# Red Lake Band v. United States

> United States Court of Claims · March 28, 1989 · 17 Cl. Ct. 362

URL: https://www.frixlaw.com/law-library/cases/6826430

## Case

- **Full name:** The RED LAKE BAND v. United States
- **Court:** United States Court of Claims
- **Decided:** March 28, 1989
- **Citations:** 17 Cl. Ct. 362; 1989 U.S. Claims LEXIS 46; 1989 WL 69793
- **Precedential status:** Published
- **Opinion:** Opinion of the court by Bruggink
- **Judges:** Bruggink
- **Cited by:** 14 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/6826430

## How later opinions describe it (automated extraction)

- finding that “[i]t is the Government’s duty to account for those disbursements by documenting them,” and listing “backup documents that would normally have formed the support for an accounting,” including “vouchers, invoices, bills, receipts, memoranda, or other documents”

## Opinion text

TABLE OF CONTENTS
Page
I. BACKGROUND 370
A. Plaintiffs Motion in Limine 372
B. Has Defendant Furnished an Accounting? 373
II. DEFENDANT’S MOTION TO DISMISS BASED ON THE STATUTE OF LIMITATIONS 374
A. Claims 1 and 2 375
B. Claims 3 and 4 378
III. THE NON-ACCOUNTING CLAIMS 378
A. Expenditures From the Principal Fund in Excess of 5% 378
1. Statutory Construction 378
2. Plenary Power 383
3. Fair and Honorable Dealings 386
B. Per Capita Disbursements — Non-accounting Issues 390
C. Education Expenses 392
D. Medical Attention 402
IV. THE ACCOUNTING CLAIMS 404
A. Disallowed Categories 404
B. Plaintiff’s Motion for Leave to File Memorandum 405
C. Use of the Accounting Process and GAO Report as Proof 407
D. Per Capita Disbursements — Accounting Issues 409
1. Objections Dependent on Plaintiff’s Motion in Limine 410
2. Payments to non-Red Lake Indians 410
3. Incomplete Proof 411
E. Disbursements Presented on Sample Basis 412
1. Sample 555 (Code 1, no proof) 413
2. Sample 556 (Code 2, failure of proof) 414
3. Sample 557 (Code 3, purpose not shown) 415
4. Sample 558 (Code 8, duplication) 416
5. Sample 559 (Code 11, expenditure for federal purpose) 416
6. Sample 560 (Code 12, expenditure for individual benefit) 418
7. Sample 561 (Code 99, food, rations, and provisions) 418
V. ADDITIONAL FACT FINDINGS 420
A. The Nelson Act 420
B. 1889 Negotiations with the Red Lake Band 422
C. Bureau Requests for Annual Appropriations 425
D. Legislative Consideration of Non-Per Capita Withdrawals 428
E. Legislative Consideration of Per Capita Payments 432
F. Appropriations from the Principal Fund 436
G. The Disbursement and Settlement Process 443
H. The 1963 GAO Report 445
I. Indian Policy 450
J. Education 451
K. Oliver Breckner 462
L. Medical Attention 464
M. Agricultural Expenditures 472
VI. SUMMARY CONCLUSION 473
*369 OPINION
BRUGGINK, Judge.
This is an action for an accounting brought by the Red Lake Band of the Minnesota Chippewa Tribe pursuant to section 2 of the Indian Claims Commission Act, 25 U.S.C. § 70a (1976) (“ICC Act”). 1 The Red Lake Band, along with other bands of the Minnesota Chippewa, have claims pending in five consolidated cases. In a general sense, these claims fall into three categories: disbursement accounting, receipts accounting, and fair market value. The procedural history of this case, related actions, and previous litigation involving the Chippewa is set out in Minnesota Chippewa Tribe v. United States, 11 Cl.Ct. 221, 223-34 (1986), and 14 Cl.Ct. 116, 118-20 (1987). Familiarity with that background is presumed. This opinion deals only with plaintiff’s challenge to approximately $4,000,000 in disbursements made by defendant from monies held by it in trust for the Red Lake Band pursuant to the Nelson Act, ch. 24, 25 Stat. 642 (1889).
