from the BIA. As the parties jointly stipulate to, on September
11, 1996, the Special Trustee appointed the “OTFM Management Board” to establish an
operating policy to ensure that tribal trust funds were maintained in a proper and prudent
mix and maturity distribution, “represent sound extensions of credit, and are appropriate
assets with regard to legal requirements and needs of the Indian beneficiaries involved.”
(internal quotation marks omitted). The OTFM Management Board, as both parties further
jointly stipulate to in the above-captioned case, became known in April 2005 as the Office
of the Special Trustee Investment Management Committee, and was sometimes referred
to as the “Portfolio Review Committee,” according to the trial testimony of defendant’s
fact witness, Mr. Robert Winter.

Mr. Winter also testified at trial that the Portfolio Review Committee is “a group of
senior officials that are well versed in all of the management functions in OST [Office of
the Special Trustee], that meet with the investment group to review specifics about
investments for all tribal trust funds annually.” Mr. Winter also testified that he became a
member of the Portfolio Review Committee in 2001 and was still a member of the
committee at the time of trial in the above-captioned case. As Mr. Winter explained, the
Portfolio Review Committee would review the account objectives for each tribal trust fund
and whether the tribal trust fund was invested in accordance with the agency’s policies.
According to Mr. Winter’s trial testimony, if the Portfolio Review Committee disagreed with
a particular investment manager’s investment strategy for a specific fund, the Portfolio
Review Committee had the authority to direct the investment manager to change the
investment strategy. With regard to plaintiffs’ 326-K Fund, Mr. Winter noted:

You know, each year this account came up we made sure that we asked
what further information do you have or, you know, certainly knowing
amongst ourselves, we definitely got news of, you know, pending
legislation, legislation that’s been introduced, you know, the possibilities of

16
that legislation passing. So this was definitely a time period[9] when there
were bills being introduced which caused us to, you know, limit it to -- not
limit it to, but to make those maturities around two years.

On February 7, 1997, the Office of the Special Trustee sent a memorandum, which
was introduced by both parties in the above-captioned case as a joint trial exhibit, titled
“OTFM POLICY MEMORANDUM NO. POL97-002” to the Office of Trust Funds
Management Division’s Chiefs, Area Trust Accountants, and Agency Personnel, which
discussed the Office of the Special Trustee’s “Investment Policy” (1997 Office of the
Special Trustee Policy). (capitalization in original). The 1997 Office of the Special Trustee
Policy established “the criteria by which OTFM will manage the Tribal, Individual Indian
Monies, and Special Funds entrusted to it for investment.” Pursuant to the 1997 Office of
the Special Trustee Policy, the “investment activities of OTFM will be conducted to
achieve” three primary objectives. The first objective was “Quality” of the investment
portfolio, which included the “safety of principal, minimization of market risk and overall
risk diversification.” (capitalization and emphasis in original). The second objective was
having some “Liquidity” of investments, meaning that “an adequate percentage of the
portfolio should be maintained in liquid, short-term investments that could be converted
to cash, if necessary, in order to meet the tribal disbursement requirements.”
(capitalization and emphasis in original). The last objective was the “Rate of Return” of
the portfolio. (capitalization and emphasis in original). According to the 1997 Office of the
Special Trustee Policy,

[o]f major importance in all of the OTFM managed portfolios is an
acceptable rate of return over the long term without compromising the other
stated objectives of quality and liquidity. The specific portfolios should be
structured to achieve at least a market-average rate of return throughout
economic cycles, taking into account the specific tribe’s risk constraints and
the cash flow requirements dictated by its use and distribution plans and/or
budget forecasts. Whenever possible, and consistent with risk limitations as
defined herein and prudent investment principles, investment officers shall
seek to augment returns above the market average rate of return.

At trial, defendant’s fact witness, Mr. Winter, explained his understanding of the
1997 Office of the Special Trustee Policy’s Rate of Return objective and his involvement
in reviewing and updating the Office of the Special Trustee’s policies throughout the late
2000s. Mr. Winter testified that he began working at the Office of the Special Trustee in
1998 and that between “2007 and 2011,” he “headed up the Office of Trust Services”
which oversaw the “Office of Trust Funds Investments.” The Office of Trust Funds
Investments, according to Mr. Winter, is “essentially the investing shop at the Office of
the Special Trustee.” Mr. Winter also testified that during his time at the Office of Trust
Services, he was responsible for “developing investment policy and reviewing and

9According to Mr. Winter’s trial testimony, the “time period” referenced was the early
2000s, when Mr. Winter jointed the Portfolio Review Committee and when Congress
began to once again introduce bills for the distribution of plaintiffs’ three tribal trust funds.
17
amending investment policy” for the Office of the Special Trustee, and also to “review the
past policies of the Office of the Special Trustee and even those of its predecessor, the
BIA.” Mr. Winter testified that his understanding of the Rate of Return objective “simply
refers to, in conjunction with ensuring the quality is there and that the cash flows have
been identified and that there will be adequate liquidity within the portfolio, that we should
structure the remainder of the portfolio in such a manner as to achieve above-average
market rates.” Mr. Winter also testified that in order to obtain “above-average market
rates,” as required by the Rate of Return objective contained within the 1997 Office of the
Special Trustee Policy, it was his understanding that “we need to do adequate analysis
of the cash flows in order to ensure that we obtain the highest rates for the maturities that
we select in order to maintain those proper flows.” Mr. Winter testified that the cash flow
analysis differs with respect to different tribal accounts. Mr. Winter testified that regarding
a cash flow analysis for a judgment fund, “where it’s 100 percent per capita payout,” like
plaintiffs’ 326-K Fund at issue in the above-captioned case, “then really all you need to
know is the distribution date.” When asked by defendant’s counsel at trial what the effect
of an uncertain timeline for the distribution of a particular judgment fund would have on
the Office of the Special Trustee’s cash flow analysis, Mr. Winter responded that, “[w]ell,
we certainly try to obtain the most accurate data we can about a particular distribution
date if there’s not one already stated, and, you know, we try to base our maturity schedule
on the earliest available date that that fund might be paid out.”

The 1997 Office of the Special Trustee Policy also listed “ACCEPTABLE
PORTFOLIO INVESTMENTS AND PRACTICES,” which explained, among other
practices, the Office of the Special Trustee’s “‘Holding’ versus ‘Trading’” practice.
(capitalization and emphasis in original). According to the section of the 1997 Office of
the Special Trustee Policy discussing “Holding versus Trading,”

OTFM intends to manage its Indian trust portfolios in a manner that protects
the integrity of the primary function of the portfolio, which is to provide
maximum income for the tribes while conforming to prescribed statutory
limitations and prudent fiduciary investment principles.

Because OTFM has a small number of investment managers responsible
for the investment management of over 1450 separate portfolios, OTFM will
purchase securities with the intent to hold each security until maturity, while
realizing that sales can and may occur prior to maturity form some of the
following reasons:

1. When account review presents obvious opportunity for
portfolio enhancement from the reinvestment of sales
proceeds into comparable maturities thereby improving
yield or quality without adversely affecting overall quality,
mix or maturity of the investment portfolio.
2. The need to improve or increase portfolio liquidity.
3. The need to invest the proceeds of a security maturing
within one year because of an interest-rate scenario that

18
would be detrimental to the performance of the portfolio if
held to maturity before investing, i.e., a rapidly falling
interest rate period.
4. A reduced credit rating of the issuing Agency renders the
security to be of less than acceptable quality to remain in
the portfolio.