Nelson Act monies were primarily generated by the defendant’s sale of land and timber ceded by the Red Lake and other Minnesota Chippewa Bands in connection with their agreement to the Nelson Act. These monies were to be held by defendant in trust. It is the Government’s duty to account for those disbursements by documenting them, and where challenged, to show that they were for the benefit of the Indians and were appropriated as provided for by the Nelson Act or by subsequent legislation enacted within Congress’ plenary power. See Rogue River Tribe of Indians v. United States, 105 Ct.Cl. 495, 550-52 , 64 F.Supp. 339, 343-44 (1946); Seminole Nation v. United States, 102 Ct.Cl. 565, 629-31 (1944), cert. denied, 326 U.S. 719 , 66 S.Ct. 24 , 90 L.Ed. 426 (1945). As part of the relief requested with the commencement of this action in 1951, defendant has been asked to account for disbursements from certain funds. In response to that request, the General Accounting Office (“GAO”) issued a report in 1963 (“1963 GAO Report”), in part building on an earlier 1929 report (“1929 GAO Report”), as part of the Government’s fulfillment of its duty to account. The plaintiff's subsequent exceptions to that report are the source of the disbursement claims made by the Red Lake Band here.
This disbursement portion of the case is really part of a three step calculus which must ultimately be made before any liability can be assessed. Although each step can be separately reckoned, ultimate liability, if any, requires all three. In a separate proceeding, the court will undertake what is really the first step in the process — evaluation of plaintiff’s claim that the amount defendant generated by sale of land and timber was too small and that defendant must make up the difference. This opinion is in effect the middle step — determination (only as to the Red Lake Band) of whether amounts actually received were properly disbursed. Against whatever is ultimately determined to be the correct amount for which defendant is accountable, it is entitled to a credit for amounts which are both properly disbursed and which may be treated as payments on the claim, including amounts of federal monies which may qualify as gratuities.
The disbursement accounting can be loosely divided into accounting or non-accounting claims, in the sense that the accounting claims turn on an examination of documents in order to evaluate purpose, proof, authorization, etc. Non-accounting claims are those in which whole classes of disbursements are challenged, either as a matter of law or for factual reasons that *370 are common to all disbursements of that class. There are five claims which fall into the latter category: 1) all disbursements out of the principal fund in excess of five percent of that fund were in violation of the Nelson Act or otherwise a breach of trust; 2) none of the disbursements for education were for the benefit of the Band because the education was inferior; 3) none of the disbursements for medical attention were for the benefit of the Band because the medical attention was inferior; 4) payments to the State of Minnesota for tuition and for public schools violated state law and the equal protection clause; 5) payments to private sectarian schools were violative of the establishment clause. The latter four claims are the subject of defendant’s pending motion to dismiss, addressed infra p. 372 et seq.
The remaining claims, which the court has characterized as accounting claims, fall into two general categories. First, with respect to annuity payments made to individual Band members (also referred to as “per capita payments”), the Band alleges that such disbursements are not chargeable to trust funds: because they were not made in accordance with applicable rules and regulations, because there is no proof of the expenditure, or because the evidence of a disbursement is otherwise deficient. With respect to other, non-per capita disbursements, the Band alleges generally: (1) that there is no proof or a failure of proof for certain expenditures; (2) that expenditures were for a federal governmental purpose; (3) that disbursements were for individual, rather than tribal benefit; (4) that disbursements were not made in accordance with applicable rules and regulations; (5) that the same documentation was used to support more than one charge; and (6) that expenditures were for food, rations, or provisions. 2
Trial was held from April 11 through May 11, 1988. Post-trial briefing is complete. After a thorough examination of the evidence, transcripts, and briefing, the court concludes that the Band may recover in part on both its non-accounting and accounting claims.
I. BACKGROUND
The issues in the present case are framed by the original petition filed in 1951 before the Indian Claims Commission (“ICC”) as amended in 1956, the 1963 GAO Report, and the exceptions filed by the Band in 1969 to that report. 3 By this court’s order of July 2, 1984, defendant was directed to prepare supplemental accountings of amounts paid for the benefit of the Indians on a band-by-band basis. That order was vacated in Minnesota Chippewa Tribe Red Lake Band v. United States, 768 F.2d 338 (Fed.Cir.1985). In that decision, the court of appeals permitted the band-specific supplemental accounting to proceed only with respect to the Red Lake Band, because it had “clearly set forth in exceptions 1-40 its demand for a separate accounting of Nelson Act Funds____” Id. at 342 . The supplemental accounting as to other bands (the “Consolidated Chippewa”) was to proceed without a band-by-band breakout.
Subsequent to that decision, and in place of a formal supplemental accounting by defendant, the Red Lake Band and the Consolidated Chippewa volunteered to accept from defendant the backup documents that would normally have formed the support for an accounting. See Transcript of Proceedings, November 12, 1985 at 26; Plaintiffs’ Proposed Schedule of Accounting Tasks, January 8, 1986. The order of *371 January 22, 1986 provided in part as follows:
1. In Docket No. 189-A, defendant shall, on or before May 1, 1986, produce for inspection and copying, at the office of plaintiffs’ accountant, Paul J. Gillis, C.P.A., 11510 Georgia Avenue, Wheaton, Maryland 20902, the “backup data” (including vouchers, invoices, bills, receipts, memoranda, or other documents) relied upon by defendant in preparing the 1963 General Accounting Office report on file in these cases, and listing claimed disbursements from Nelson Act proceeds for the benefit of the Red Lake Band in the amount of $4,000,000, more or less. Such “backup data” shall be assembled by reference to the GAO report classifications in the order in which the disbursements appear in the 1963 GAO report; that is, the documents are to be grouped and labeled by appropriation fund, by year, and by disbursement category; and, within each group of documents, the documents are to appear in the same order as they appear on the GAO work cards from which the 1963 report was prepared. (Footnote omitted.)
The court withheld ruling on whether plaintiff’s acceptance of the backup material relieved the Government of its responsibility to produce supplemental accountings of the Nelson Act funds for the Red Lake Band and the Consolidated Chippewa.
The January 22, 1986 order was modified to the extent that “the ‘backup data’ to be produced pursuant to paragraphs 1 and 2 of that order at the office of Mr. Gillis need not include ‘backup data’ relating to per capita disbursements____” Order of February 24, 1986. Defendant delivered approximately two-thirds of the backup data, including per capita documentation, by the May 1, 1986 deadline. Most of the balance of the data was delivered by August 1, 1986. This Red Lake backup data has been referred to throughout these proceedings as “the thirty-eight boxes.”
After reviewing the thirty-eight boxes, containing approximately 225,000 pages of material, plaintiff filed exceptions on February 25, 1987. In order to distinguish them from the pleading-type exceptions filed in 1969, and to credit the Band’s accountant, who was primarily responsible for drafting them, they will be referred to as the “Gillis exceptions.”
The Gillis exceptions challenged more than ninety-eight percent of approximately $4,000,000 in disbursements covered by the thirty-eight boxes. The basis for a challenge as to each expenditure was expressed by a numerical code referencing one of twenty-three types of Gillis exceptions. The documentary support for each disbursement was examined by Gillis or a member of his staff. Certain disallowance codes asserted defects arising from the quality of the particular documentation. Others were applied on a categorical basis to certain types of disbursements or documentation.
Plaintiff submitted an explanation of the Gillis exceptions on September 9, 1987. Defendant filed its response to the exceptions on October 23, 1987. In its response, defendant denied liability under any of the Gillis exceptions as a matter of fact and/or law. Defendant did not respond directly to the individual applications of the Gillis codes by way of producing supporting documentation in response to allegations of “no proof,” “failure of proof,” or “failure to comply with applicable laws and regulations” at that time. Consequently, almost every disbursement remained at issue.
Confronted by the possibility of needing to examine a massive volume of material in order to resolve the Gillis exceptions, the court and the parties developed a methodology for trying samples of the non-categorical codes. These were codes that would require an examination of the accounting documentation. They included: (1) no proof; (2) failure of proof; (3) the purpose of the expenditure not shown either explicitly or by reference to the unit (agency, school, tribal, individual) receiving the expenditure; (8) duplication — same charge more than once; (11) the expenditure was for a federal governmental purpose; (12) the expenditure was for individual benefit; and (99) the expenditure was for *372 “food, rations and provisions.” The parties identified representative samples that would be adjudicated at trial, in the expectation that the parties could later apply the court’s rulings to unadjudicated vouchers in dockets 189-A and 19. 4
Prior to trial defendant conceded that disbursements within several GAO categories 5 were improper, primarily on the grounds that the expenditure was for a governmental purpose. The conceded categories were: Agency Buildings and Repairs; Boats, Docks, etc.; Hardware, Glass, Oils, and Paints; Misc. Agency Expenses; Misc. Building Materials; Misc. Employees; Pay of Indian Police; Pay of Mechanics; Telephone Lines; Transportation of Supplies; and Pay of Interpreters.