The 1997 Office of the Special Trustee’s “Holding versus Trading” section also
noted that “[i]nfrequent investment portfolio restructuring carried out in conjunction with a
prudent overall risk-management plan that does not result in a pattern of gains being
taken and losses deferred will generally be viewed as an acceptable practice within the
context of an investment portfolio.” According to the trial testimony of defendant’s fact
witness, Mr. Winter, the 1997 Office of the Special Trustee’s “Holding versus Trading”
practice meant that,

that we need to purchase securities with the intent and ability to hold to
maturity; and that, secondly, we’re permitted infrequent investment
restructuring if the market conditions present themselves as such, but we
can’t be doing so by establishing a pattern of buying and selling, reaping
gains and losses on any sort of frequency.

According to Mr. Winter, the 1997 Office of the Special Trustee Policy was the “first formal
policy adopted by the Office of the Special Trustee.” Mr. Winter testified at trial that the
Office of the Special Trustee issued amendments to the 1997 Office of the Special
Trustee Policy in 1999, 2000, and 2005, but that these policy amendments, apart from
extending the maturity limits of certain government-backed securities from an “average
life” of ten to fifteen years, were not “material” changes to the 1997 Office of the Special
Trust Policy. Moreover, Mr. Winter testified that the 2005 policy amendment was the
policy in place up until the distribution of the 326-K Fund.

III. The investment market for bonds from the early 1950s to 2013

The parties agree that between the early 1950s up until 1979, the beginning of the
period at issue in the above-captioned case, interest rates on bonds steadily increased,
and that there was an inverted “yield curve.” A “yield curve” displays the relationship
between a bond’s yield and maturity. An inverted yield curve occurs when shorter-term
securities are experiencing higher yields than longer-term securities. For example,
according to Exhibit 6 to defendant’s damages expert report by Dr. Alexander, beginning
around 1958, the 5-year Treasury bond achieved higher returns than the 7-year Treasury
bond or the 20-year Treasury bond, and such was the case until 1979. Plaintiffs did not
contest the accuracy of Exhibit 6 to defendant’s damages expert report.

From December 1979 until 1981, the first three years of the period at issue in the
above-captioned case, interest rates on bonds continued to increase and the yield curve
remained inverted. As defendant’s liability expert, Dr. Starks, testified at trial, the “peak of
interest rates from between 1950 and 2012” occurred in September 1981. Following the

19
September 1981 interest rate peak until September 2013, the end of the period at issue,
the parties agree that the interest rates generally decreased and that bond prices steadily
increased. The parties also agree that following the September 1981 interest rate peak,
but for a few short-lived periods, the yield curve was upward sloping until 2013, the end
of the investment period at issue. An upward sloping yield curve means that longer-term
securities experience higher returns than shorter-term securities.

The parties agree that, the despite the inverted yield curve between the 1950s and
1981, the yield curve for fixed-income securities is typically upward sloping. Plaintiffs’
expert report by Rocky Hill Advisors noted that a “2007 study of the past 80 years found
that in 72 of those years (90% of the time) the yield curve was upward sloping and that,
on average over all of those years, long-term Treasury bonds[10] tended to yield about 1-
1/2% more than short-term Treasury bills.” Defendant did not contest the validity of the
2007 study cited to by plaintiffs in their liability expert report. Plaintiffs’ Rocky Hill Advisors’
expert report also noted:

Generally, the longer the maturity of a fixed-income investment, the higher
will be its coupon interest rate (the contract rate of interest) and potential
return. This is because investors perceive higher risk the further out in time
an investment extends, thus they demand higher returns to compensate for
the additional risk. Although there are periods where this relationship inverts
(that is, interest rates on shorter-term investments exceed those on longer-
term investments), the frequency and duration of such events is de minimis
when compared to the norm.

(footnote omitted). Defendant’s damages expert report, prepared by Dr. Gordon
Alexander, similarly noted that the yield curve is normally upward sloping, stating that
“[g]iven the fact that the yield curve is generally upward sloping, the practical result of this
observation would be to invest primarily in long maturities when monies are expected to
remain invested for longer periods.”

Plaintiffs’ expert report by Rocky Hill Advisors provided a hypothetical which
illustrated that longer-term investments generally would have out-performed shorter-term
investments during the thirty-three-year period at issue in this case. According plaintiffs’
expert report by Rocky Hill Advisors, if an investor were to have invested $1,000.00 in
three separate portfolios beginning in December 1, 1979, the starting month of the
relevant time period in the above-captioned case, and have left that $1,000.00 fully
invested through September 30, 2013, the end date of the relevant period in this case,
the portfolio with the longest-term securities would have achieved the highest rate return.
The three portfolios from the hypothetical are as follows:

10Plaintiffs’ liability expert report does not define what maturities of Treasury securities
would be considered “long-term Treasury bonds.”
20
• Portfolio 1 in a short-term (i.e., an average maturity of about 3 years)
basket of Treasury securities represented by the Barclays 1-5 Year U.S.
Treasury Index;
• Portfolio 2 in an intermediate-term (i.e., an average maturity of about 7.5
years) basket of Treasury securities represented by the Barclays U.S.
Treasury Index; and
• Portfolio 3 in a long-term (i.e., an average maturity of 20+ years) basket of
Treasury securities represented by the Barclays Long-Term U.S. Treasury
Index.

According to the hypothetical, the $1,000.00 in Portfolio 1, the short-term portfolio, would
have grown to $10,154.94 by September 30, 2013. The $1,000.00 in Portfolio 2, the
intermediate-term portfolio, would have grown to $13,720.07 by September 30, 2013. The
$1,000.00 in Portfolio 3, the long-term portfolio, would have grown to $20,868.30 by
September 30, 2013.

Defendant’s damages expert report by Dr. Alexander referred to a hypothetical
similar to the hypothetical included in plaintiffs’ expert report by Rocky Hill Advisors.
Defendant’s damages expert report looked at three $1,000.00 portfolios from 1979 to
2013. The first portfolio was invested in 5-year Treasury bonds, the second portfolio was
invested in 7-year Treasury bonds, and the third portfolio was invested in 20-year
Treasury bonds. The $1,000.00 invested in 5-year Treasury bonds grew the least, to
approximately $14,000.00. The $1,000.00 invested in 7-year Treasury bonds grew to
approximately $15,500.00. The $1,000.00 invested in the 20-year Treasury bonds grew
the most, to approximately $21,000.00.

Additionally, plaintiffs’ rebuttal expert witness, Dr. Goldstein, illustrated in his
rebuttal expert report that, with regard to the 326-K Fund, a “simple buy-and-hold strategy
that invested” plaintiffs’ 326-K Fund “in 10-year U.S. Treasuries,” from 1979, when the
326-K Fund was deposited into the United States Treasury, through 2004, when
Congress passed the distribution plan legislation for plaintiffs’ tribal trust funds, and “then
rolling [the 326-K Fund] into 1-year U.S. Treasuries,” from 2005 until 2013, the end of the
period at issue, the government would have experienced higher returns than what it
actually achieved. According to Dr. Goldstein’s calculations, “had the BIA simply followed
a mechanical strategy of investing in 10-year U.S. Treasuries, it would have ended the
period with an additional $72 million above what it did under its chosen strategy.” Dr.
Goldstein did the same exercise “with 20-year U.S. Treasuries” and “[u]nder this simple
strategy, the WSIG [Western Shoshone Identifiable Group] account would have held an
additional $179 million.” Dr. Goldstein noted in his report that “I stress that these are not
damages estimates, which I have not been asked to provide. The figures are just a clear
way to illustrate the benefits of locking in typically higher long-term rates over the relevant
period.”