A. Plaintiff’s Motion in Limine
The Gillis exception of “no proof” was utilized for all disbursements for which there was no backup material. In those instances, defendant would insert in the thirty-eight boxes at the relevant place a “plug sheet,” which simply meant that no backup material had been located. Subsequent to the initial exchange, however, additional documentation was located. Some of this material was exchanged immediately prior to trial, but some new material was not clearly identified until trial, when it became apparent that the thirty-six boxes of backup documentation ultimately offered into evidence by defendant contained material not found in the original thirty-eight boxes produced in 1986.
The new information is generally of two types. New material furnished in March 1988 consisted of backup material related to per capita disbursements — annuity rolls and claim settlements. The court denied plaintiff’s ensuing motion in limine to exclude the newly produced documents, primarily because the court’s order of February 24, 1986 (stating that defendant’s obligation to produce backup data did not include documents in support of per capita disbursements) was not explicitly modified in subsequent scheduling orders. Order of April 5, 1988. The court denied plaintiff’s April 11, 1988 motion to modify, see Order of May 12, 1988, although the parties were given the opportunity to readdress the issue in post-trial briefing. That issue is thus once again before the court. After considering the parties’ post-trial submissions readdressing the issue insofar as per capita backup data is concerned, the court readopts its earlier ruling. Defendant’s understanding that not all the backup data with respect to per capita disbursements had to be furnished is a reasonable one considering the record. The plaintiffs’ motion in limine is denied in that respect.
It is also denied with respect to non-per capita disbursements, but for a different reason. These materials were apparently generated in response to several of the samples that plaintiff selected for presentation at trial, notably with respect to the “failure of proof” and “duplication” codes. One reason for the delay in production was that the wrong documents had originally been copied and placed in some of the folders in the thirty-eight boxes. Other materials were generated by supplemental responses to research requests.
At trial, defendant’s accounting witness, Mr. William E. Anderson, Section Chief of the Indian Trust Accounting Division (“ITAD”) in the General Services Administration (“GSA”), testified that he supervised the copying and organization of documents for purposes of trial preparation. These documents consisted of thirty-six boxes of material, and except for the fact that they were fastened, he stated that the material was organized in the same manner *373 as that provided to plaintiff in 1986. Anderson instructed his staff not to add documents to the material contained in the original thirty eight boxes. Nevertheless, it became obvious during defendant’s rebuttal of the accounting exception samples that significant critical exhibits were not furnished until trial. The extent of additional documentation contained in these boxes has not been determined, but it is clear that many of the expenditures previously referenced by plug sheets now have supporting documentation.
Because trial on the accounting exceptions was done by sample, the extent of the problem of new materials is not clear. Obviously the vast bulk of support materials were produced in the delivery of the thirty-eight backup boxes. Thirty-six boxes of ostensibly the same material were offered at trial. Plaintiff correctly argues that the new material was offered beyond the cutoff date for exchange of exhibits and therefore concludes that all the thirty-six boxes of backup materials offered at trial should be rejected as tainted. The court is certainly sympathetic with plaintiff’s argument. This matter has been litigated for 38 years, and it is disconcerting at best to have critical documents appear for the first time at trial. Moreover, plaintiff has spent substantial amounts of time and money putting on a case geared to the absence of certain documentary support. Much of this time was wasted because defendant had within its possession documentation which at trial provided a simple answer to some of the Gillis documentary exceptions.
On the other hand, the court is faced with the prospect of either ordering a page-by-page comparison of the materials furnished in the original thirty-eight boxes with the thirty-six boxes produced at trial, or wholesale rejection of documentation supporting approximately half of the $4,000,000 in disbursements. Neither possibility is palatable for the simple reason that plaintiff does not contest the accuracy or authenticity of most of the later materials. In the one instance, an enormous investment of time would be required to isolate what is probably a relatively small number of offending materials. On the other hand, if all were rejected, plaintiffs would be receiving double payment, once at the time of disbursement, and a second time as a result of the trial, for the sole reason that defendant inadvertently or negligently or for reasons beyond its control did not meet a pretrial document exchange schedule.
Without in any way minimizing the importance of the pretrial orders, or the plaintiff’s legitimate expectation of enforcement of those orders, the court finds that either remedy is too harsh. The proper one is to address on the merits those materials offered at trial, and to compensate plaintiff for its expenses incurred because of defendant’s action or inaction. Because the court makes a similar ruling with regard to the question of whether there has been an accounting, the rulings are combined in the following discussion. 6
B. Has Defendant Furnished An Accounting?
When a trust relationship between the Government and Indians exists, as it does here, “the Government’s actions normally are judged according to standards established in traditional trust law doctrine. The standard of duty as trustee for Indians is not mere reasonableness, but the highest fiduciary standards.” American Indians Residing on Maricopa-Ak Chin v. United States, 229 Ct.Cl. 167, 182 , 667 F.2d 980, 990 (1981) (citing United States v. Mason, 412 U.S. 391, 398 , 93 S.Ct. 2202, 2207 , 37 L.Ed.2d 22 (1973)), cert. denied, 456 U.S. 989 , 102 S.Ct. 2269 , 73 L.Ed.2d 1284 (1982). It is well settled that a trustee such as defendant is under a duty to the beneficiary “to keep and render clear and accurate accounts with respect to administration of the trust.” Restatement (Second) *374 of Trusts § 172 (1959); see also W. Fratcher, Scott on Trusts § 172 (1987); G. Bogert, Trusts and Trustees § 963 (rev. 2nd ed. 1983). Clarity and accuracy require that the accounting show what gains have accrued and what losses have occurred, receipts, expenditures, and allocations between principal and interest. Scott on Trusts § 172; see Blackfeet and Gros Ventre Tribes v. United States, 32 Ind.Cl.Comm. 65, 87 (1973). Plaintiff has consistently taken the position that defendant has not provided an accounting of Nelson Act funds — specifically, that neither the 1963 GAO Report nor the production of backup documents was an accounting. Although not squarely addressed in previous rulings, the clear import of earlier decisions by both the trial and appellate court has been that the 1963 GAO Report was not a complete accounting.
The 1963 GAO Report, which was based in part on the 1929 report’s findings, is not sufficiently detailed to be an accounting. It is a critical first step and it provides necessary context, but only in gross. Cf. American Indians, 229 Ct.Cl. at 182 , 667 F.2d at 990 ; Mescalero Apache Tribe v. United States, 23 Ind.Cl.Comm. 181, 182 (1970). In the absence of a formal accounting, the production of documents, the Gillis exceptions, the defendant’s responses to them, and the pretrial and trial process have had the function, in part, of an accounting to supplement the GAO report. With respect to numerous expenditures tried by sample, for instance, it was not until the final exhibit exchanges, or until trial that defendant fully accounted. It required the light of the Gillis exceptions and the examination and cross examination of witnesses, particularly Mr. William Anderson, for the plaintiff and the court to get a satisfactory understanding of numerous accounting issues.
The court concludes that the 1963 GAO Report, enhanced by the document production and the trial, constitute an accounting of the disbursement of the Red Lake Band’s Nelson Act trust funds. Whether a formal accounting would have resulted in as much understanding is not clear. What is clear to the court however is that much of the plaintiff's expense in challenging defendant’s documentation or lack of it had the effect of doing defendant’s accounting work for it. It has been held elsewhere {supra p. 373) that much of plaintiff’s trial preparation time, particularly that of its accountants, was wasted due to unnecessary challenges to documentation. For both these reasons, therefore, the court holds that plaintiff is entitled to be reimbursed for a portion of its legal and other expenses beginning February 1,1986. The court merely proposes that one-fourth of plaintiff’s legal costs and one-half of its other expenses associated with the Red Lake disbursement trial be reimbursed by defendant. This proposal is not binding on the court or parties. If the parties cannot agree on a figure on or before June 1, 1989, the plaintiff can seek a particular amount based on its own justifications.
II. DEFENDANT’S MOTION TO DISMISS BASED ON THE STATUTE OF LIMITATIONS
Two weeks prior to trial, defendant filed a motion to dismiss the following claims, which it asserted were not timely raised: (1) expenditures for public school tuition and construction violated state law and the equal protection clause; (2) expenditures for sectarian school tuition violated the establishment clause and the fifth and fourteenth amendments; (3) all disbursements for education were improper because the education furnished was inferior; and (4) all disbursements for medical care were improper because the medical care was inferior. Solely for purposes of this subsection dealing with the statute of limitations, these claims will be referred to as numbered above.