21
IV. The Department of the Interior’s investment of the 326-K Fund

The period at issue regarding the government’s investment of the 326-K Fund was
from December 19, 1979, the date on which the ICC’s initial award payment of
$26,145.189.89 was deposited into the United States Treasury, until September 30, 2013,
the last date for which the Trust Account Database (TAD), the government’s electronic
account database, reported account information for the 326-K Fund. According to the trial
testimony of plaintiffs’ liability expert, Mr. Nunes, the TAD is “a compilation of several sub-
databases that include information regarding the different accounting systems the
Government had and the coding that they used to identify, you know, what a transaction
was. It includes from 1972 -- from July 1, 1972, forward” a “compendium of all the
transactions that went through an account, and then there’s a lot of descriptive and other
data that’s in there as well.” Mr. Nunes also testified at trial that the government provided
plaintiffs with access to the TAD for plaintiffs’ three tribal trust funds for the period at issue,
December 1979 through September 2013. Both of the parties’ liability experts relied on
the TAD when re-constructing the investment performance of plaintiffs’ 326-K Fund
between December 1979 and September 2013 in their respective liability expert reports
and damages expert reports. Both parties do not contest the data reflected in the TAD for
the 326-K, 326-A-1, and 326-A-3 Funds.

The initial amount of the 326-K Fund, when deposited in the United States
Treasury on December 19, 1979, was $26,145,189.89. Before the first distribution
payment of the 326-K Fund was issued in 2011 to 3,187 individuals, the 326-K Fund
balance had grown to approximately $183,794,000.00. According to defendant’s opening
statement at trial, between December 1979 until the first distribution of the 326-K Fund in
2011, the 326-K Fund experienced an average annual return of 6.8%, the accuracy of
which plaintiffs did not contest. The final distribution payments of the 326-K Fund were
made on September 29, 2012 and October 2, 2012. As of September 2013, the last date
for which data was available regarding the government’s investment of the 326-K Fund,
a residual amount of approximately $36,000.00 remained in trust by the government.
Plaintiffs’ counsel explained at the trial closing argument that plaintiffs are not seeking to
recover the residual amount of $36,000.00 in the above-captioned case. Plaintiffs’
counsel did not clarify why $36,000.00 remained in the government’s account. Plaintiffs’
counsel at closing argument stated that a potential reason for the residual amount left in
trust with the government was because “maybe you haven’t identified a recipient or
there’s been some glitch, something like that.”

As previously indicated, the parties primarily disagree as to whether the
government invested the 326-K Fund in too short-term securities, and, thus, potentially
did not maximize the returns for the 326-K Fund. Plaintiffs do not allege that the
government misappropriated funds from the plaintiffs or that the government invested the
326-K Fund in securities prohibited by law or regulation.

22
The maturity structure of the 326-K Fund

In their liability expert reports, and at trial, both parties discussed the “average
weighted maturity” of the 326-K Fund. According to the trial testimony of defendant’s
liability expert, Dr. Starks, the “average weighted maturity” is based on the maturity of all
the securities in which the 326-K Fund was invested in at a given time. Dr. Starks testified
that the maturity is then viewed as a “weighted average” based on the “value” that the
securities “are in their portfolio, so that if you have an investment that’s very short term
and is, you know, 50 percent of the portfolio, then it’s going to be lower overall and vice
versa.” Plaintiffs argued that the average weighted maturity of the 326-K Fund throughout
the thirty-three-year period at issue was too short- term, and, therefore, the 326-K Fund
was imprudently invested. Defendant argued to the contrary.

At trial, the parties discussed three different methods for analyzing the average
weighted maturity of the 326-K Fund. The first method calculated the average weighted
maturity of the 326-K Fund based on the securities’ stated years to maturity. For example,
a ten-year bond has a stated ten-year maturity. The second method calculated the
average weighted maturity of the 326-K Fund based on the securities’ “years to call,”
which uses the call date of callable securities in which the government invested the 326-
K Fund. According to the trial testimony of plaintiffs’ liability expert, Mr. Nunes, a callable
security is a security for which the issuer retains the right to call the security back before
maturity by a specific “call” date. Therefore, if an issuer exercises its right call back a ten-
year callable bond after five years following its issuance, then the ten-year bond’s maturity
would be five years. The parties’ liability experts agreed in their respective expert reports
that the government began to invest the 326-K Fund in callable securities beginning in
the early 1990s. According to the trial testimony of plaintiffs’ liability expert, Mr. Nunes,
approximately 85% of the callable securities in which the 326-K Fund was invested were
called back, which defendant did not contest. Even though only approximately 85% of the
callable securities chosen by the government for the 326-K Fund were called back, both
of the parties’ liability experts appear to use the call dates for all callable securities in
which the government invested the 326-K Fund when calculating the average weighted
maturity based on years to call.

The third method discussed by the parties based the average weighted maturity of
the 326-K Fund on the call dates of the callable securities and made an adjustment for
the prepayment of mortgage-backed securities. Mortgage-backed securities, as
explained in plaintiffs’ rebuttal expert report by Dr. Goldstein,

are asset backed securities backed by mortgages and include pass-through
securities (such as those from GNMA [Government National Mortgage
Association], FNMA [Federal National Mortgage Association], and FHLMC
[Federal Home Loan Mortgage Corporation]) and Collateralized Mortgage
Obligations (“CMOs”). Pass-through securities such as those from GNMA,
FNMA, and FHLMC differ from normal bonds in that the principal value of
the bond is amortized and thus paid off over time, rather than just at the
time of maturity, so that each payment over the life of the mortgage-backed

23
security contains some principal repayment. As such, the stated maturity of
pass-through securities is not representative of the expected, or average,
life of the investment. Some mortgage-backed securities, such as CMOs,
are often also divided into tranches, each with a different level of risk. Higher
tranches (such as tranche A) have their principal paid back first, whereas
later tranches have to wait longer hence have a longer expected life.

(footnotes omitted). According to plaintiffs’ rebuttal expert report, “in the 1990s,” the
government invested the 326-K Fund “into mortgage backed securities where the average
or expected life is notably shorter than the stated maturity. As a result, the actual weighted
maturity of the fund,” even “after considering the impact of callable bonds,” would be
“overstated” if not adjusted for the pre-payment of various mortgage-backed securities.
Similar to plaintiffs’ rebuttal expert report regarding the government’s use of mortgage-
backed securities, defendant’s liability expert, Dr. Starks, testified at trial that the
government began investing in mortgage-backed securities during the early 1990s, and
that, “what’s important about mortgage-backed securities is, especially in a falling interest
rate environment, people refinance their homes, and so -- so you -- you usually don’t get
the maturity you think you’re going to get because it can be paid off early.”

Although the parties discussed the pre-payment mortgage issue, neither party
presented at trial, or, in their expert reports, an accurate and complete calculation of the
average weighted maturity of the 326-K Fund taking into account the pre-payment issue.
Defendant’s liability expert, Dr. Starks, presented at trial her attempt to account for the
pre-payment issue in defendant’s Demonstrative Exhibit 10,11 a line graph depicting the
326-K Fund’s average weighted maturity based on (1) the stated maturity, (2) years to
call, and (3) years to call with an adjustment for the pre-payment issue. Dr. Starks,
however, admitted at trial that her attempt was not the most accurate because she “throws
out the mortgage-backed securities because of the prepayment issue” from her
calculations, and, thus, undercalculates the average weighted maturity of the 326-K Fund.
Plaintiffs did not present at trial any calculation of the average weighted maturity of the
326-K Fund which accounted for the pre-payment issue.

When analyzing the average weighted maturity of the 326-K Fund, the court will
rely on the average weighted maturity based on the years to call. This method, as both
parties agreed, more accurately depicts the maturity structure of the 326-K Fund than the
average weighted maturity based on the stated years of maturity. As plaintiffs’ counsel
noted at closing argument, “Dr. Starks [defendant’s liability expert] and Mr. Nunes
[plaintiffs’ liability expert] agree[]” that “the stated years to maturity was not as accurate
when you’re dealing with callable bonds, because it was more accurate to use the call
date.” Dr. Starks, defendant’s liability expert, testified at trial that only considering the
stated years to maturity of the 326-K Fund would make the 326-K Fund maturity structure
appear a “little too long,” because the government had invested in callable bonds that
were called back before maturity. Mr. Nunes, plaintiffs’ liability expert, similarly testified at

11 Both parties’ counsel used various demonstrative exhibits throughout trial, which were
all introduced and accepted into the trial record.

24
trial that relying only on the stated years to maturity when calculating the average
weighted maturity of the 326-K Fund, “actually makes the portfolio look like it has a longer
structure than it actually does” because “almost entirely” all of the government’s callable
bonds were called back. The court is aware that the average weighted maturity based
only on years to call does not take into account the pre-payment of the mortgage-backed
securities. The record before the court, however, does not contain an accurate depiction
of the weighted average maturity, taking into account the pre-payment issue of mortgage-
backed-securities for the 326-K Fund, and the actual calculations to analyze the
performance of the 326-K Fund, taking into account the pre-payment issue, remain
somewhat elusive and speculative.

According to both parties’ liability expert reports, which relied on the government’s
data from the TAD, beginning in December 1979 to approximately December 1991, the
average weighted maturity years to call of the 326-K Fund never exceeded two years,
and during most of this period, the average weighted maturity was one year or less.
Beginning in December 1991 until September 1993, the average weighted maturity years
to call increased, reaching a peak of a little less than ten years. Following this peak in
September 1993, until May 2002, the average weighted maturity years to call steadily
decreased, reaching a low of approximately less than one year in May 2002. Then, from
June 2002 until approximately early-2008, the average weighted maturity years to call
fluctuated between a less than one year and slightly more than two years. Beginning
around mid-2008 until December 2010, the average weighted maturity years to call
fluctuated, starting around two and a half years, increasing to almost three years, and
then dropping back down to approximately one year. Beginning in early-2011, when the
government began to distribute the 326-K Fund to qualifying members of Western
Shoshone tribes, the government effectively liquidated the 326-K Fund such that the
average weighted maturity years to call decreased to an all-time low of almost zero years
of maturity and flatlined at almost zero years of maturity until September 2013, the end of
the time period at issue.

As a visual aid of the 326-K Fund’s average maturity structure throughout the thirty-
three-year period at issue, defendant’s Demonstrative Exhibit 10, which was introduced
at trial during defendant’s direct examination of defendant’s liability expert, Dr. Starks,
and used by plaintiffs’ counsel during their cross-examination of Dr. Starks, is displayed
below. Defendant’s Demonstrative Exhibit 10 is titled “Maturity of WSJF [Western
Shoshone Judgment Funds]12 portfolio varies over time” and contains three separate
lines. The top most line, which was colored gray, displays the average weighted maturity
of the 326-K Fund based on the stated years to maturity. The middle line, which was
colored a light blue, depicts the average weighted maturity of the 326-K Fund, based on
the call dates of the securities, and is the line which the court looks to in this Opinion. The

12As the Western Shoshone Claims Distribution Act, Pub. L. No. 108-270, 118 Stat. 805
(2004) (the Claims Distribution Act of 2004), the act which created the distribution
mechanism for the three funds at issue, states, the “Western Shoshone Judgment Funds”
refers to the 326-K Fund. The “Western Shoshone Joint Judgment Funds” refers to the
326-A-1 and 326-A-3 Funds.
25
bottom line, which was colored dark blue, displays the average weighted maturity of the
326-K Fund, based on the call dates of the securities and which did not include any
mortgage-backed securities in order to account for the mortgage-backed security
prepayment issue. As previously discussed, defendant’s attempt to account for the pre-
payment issue in Demonstrative Exhibit 10 would distort the average weighted maturity
of the 326-K Fund and is not considered by this court. At trial, plaintiffs did not contest
Demonstrative Exhibit 10’s representation of the average weighted maturity of the 326-K
Fund based on the stated years to maturity, which was colored gray in Demonstrative
Exhibit 10, or the years to call, which was colored light blue in Demonstrative Exhibit 10.13
In addition, both parties agree that the years to call, the middle line, which was colored a
light blue, is a more accurate indicator than the years to maturity, the top line, which was
colored gray.14

13Plaintiffs contested Demonstrative Exhibit 10’s depiction of the average weighted
maturity of the 326-K Fund that was adjusted to account for the pre-payment issue, which
was colored dark blue.
14 Demonstrative Exhibit 10 displays only one line between December 1979 and
December 1991. This is because, as defendant’s liability expert, Dr. Starks, testified to at
trial, the 326-K Fund was not invested in any callable bond or mortgage-backed securities
during this time, and, therefore, the average weighted maturity of the fund was the same
whether one considered the years to maturity, the years to call, or whether there was any
adjustment made for the pre-payment of mortgages.
26
27
The types of securities in which the government invested the 326-K Fund

According to both parties’ liability expert reports, which relied on the government
data in the TAD, from 1979 to 1989, the government invested the 326-K Fund almost
solely in jumbo CDs, with a small portion of the 326-K Fund invested in agency, Treasury,
and “overnight” securities. According to the trial testimony of Mr. Winter, one of
defendant’s fact witnesses and director of Trust Operations at the Office of the Special
Trustee at the Department of the Interior, overnight securities are highly “liquid” “one-day”
securities that are invested and redeemed “the very next day.” In the early 1990s,
although the government continued to invest a portion of the 326-K Fund in CDs, the
government began investing the 326-K Fund in a combination of agency securities,
Treasury securities, mortgage-backed securities, and overnight securities. Some of the
securities selected by the government beginning in 1991 were callable securities.
Notably, by June of 1995, the government was no longer investing any of the 326-K Fund
in CDs. From June 1995 until July 2011, the government invested the 326-K Fund in a
mixture of agency securities, Treasury securities, mortgage-backed securities, non-
government securities, and overnight securities. Beginning in August 2011, the
government invested the 326-K Fund solely in overnight securities.

V. The Department of the Interior’s investment of the 326-A-1 and 326-A-3
Funds

The investment period at issue for the 326-A-1 Fund was from March 25, 1992,
when the judgment award of $823,752.64 was deposited into the United States Treasury,
until September 30, 2013. The investment period at issue for the 326-A-3 Fund was from
September 15, 1995, when the judgment award of $29,396.60 was deposited into the
United States Treasury, until September 30, 2013, the last date for which the TAD, the
government’s electronic account database, reported account information for the 326-A
Funds. The government did not co-mingle the 326-A-1 Fund with the 326-A-3 Fund and
kept them in separate investment accounts. As discussed in more detail below, defendant
did not present any evidence at trial regarding the 326-A-1 and 326-A-3 Funds because,
according to defendant, plaintiffs do not have standing to assert a breach of trust with
regard to the 326-A-1 and 326-A-3 Funds. Throughout trial and in post-trial briefing,
plaintiffs’ counsel, and plaintiffs’ experts, Mr. Nunes and Dr. Goldstein, referred to the
326-A-1 and 326-A-3 Funds together as the “326-A Funds.” Thus, for purposes of this
Opinion, the court will discuss the investment performance of the 326-A-1 and 326-A-3
Funds together. By September 30, 2013, according to the TAD, the balance of the 326-
A-1 and 326-A-3 Funds had grown to a total of $2,022,891.50.