Because it came on the eve of trial, the court deferred ruling on the motion to dismiss until after trial, and the Band was permitted to introduce evidence to establish the claims or to demonstrate that it could not have become aware of the claims within the limitations period. The matter has been briefed and is ready for resolution.
*375 Although a motion to dismiss was not then pending, defendant had indicated in status conferences that it might challenge several of plaintiff’s claims as untimely pleaded, including the claims that are the subject of the present motion. In Minnesota Chippewa Tribe, 14 Cl.Ct. 116 , the court addressed defendant’s assertions in part. With respect to the claims that are the subject of defendant’s motion, the court stated:
[T]he “claims” that defendant characterizes as relating to inferior quality education and medical care, as well as the Gillis exception to goods or services of little or no value, appear to the court at this point to be a logical outgrowth of the request for a disbursement accounting.
Finally, the court notes that the remaining claims (that payments to both sectarian and nonsectarian schools were allegedly improper) do not on their face appear to be covered by a reasonable construction of the pleadings. Plaintiff will have an opportunity, however, to argue either that these matters are specifically raised by existing timely pleadings, or that they were generally raised earlier but could have been pleaded with specificity only after receipt of the backup documents.
Id. at 127 . The court further directed the parties to be prepared to go to trial on all of the claims defendant asserted were barred, as well as the issue of when plaintiff was or should have been aware of its claims.
It is well established that the doctrine of sovereign immunity requires that the United States must consent to suit before any claim will lie against it. Testan v. United States, 424 U.S. 392, 399 , 96 S.Ct. 948, 953 , 47 L.Ed.2d 114 (1976); see also United States v. Mitchell, 445 U.S. 535, 538 , 100 S.Ct. 1349, 1351 , 63 L.Ed.2d 607 (1980); United States v. Sherwood, 312 U.S. 584, 586 , 61 S.Ct. 767, 769 , 85 L.Ed. 1058 (1940). This doctrine incorporates the principle that the sovereign has the power to attach conditions to such suits. The terms of the Government’s consent define the court’s jurisdiction to entertain this case. Sherwood, 312 U.S. at 586 , 61 S.Ct. at 770 (citing Minnesota v. United States, 305 U.S. 382, 388 , 59 S.Ct. 292, 295 , 83 L.Ed. 235 (1939)). In the present case, the sovereign immunity of the United States was waived by section 2 of the ICC Act, which provided five bases for relief against the Government. 25 U.S.C. § 70a. Section 12 required that all claims brought pursuant to the act be filed within the five year period ending August 13, 1951. 25 U.S.C. § 70k.
Two petitions constitute plaintiff’s original pleadings: the complaint filed in docket 189 on August 2, 1951 and the complaint filed in docket 189-A pursuant to the ICC’s order of Dec. 29, 1955. In addition, the 1969 exceptions to the 1963 GAO Report are treated as amended pleadings that relate back to the original pleadings. Minnesota Chippewa Tribe, 768 F.2d at 341 .
Other relevant filings were subsequently made. On March 3, 1986, in response to the order of January 22, 1986, plaintiffs in dockets 19 and 189-A filed a pretrial submission defining all Nelson Act accounting claims. On February 25, 1987, after receipt of the backup data, the Red Lake Band filed the Gillis exceptions to individual disbursements. Finally, plaintiff filed its memorandum of fact and law on October 13, 1987, pursuant to the order of October 2, 1987 which required plaintiff to include all theories of recovery to be presented at the Red Lake disbursements accounting trial. Unlike the 1970 exceptions to the 1963 GAO Report, however, these latter filings have not been determined to relate back to the original pleadings.
A. Claims 1 and 2
As a source for its present claims, plaintiff points to certain paragraphs in the original pleadings. In paragraph 6 of the 1951 complaint, it is alleged that the United States:
illegally expended the proceeds from the sale of said lands contrary to the provisions of the act of January 14, 1889, and other acts, including education, medical attention, highway and administration, *376 all of which is more particularly set forth in actions now pending before the Indian Claims Commission brought by the Minnesota Chippewa Tribe as Nos. 19 and 20. 7
Plaintiff places particular reliance on paragraph 14, which recites:
14. Defendant has illegally expended proceeds from the sale of said [Nelson Act] lands contrary to the provisions of the act of January 14, 1889, and other acts, using said funds for various purposes including education, medical attention, highway and administration____ (Emphasis added.)