The maturity structure of the 326-A-1 and 326-A-3 Funds

The only party to present evidence at trial regarding the maturity structure of the
326-A-1 and 326-A-3 Funds were plaintiffs, who based their maturity calculations from
data from the TAD. At trial, plaintiffs’ liability expert, Mr. Nunes, testified that, as with the
326-K Fund, the government called back approximately 85% of the callable bonds in
which the 326-A-1 and 326-A-3 Funds were invested. As with the 326-K Fund, Mr. Nunes

28
also testified at trial that the average weighted maturity of the 326-A Funds, based on the
years to call, more accurately displays the maturity structure of these two funds than the
average weighted maturity based on the stated years to maturity. For purpose of this
Opinion, when discussing the maturity structure of the 326-A-1 and 326-A-3 Funds, the
court, therefore, refers to the average weighted maturity years to call.15

Between the deposit dates for the 326-A-1 Fund, which occurred on March 25,
1992, and the 326-A-3 Fund, which occurred on September 15, 1995, and August 1999,
the average weighted maturity years to call for the 326-A-1 and 326-A-3 Funds was
approximately three years or less. Then, around September 1999, the average weighted
maturity years to call for the 326-A-1 and 326-A-3 Funds spiked to approximately six
years. The 1999 spike in maturity was relatively short-lived. The average weighted
maturity years to call of the 326-A Funds fluctuated between five and seven years until
September of 2001, when the average weighted maturity years to call for both A Funds
decreased to less than one year. For the next eight years, from October 2001 to February
2009, the average weighted maturity years to call for both A Funds did not exceed three
years. Around March 2009, the average weighted maturity years to call for the 326-A-1
and 326-A-3 Funds spiked to a high of approximately ten years and then immediately
began to decrease, reaching an average weighted maturity years to call of five years by
August 2009. Between September 2009 to February 2012, the average weighted maturity
years to call for the 326-A-1 and 326-A-3 Funds fluctuated between approximately five
and eight years. Around February 2012, the average weighted maturity years to call for
the 326-A-1 and 326-A-3 Funds, increased to fourteen years and began to decrease
around December 2012, reaching an average weighted maturity years to call of eleven
years. The average weighted maturity years to call for the 326-A-1 and 326-A-3 Funds
remained at approximately eleven years until September 2013, the end of the time period
in question.

As a visual aid of the 326-A-1 and 326-A-3 Funds’ maturity structure throughout
the twenty-one-year period at issue, plaintiffs’ Demonstrative Exhibit 14, introduced at
trial, is displayed below. Plaintiffs’ Demonstrative Exhibit 14 contains two separate lines.
The top line of the graph, which was colored blue, depicts the average weighted maturity
based on the stated years of maturity. The bottom line of the graph, which was colored
red, displays the average weighted maturity for the 326-A-1 and 326-A-3 Funds, taking
into account the call dates for the callable securities and is the line which the court looks
to in this Opinion. Defendant did not contest plaintiffs’ representation of the average
weighted maturity of the 326-A Funds contained in plaintiffs’ Demonstrative Exhibit 14.

15As with the 326-K Fund, the record before the court does not contain data regarding
the average weighted maturity of the 326-A Funds accounting for the pre-payment of
mortgage-backed securities.
29
30
The types of securities in which the government invested the 326-A-1 and 326-A-3 Funds

According to plaintiffs’ expert liability and damages report by Rocky Hill Advisors,
which relied on the TAD, beginning from August 1992, when the government began to
invest the 326-A-1 Fund, until March 1993, the government invested the entire 326-A-1
Fund in jumbo CDs. Around March 1993, the government began to diversify its
investment of the 326-A-1 Fund by decreasing its investment in jumbo CDs and
increasing its investment in agency securities. Then, from 1995, when the 326-A-3 Fund
was deposited into the United States Treasury, until 2011, the government invested both
the 326-A-1 and 326-A-3 Funds primarily in agency securities with a small portion of the
funds invested in overnight securities and Treasury securities. From 2012 until September
2013, the government invested the 326-A-1 and 326-A-3 Funds in a mix of agency
securities, mortgage-backed securities, and overnight securities.

VI. The distribution of the 326-K, 326-A-1 and 326-A-3 Funds

The following facts leading up to distribution of the funds at issue are relevant to
plaintiffs’ breach of trust claim. In 1973, even before the ICC entered its judgment in
Docket 326-K, the BIA was aware that the distribution of any potential judgment award to
the plaintiffs would require advance planning. According to a February 15, 1973 internal
memorandum, the BIA stated that:

[A]lthough the Western Shoshone case as of October 11, 1972 has only
reached the interlocutory stage, it is mandatory that planning begin now in
terms of the identification of beneficiaries, the disposition of the funds and
the dissemination of useful information to interested groups and individuals.
We are aware that the award of $26,154,600, subject to allowable offsets,
may be appealed by either or both parties, but we are in full agreement with
the Agency and the Western Shoshone Claims Committee that early
attention to this case is necessary if we hope to avoid the confusion and the
very time consuming problems encountered with the rather similar Northern
Paiute judgment.

Mr. Nunes, plaintiffs’ liability expert, testified at trial that the distribution of the Northern
Paiute judgment, which was referenced by the BIA in its February 15, 1973 internal
memorandum, had taken approximately sixteen years to execute.

Shortly following the deposit of the 326-K Fund into the United States Treasury,
the BIA put together a research memorandum about the Western Shoshone. According
to the research memorandum, dated March 11, 1980, there a was a significant element
of the Western Shoshone who, “[f]or many years,” opposed any monetary award in the
Western Shoshone Identifiable Group’s case on Docket No. 326-K, which was litigated
before the ICC regarding the Western Shoshone Identifiable Group’s claim for title to
aboriginal lands. This faction of Western Shoshone believed that their ancestral lands in
Nevada were never ceded over to the government or taken by the government. They,
therefore, believed that granting of the 326-K award “would deprive all Western Shoshone

31
of the land itself or at least jeopardize their claim to such land.” The March 11, 1980
research memorandum also recognized that “[t]he Western Shoshone entities were and
are extremely scattered,” and that “[i]t is not possible to describe the Western Shoshone
in terms of forming a tribe or group of organized tribes.” Nonetheless, the March 11, 1980
memorandum identified the following entities as the Western Shoshone beneficiaries of
the 326-K Fund located in Nevada:

1. Temoak Bands of Western Shoshone Indians (Elko, Battle Mountain,
South Fork and. Wells)
2. Shoshone-Paiute Tribes of the Duck Valley Reservation
3. Duckwater Shoshone Tribe of the Duckwater Reservation
4. Yomba Shoshone Tribe of the Yomba Reservation
5. Ely Indian Colony
6. Reno-Sparks Indian Colony
7. Paiute-Shoshone Tribe of the Fallen Reservation and Colony
8. Fort McDermitt Pauite and Shoshone Tribes of the Fort McDermitt Indian
Reservation
9. Walker River Pauite Tribe of the Walker River Reservation
10. Lovelock Paiute Tribe of the Lovelock Indian Colony

The March 11, 1980 memorandum also identified the following entities as the Western
Shoshone beneficiaries of the 326-K Fund located in California:

1. Owens Valley Paiute-Shoshone Band of Indians (Bishop, Big Pine, Fort
Independence and Lone Pine Reservations),
2. Death Valley Timbi-Sha Shoshone Band.

Despite the divisions of interests and different positions among the Western
Shoshone, the BIA attempted to work with the Western Shoshone to submit a distribution
plan to Congress for approval within the 180-day statutory timeline, as required under the
Use and Distribution Act of 1973. For example, on February 23, 1980, representatives
from the BIA and Western Shoshone individuals met in Elko, Nevada. At the meeting, the
“Western Shoshone Planning Committee” was officially formed to elicit distribution
proposals from the various tribal groups of the Western Shoshone. This committee
consisted of “about 10 [individuals]” from various tribal groups with the possibility of an
additional three individuals, two of whom would be from Californian Shoshone tribal
groups.

The BIA’s willingness to move forward with a distribution plan, however, was
temporarily slowed down by the August 25, 1980 Order granting an injunction in United
States v. Dann, Civil No. R-74-60, Order (D. Nev. Aug. 25, 1980) before the United States
District Court for the District of Nevada. In United States v. Dann, the United States had
sued Mary Dann and Carrie Dann, two sisters, who were members of an autonomous
band of the Western Shoshone, for trespass, alleging that the sisters, in grazing livestock
without a permit from the United States, were acting in violation of regulations issued by
the Secretary of the Interior. The sisters denied that they were trespassing, affirmatively

32
asserted their beneficial ownership of the land, and argued that their aboriginal title to the
land precluded the United States from requiring grazing permits. In United States v. Dann,
Judge Thompson found that the December 6, 1979 judgment in the ICC Docket 326-K
was the date that Western Shoshone’s title to the Nevada land was extinguished, as
opposed to July 1, 1872, the date to which both the Western Shoshone Identifiable Group
and the government had stipulated was the takings date of the Western Shoshone
Identifiable Group’s land before the ICC in Docket 326-K. Judge Thompson also enjoined
the Dann sisters from using the lands located in Nevada, which the sisters had alleged
belonged to them, as a basis to allow their livestock to graze upon, without first complying
with the requirements of the Taylor Grazing Act of 1934, Pub. L. 73-482. Steve Feraca, a
Tribal Services Specialist for the BIA, wrote in a memorandum to the Chief of the Division
of Tribal Government Services for the BIA, dated May 6, 1980:

In view of the [April 1980 district court] Thompson decision which cites a
new taking date, December 6, 1979, I said that I could not recommend that
a proposal for the funds be prepared until legal advice was forthcoming from
the Solicitor [of the Department of the Interior] and the Department of
Justice.

On May 23, 1980, BIA reviewed the April 25, 1980 Order issued in Dann and
decided to try to move forward with preparing a distribution plan. The BIA concluded that
the April 25, 1980 Dann Order “in no way affects the mandate of the 1973 Indian
Judgment Funds Act,” and that “[w]e appreciate that it is possible to meet the statutory
deadlines,” for submitting a distribution plan.

On June 20, 1980, the then Department of the Interior, Acting Deputy Assistant
Secretary for Indian Affairs, Ralph Reeser, made a formal request to the United States
Senate Select Committee on Indian Affairs for a 90-day extension of the 180-day period
to submit a distribution plan to Congress. According to Mr. Reeser’s letter, “the 180-day
period for the submittal of a Secretarial plan ended on June 16, 1980.”

On July 26, 1980, the BIA held a public hearing for Western Shoshone members
to discuss a potential distribution plan for the 326-K Fund. According to an August 1, 1980
article published in the Native Nevadan, 85 individuals testified or submitted written
statements at the July 26, 1980 public hearing regarding the distribution plan for the 326-
K Fund. According to the article, the majority of the individuals who testified were opposed
to immediate distribution of the funds. The article stated:

In Summary, the majority of people who testified wanted the award money
to be placed in an interest-bearing account until such times as the title issue
is legally resolved. Those who testified in favor of an immediate distribution
favored a 100 percent per capita distribution, with the 1/4 degree eligibility
requirement.

William Robert McConkie, the BIA official leading the July 26, 1980 public hearing
wrote a memorandum for his files, dated August 3, 1980, regarding his experience at the

33
public hearing. According to Mr. McConkie, there appeared to be disagreement among
those that testified regarding the distribution plan, but such disagreement was allegedly
staged by three lawyers representing certain Western Shoshone groups. Mr. McConkie
wrote:

Eighty persons testified. The hearing was adjourned at 5:30 p.m. The three
lawyers were quite disruptive during the proceedings. They each
represented essentially the same group. The Planning Committee had no
lawyer. It was the apparent purpose of the lawyers opposed to the
distribution to prevent the hearing, or secondarily to control the hearing and
have their people discuss the various Federal District Court suits which
dealt with obtaining the land rather than the judgment from the Court of
Claims. Mrs. Carrie Dan [sic] was escorted from the hall after about 6 or 7
minutes testimony by herself. She refused to limit her remarks and I directed
a tribal policeman to escort her into the lobby.

On August 4, 1980, Congress denied BIA’s requested 90-day extension to submit
a distribution proposal for the 326-K Fund. Senator John Melcher, Chairman of the Select
Committee on Indian Affairs, wrote to Ralph Reeser, Department of the Interior, Acting
Deputy Assistant Secretary for Indian Affairs, on August 4, 1980, noting that “[a]s a
general rule, such extensions are routinely granted upon Departmental request. However,
there are several factors which weigh against granting the extension in this case,”
including that “a significant number of Western Shoshone people oppose acceptance of
the award at this time,” and that,

[t]here is pending litigation in the case of U.S. v. Dann in the U.S. District
Court for the district of Nevada in which title to certain land and the date of
compensable taking are still in issue. The outcome of that case could clearly
have a strong bearing on the course of action the Congress, the Department
and the Western Shoshone people might wish to pursue.

(underline in original). Mr. Melcher concluded by noting that “I trust the Department will
submit appropriate legislation early in the 97th Congress.”

Following Congress’s denial of the BIA’s request for a 90-day extension on August
4, 1980, the BIA worked with the Western Shoshone to get a draft distribution plan ready
to submit to Congress. Although the BIA continued to work with the Western Shoshone,
the BIA was aware that actually submitting a plan to distribute the 326-K Fund to
Congress would likely have to await the outcome of the Dann sisters’ appeal of the August
25, 1980 District Court Order in United States v. Dann, in which Judge Thompson
established a takings date of the Western Shoshone’s Nevada land as December 7, 1979.
See United States v. Dann, Civil No. R-74-60, Order.

On December 30, 1980, Jay Suager, the Acting Director of the Office of Indian
Services at the BIA wrote to Senator Alan Cranston of California, stating:

34
[A] significant faction among the Western Shoshone people rejects the
award and is seeking title to the land. In particular, this faction is supporting
the continuance of litigation in United States v. Dann which pertains to
Western Shoshone land title issues. Probably, all interested parties will
have to await the outcome of the appeal in the Dann litigation.

The Secretary of the Interior, pursuant to direction of the Act of October 19,
1973, 87 Stat. 466, undertook, through the Commissioner of Indian Affairs,
to prepare a plan for the distribution of the judgment funds within 180 days
of the appropriation of those funds. Such plan was not completed. A request
for a 90-day extension . . . was denied by the Senate Select Committee on
Indian Affairs. Accordingly, under the 1973 Act authorizing legislation will
be necessary before there may be any distribution of the judgment funds.
That should present sufficient opportunity to address questions which may
be raised by United States v. Dann.

As of August 20, 1981, approximately one year after Congress denied the BIA’s
90-day extension, an internal government memorandum sent from Kenneth Payton, the
BIA Acting Deputy Assistant Secretary for Indian Affairs, to the BIA Phoenix Area Director,
stated:

Primarily due to the status of the Dann litigation, in which some Western
Shoshone people assert title to a vast portion of Nevada, the Senate Select
Committee on Indian Affairs denied an extension of the date for the
submittal of a Secretarial plan. The case is on appeal. If the plaintiffs’
assertions are denied, we will then propose legislation. The existence of the
Dann litigation, however, does not inhibit further discussion with the eligible
Western Shoshone entities on the programing potential of these funds. On
the contrary, such possibilities can be thoroughly examined and proposals
developed during this time. This subject was considered at previous general
Western Shoshone meetings and with the individual tribes prior to the
Hearing of Record of July 26, 1980.

On January 22, 1982, in an internal BIA memorandum sent from the BIA Deputy
Assistant Secretary for Indian Affairs to the BIA Phoenix Area Director, the BIA Deputy
Assistant Secretary stated that, “we should now begin working with the beneficiaries on
the development of the legislation which will be required in this instance.” The BIA Deputy
Assistant Secretary also stated in the January 22, 1982 memorandum:

To be kept in mind during this process is the fact that the actual introduction
of legislation may not be possible until the Dann litigation is completed.
However, this should not preclude beginning the process of working with
the tribes to clarify their desires with respect to programming and to initiate
appropriate planning with them providing such technical assistance as
requested and as resources permit.