The Band also points to paragraph 24 which charges that defendant used monies:
for various illegal and unlawful purposes and contrary to law, some of which include the repair and maintenance of agency buildings and for other administrative expense, as well as for education, highway and medical aid.
In its complaint in docket 189-A, the Band alleged that the United States “made expenditures and disbursements out of the proceeds it received from the sale of timber and agricultural lands under the Nelson Act in violation of the provisions of that Act and other acts in violation of its duty and obligation to the Red Lake Band.”
Finally, in the docket 189-A exceptions to the 1963 GAO Report, numbers two and thirty are relevant to Nelson Act disbursement claims. Exception two charged that the Government failed to fulfill its duties as trustee to the Band. In its statement of support for this exception, the Band further alleged that
the United States almost completely disregarded the 1889 Act-agreement with respect to the use and disbursement of the funds, and, in the main, distributed the receipts in violation of the Act and without the consent of the [Band] except for per capitas as qualified____
Exception thirty was entitled “Failure to furnish adequate information and exception for expenditure in violation of law and standards applicable to the trustee-fiduciary relationship.” In its statement of support, plaintiff stated that
there is nothing to show that the disbursements were for the exclusive benefit of the [Band] ... The report does not show that the goods and services purchased were consumed or used by the tribe exclusively, or for the direct benefit of the [Band]____
The United States used the [Band’s] trust money to build and maintain agency headquarters, offices, employees’ quarters, storerooms, fences, sidewalks, barns, hospitals, shops ... school buildings, sewer and water systems and other items. All such structures and improvements were treated and used as property of the United States.
Plaintiff’s statement of support for exception thirty also included a recitation that monies used to construct hospitals were illegally disbursed because they were built for government use.
A court should be guided by whether the factual allegations in the original pleading put the opposing party on notice that the original pleadings might be expanded. Minnesota Chippewa Tribe, 768 F.2d at 340-41 . Even a liberal construction of the pleadings upon which plaintiff relies however, leads to the inevitable conclusion that defendant had no reason to be on notice of Claims 1 and 2. The court initially observes that the allegations made in these documents do not contain any mention of constitutional amendments, federal civil rights laws, or state education laws, nor do the factual bases for the allegations describe circumstances that would indicate *377 that plaintiff would later assert claims based on these laws. It would be both unfair and contrary to Congress’ expectations to allow these generalized contentions to serve, over thirty years later, as a basis for claims which are totally different than those that have heretofore been the subject of discovery and argument, particularly when plaintiff has offered absolutely no reason for delaying until 1987 to make them. It is illuminating in this regard that the March 3,1986 pretrial statement, which was to contain all claims and legal theories, makes no mention of Claims 1 or 2.
As this court wrote in relation to a similar question concerning the White Earth allotment claim,
Plaintiffs argue that their request for an accounting is sufficient notice of their current claim____ If that broad similarity were sufficient reason to allow relation back, almost every matter growing out of the hundred year long relationship of the parties could be raised now or in the future as a result of that single complaint. Such a low threshold test would be utterly unworkable in this thirty-five year old litigation.
Minnesota Chippewa Tribe v. U.S., 11 Cl.Ct. 534, 539 (1987).
We are in the centennial anniversary year of the Nelson Act. These related cases have been litigated now for over 38 years based on allegations that Nelson Act funds were spent contrary to the language of the Act, in violation of the Government’s role as trustee to the Band, and in ways that were not for the exclusive benefit of the Band. These allegations invoked well-established principles of Indian trust accounting law, but did not put defendant on notice that plaintiff would be claiming that expenditures were in violation of the first, fifth, and fourteenth amendments to the Constitution, or Minnesota law related to free public education.
In Snoqualmie Tribe of Indians v. United States, 178 Ct.Cl. 570, 586 , 372 F.2d 951, 959-60 (1967), the court held that the doctrine of “relation back” is applicable to claims brought under the ICC Act, even though the statute of limitations is jurisdictional. The statutory directive that all claims be “presented” before August 13, 1951 leaves ample room for operation of this procedural device.