35
The January 22, 1982 memorandum also amended the results of the BIA’s
research report, dated March 11, 1980, which had originally listed twelve beneficiary
groups for the 326-K Fund, reducing the number of beneficiaries of 326-K Fund to the
following four groups:

1. Te-Moak Bands of Western Shoshone Indians (which includes the Elko,
Battle Mountain, South Fork and Wells bands),
2. Duckwater Shoshone Tribe of the Duckwater Reservation,
3. Yomba Shoshone Tribe of the Yomba Reservation,
4. Ely Indian Colony.

The January 22, 1982 memorandum also stated that the “remaining beneficiaries consist
of all other persons of Western Shoshone ancestry, in their individual capacity, who
otherwise meet the criteria detailed in the March 11, 1980, Results of Research Report.”

On May 11, 1982, the BIA Phoenix Area Director held a meeting with leaders of
the Te-Moak Bands, Duckwater, Yomba, and Ely Indian Colony, the four recently
identified beneficiary groups of the 326-K Fund. Following the May 11, 1982 meeting,
Thomas Luebben, an attorney representing the Western Shoshone Identifiable Group,
wrote to the BIA Phoenix Area Office on May 25, 1982 “to confirm the understandings”
reached between the Phoenix Area Office and the Western Shoshone Tribal leaders,
which included, in relevant part, the leaders’ request for “[a] commitment from the BIA to
not begin compiling a descendancy roll in anticipation of distribution of the Western
Shoshone judgment.” Mr. Luebben’s May 25, 1982 letter also requested from the BIA:

A commitment from the BIA that the Interior Department will not attempt to
draft legislation to distribute the Western Shoshone judgment prior to an
actual written agreement between representatives of the United States and
a Western Shoshone negotiating team (including primarily representatives
of Western Shoshone tribal governments) on an appropriate draft of
proposed legislation to achieve an overall settlement of Western Shoshone
land claims and provide for distribution of the judgment funds.

On June 8, 1982, the BIA Phoenix Area Director responded to Mr. Luebben’s May
25, 1982 letter in writing, stating that with regard to the descendancy roll request, “[s]ince
we cannot develop any kind of roll for distribution purposes without an approved plan, we
have no problem agreeing to this.” With regard the draft legislation request, the BIA
Phoenix Area Director responded:

As far as draft legislation for the distribution of the Western Shoshone
judgment, we can decide our course of action within the Area, however, we
cannot make a commitment for the Central Office or the Department. We
expect any legislation developed would have the direct input of the affected
Tribes and individuals that have an interest in the award.

36
On May 19, 1983, the United States Court of Appeals for the Ninth Circuit reversed
the August 25, 1980 District Court Order in United States v. Dann and remanded the case
back to the District Court for further proceedings regarding “factual issues of whether
aboriginal title had been preserved to the date of trial and whether the Danns are entitled
to share in it.” United States v. Dann, 706 F.2d 919, 923 (9th Cir. 1983) (“We reverse the
judgment granting the injunction and remand for further proceedings.”), rev’d, 470 U.S.
39 (1985).

According to a July 28, 1983 internal BIA memorandum, “[s]ince the recent Federal
court decision regarding the Dann case is now widely known, the various entities that
have an interest in the Western Shoshone Land Claim have been actively pursuing their
individual interests.” The memorandum further stated:

The entities we [the BIA] are aware of are: 1. Te-moak Tribe of Western
Shoshone Indians. This groups appears to have a split as to what they want.
. . . 2. Western Shoshone Sacred Lands Association. . . . Their main
contention is that by the Treaty of Ruby Valley, [16] they never lost land title
to their aboriginal lands. The Dann decision [by the Ninth Circuit] appears
to support that premise. . . . 3. Tribal Chairmen Association. . . . I believe
they support land plus money concept. 4. Great Basin Western Shoshone
Descendants. . . . Their main interest is a per capita distribution and have
not really been supportive of the additional land issue. . . . 5. Western
Shoshone Land Federation. This is the newest entity to come upon the
scene, and purportedly represent all of the above entities as a unified
Shoshone group. Since I am not totally aware of what has been negotiated
out among themselves with all of the already described interests, I am
surmising that this group supports the per capita distribution, land return
and tribal program concepts. It is my understanding that it will be through
this group that negotiations with Federal officials to develop a
comprehensive legislative package relative to the Western Shoshone Land
Claim will be conducted.

16 On October 1, 1863, the United States entered into the Ruby Valley Treaty with the
“Western Bands of the Shoshone Nation of Indians,” which, according to the treaty, was
a “Treaty of Peace and Friendship” between the United States and the western bands of
Shoshone Indians. The Ruby Valley Treaty authorized non-Indians to cross the Shoshone
land located in Nevada on several already established traveled routes, such as train, mail,
and telegraph lines, without “molestation or injury” from the western bands of Shoshone
Indians. It also granted the United States the right to establish military posts in Shoshone
lands, and that such lands “may be explored and prospected for gold and silver, or other
minerals.” In exchange for the western bands of Shoshone Indians’ “inconvenience”
resulting from the use of the travel routes in their land by “white men,” the United States
agreed to compensate the western bands of the Shoshone Indians $5,000.00 per year
for twenty years, a total of $100,000.00.

37
Additionally, following the Ninth Circuit’s 1983 decision in United States v. Dann,
the BIA notified Congress that it could not submit proposed legislation at that time. The
Director of the Office of Indian Services at the BIA wrote to Congresswoman Barbara
Vucanovich, who was one of Nevada’s Congressional representatives at the time, noting:

For some time we and the Congress have been awaiting a Court of Appeals
decision in the Dann case, Carrie and Mary Dann having contended that
the Western Shoshone still retain aboriginal title to the Nevada portion of
the lands claimed. On May 19, 1983, the Court ruled that no evidence had
been presented by the Government establishing that aboriginal title had
been lost. We do not know whether this decision will be appealed to the
Supreme Court.[17] Meanwhile, the Western Shoshone people are
scheduling a series of general meetings in an effort to develop a proposal
that would incorporate the distribution of the funds and the utilization of the
subject lands. The situation has become, as a result of the decision,
extremely confused and under the circumstances we are most reluctant to
submit proposed legislation for only the monetary award.

17 The Dann case was appealed to the United States Supreme Court in 1985, which found
that the Western Shoshone peoples’ tribal title to their aboriginal land passed to the
government when the 326-K Fund was awarded to the Western Shoshones in the ICC
case, Docket No. 326-K, and placed into the United States Treasury in December 1979.
See United States v. Dann, 470 U.S. 39, 49-50 (1985). The Dann case returned to lower
courts for further proceedings regarding whether the Dann sisters had individual
aboriginal rights, as opposed to tribal rights, in the Nevada lands at issue. See id. at 50.
The Dann case was appealed once more to the United States Court of Appeals for the
Ninth Circuit in 1989, which ruled that the Dann sisters had limited individual title rights,
“restricted” to the land that they or their lineal ancestors actually occupied prior to
November 26, 1934, the date that the federal government withdrew the Nevada lands in
question from entry and settlement by the public. See United States v. Dann, 873 F.2d
1189, 1199, 1200-01 (9th Cir. 1989). Following the 1989 Ninth Circuit appeal, the Dann
sisters pursued their land claim in the late 1990s before the Organization of American
States’ Inter-American Commission on Human Rights, an international tribunal, which
found, on December 27, 2002, in favor of the Dann sisters’ claim for title to their Nevada
lands, and made the “RECOMMENDATION[]” that the sisters be “[p]rovide[d]” with “an
effective remedy, which includes adopting the legislative or other measures necessary to
ensure respect for the Danns’ right to property.” See Mary Dann and Carrie Dann v.
United States, Case 11.140, Inter-Am. Comm’n H.R., Report No. 75/02, 47 (2002)
(capitalization in original). The United States government, however, did not adopt the
Inter-American Commission on Human Right’s December 27, 2002 recommendation. On
July 7, 2004, Congress passed the Claims Distribution Act of 2004, which provided for a
monetary per-capita distribution of the 326-K Fund to qualifying Western Shoshone
members, but did not provide the Dann sisters or any other Western Shoshone members
with title to their ancestral lands.
38
Undoubtedly, considerable time will have elapsed before the Western
Shoshone people, the Secretary of the Interior and the Congress are able
to reach agreement in this complex matter.

Also, on December 15, 1983, the Assistant Secretary for Indian Affairs at the BIA wrote
Senator Mark Andrews, the Chairman of the United States Senate Select Committee on
Indian Affairs, noting that it was “premature and not in the best interest of either the tribes
or the government” to introduce proposed legislation. The Assistant Secretary for Indian
Affairs at the Department of the Interior also noted:

Presently, groups of Western Shoshone have been discussing proposed
legislation to secure both the monetary settlement and a portion of the lands
in Nevada. A particularly difficult problem exists with respect to any land
restoration approach due to the virtual absence of a successor tribe or tribes
representative of all the recommended beneficiaries. Consequently,
meaningful planning has not yet occurred.

In November of 1984, the BIA began negotiations with the “Western Shoshone
National Council,” regarding potential distribution legislation for the 326-K Fund. The
Western Shoshone National Council was comprised of various Western Shoshone tribal
governments and political organizations and was designated by the Western Shoshone
as the entity to represent the Western Shoshone in negotiations with the United States.

On May 20, 1985, the BIA received the Western Shoshone National Council’s
“PROPOSAL TO COMPLETE DATA GATHERING,” (Proposal) in which the Western
Shoshone National Council stated that they would need the next three years to prepare
for their negotiations with the BIA. (capitalization in original). The Proposal detailed the
various steps the Western Shoshone National Council would have to complete before
entering into negotiations. The steps included:

[E]stablish a data base for their land and land use; organize for negotiations,
determine general land control assignments, and determine general policy
for joint areas; develop preliminary policy for land use and preliminary land
development plans; and, enter into and complete negotiations with the
Federal government and define terms that can be incorporated into a
legislated agreement.

According to the “Work Schedule” included in the Proposal, the Western Shoshone
National Council stated that certain “Work Products,” such as “Historical Analysis,”
“Demographic Description of Population,” “Resources Inventory,” and “Land Interests,”
would be completed between one to three years, and that these work products would be
“needed for negotiations and development of agreement terms.” (capitalization in
original).

According to the BIA, by mid-1986, whatever negotiations had taken place
between the government and the Western Shoshone National Council came to a virtual

39
standstill. On June 30, 1986, the BIA sent the Western Shoshone National Council a
letter, stating that, “[a]fter over two years of negotiations, I am truly sorry that our
respective positions remain so far apart. . . . [T]he Department does not recognize any
valid legal claim to Western Shoshone tribal ancestral lands,” and “the Department
believes further negotiations at this time would be futile.” As of July 27, 1986, as
evidenced by a memorandum from the Assistant Secretary for Indian Affairs to the
Phoenix Area Office, negotiations between the government and the Western Shoshone
National Council were “not proceeding,” and the government “consider[ed] the
negotiations to have been suspended indefinitely.”

In light of the standstill in negotiations, on October 28, 1986, Senator Paul Laxalt,
Senator Chic Hecht, Congresswoman Vucanovich, and then Congressman Harry Reid,
of the Nevada Congressional delegation, wrote to the Secretary of Interior and noted
that, “[i]f the Shoshones do have a viable claim to private lands (approximately two million
acres), the Nevada Congressional delegation is concerned that the Shoshone land rights
question be resolved as quickly as possible without disruption of private titles.” The
Nevada Congressional delegation recognized that organizing a distribution for the 326-K
Fund had been complicated, stating that,

[t]he extent of continuing Western Shoshone land rights has been a
frustrating problem for the Western Shoshone Indians, private parties, and
governmental agencies for many years now. Although four negotiating
sessions between Western Shoshone National Council delegates and the
Department of the Interior have taken place over the last year, little progress
has been made toward a comprehensive solution.

The Nevada Congressional delegation’s October 28, 1986 communication also noted
that,

the United States Claims Court and the Senate Select Committee on Indian
Affairs agree that a comprehensive legislative solution will be necessary.
The present situation only promises to get worse. Once again, we urge the
Department to meet with the Western Shoshone National Council to find a
common basis for moving forward. While we realize that financial demands
upon the Department are heavy, we urge you to consider resolution of the
Shoshone controversy a priority, and to assist the Shoshones with
necessary funding.

As of mid-1987, Congress did not believe a final resolution to the Western
Shoshone judgment claim was “immediate.” According to a May 29, 1987 letter from
Senator Daniel Inouye, Chairman of the United States Senate Select Committee on
Indian Affairs to Senator Hecht and now Senator Reid, it appears that the Western
Shoshone National Council requested a Congressional hearing to discuss the Western
Shoshone judgment claims. Senator Inouye stated in his letter that “I do not believe that
a hearing will lead to any immediate solution to this problem,” but, that such a hearing
could at least establish “a basis for a fair resolution of this matter.”

40
There also was disagreement within the government as to how to proceed with
negotiations with the Western Shoshone National Council. The Chairman and Vice-
Chairman of the United States Senate Select Indian Committee on Indian Affairs believed
that future negotiations were dependent on the Western Shoshone National Council
receiving sufficient funding for their requested “study to develop an inventory of the
aboriginal lands and other natural resources which were subject of the 1863 Treaty of
Ruby Valley and the judgment of the Indian Claims Commission in Docket No. 326-K.”
According to a July 28, 1987 letter from the Chairman and Vice-Chairman of the United
States Senate Select Indian Committee on Indian Affairs to the Assistant Secretary of the
Interior, “[t]he project that the Western Shoshone National Council now proposes would
appear to be essential in order to establish a frame-work for future negotiations,” and “we
strongly urge that the Bureau of Indian Affairs join with ANA [Administration for Native
Americans] to assure sufficient funds are made available to complete this project in a
timely fashion.” The Assistant Secretary for Indian Affairs at the Department of the
Interior, however, disagreed with the Chairman and Vice-Chairman, and responded to the
letter on August 12, 1987, stating:

[T]he Western Shoshone have been compensated in the ‘usual practice’ for
the loss of their aboriginal title and there is no further legal claim against the
United States. Consequently, we do not perceive a need to survey their
entire historical use area as that matter was addressed at length in the
[Indian Claims] Commission and Court of Claims proceedings.

(brackets added).

As of August 1988, negotiations with the Western Shoshone National Council were
still suspended, with no known date for re-opening negotiations. According to an August
3, 1988 BIA Phoenix Area briefing paper prepared for the Secretary of Interior,
“negotiations have been suspended indefinitely” and “subsequent communication had not
changed the situation.”

Despite the lack of negotiations between the government and the Western
Shoshone National Council, on September 28, 1989, Congresswoman Vucanovich
proposed H.R. 3384, a distribution plan of the 326-K Fund. The Western Shoshone tribal
governments strongly objected to the introduction of the bill. The Te-Moak Tribe of
Western Shoshone Indians were “extremely angry” that H.R. 3384 was introduced without
“consultation with the Western Shoshone National Council and without the approval of
any of the nine Western Shoshone tribal governments.” H.R. 3384 also was opposed by
the staff at the Department of the Interior. According to an October 13, 1989 document
from the BIA Acting Phoenix Area Director to

[Text truncated at 120,000 characters. The full text is on the page linked above.]

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/4406826. Public record. Not legal advice.