Plaintiff’s primary reliance for relation back is on its use in the original pleadings of such phrases as “other acts,” or “illegal expenditures.” Given the general context of those earlier pleadings — which asserted non-compliance with the Nelson Act and Indian trust accounting principles — the court declines to open these catchall phrases, after thirty-eight years, to specific constitutional or statutory provisions other than those specifically raised, such as the Nelson Act. If it is sufficient that the factual context is the same, i.e., that the claim also arises out of the Government’s handling of Indian trust funds, and if the claim merely has to be that the expenditure is “illegal,” the requirement that claims be “presented” is rendered meaningless. Virtually any claim could relate back. Because nothing in plaintiff’s original pleadings provided notice that these two claims would be later asserted, there can be no relation back. The court concludes that claims 1 and 2 were not raised in the original pleadings.
Plaintiff may avoid the bar of limitations, however, if these claims were inherently unknowable until after it had reviewed the backup data provided by defendant, or if defendant concealed information necessary to the claims. See Japanese War Notes Claimants Association of Philippines, Inc. v. United States, 178 Ct.Cl. 630, 634 , 373 F.2d 356, 358-59 (1967), cert. denied, 389 U.S. 971 , 88 S.Ct. 466 , 19 L.Ed.2d 461 (1967); Motorola Inc. v. United States, 13 Cl.Ct. 420, 425 (1987). Plaintiff asserted in its annotation to defendant’s proposed findings of fact that it did not know that money was disbursed from Nelson Act funds for sectarian schools until it reviewed the backup data, thus addressing defendant’s motion with respect to claims premised on the first amendment. It did not address any other aspects of the two claims at issue, nor was any evidence adduced at trial directed specifically to this question. In any event, the court’s review *378 of the GAO reports and annual appropriations authorizing disbursements from the Nelson Act principal fund illustrates that information related to the claims was neither inherently unknowable nor concealed.
Plaintiff could have become aware that the Government expended Nelson Act trust fund monies for payments to sectarian and public school tuition from several sources. The Band should have been aware of public school tuition payments from both the 1929 and 1963 GAO Reports. See 1929 GAO report at 231; 1963 GAO Report at 186. Moreover, annual appropriation acts for fiscal years 1923 through 1944 authorized the withdrawal of monies from the Nelson Act principal fund for public school tuition. Plaintiff could have been aware of the fact that monies were expended for sectarian schools from annual appropriation acts and their legislative history. The annual appropriation acts between fiscal years 1937 and 1943 authorized withdrawal of monies for care of Chippewa children attending private schools. Any investigation, not to mention common knowledge of where Indian children were attending school would have informed plaintiff that these private schools were sectarian. Indeed, representatives of the Band specifically sought appropriations to support private tuition payments.
For example, as part of its justification for fiscal year 1917, the Indian Office asserted that $3995.70 was expended from the principal fund for payments to the Catholic Indian Mission School at Red Lake in fiscal year 1915. See Indian Appropriation Bill, 1917: Hearings Before a Sub-comm. of the House Comm, on Indian Affairs, 64th Cong., 1st Sess. 66 (1916). Similarly, the Indian Office asserted that $5292 was expended from the principal fund in fiscal year 1919 to the Red Lake Mission School as part of its justification for fiscal year 1922. See Indian Appropriation Bill, 1922: Hearings Before a Subcomm. of the House Comm, on Appropriations, 66th Cong., 3rd Sess. 302 (1921). And for fiscal year 1937, the Indian Office requested $15,750 from the interest fund for the care of Chippewa children attending mission schools at Red Lake and at White Earth. See Interior Appropriation Bill, 1937: Hearings Before a Sub-comm. of the House Comm, on Appropriations, 74th Cong., 2nd Sess. 962 (1936).
Because the facts supporting these two claims were knowable before plaintiff’s review of the backup data, the statute of limitations is not tolled. In conjunction with the court’s earlier finding that these claims were not raised either generally or specifically in pleadings, the court grants defendant’s motion for their dismissal. Consequently, no disbursements are disallowed on the sole basis that they constitute tuition payments to public or private schools.
B. Claims 3 and 4
In Claims 3 and 4, plaintiff alleges that monies expended for both education and medicine did not benefit the Band because the services provided were of inferior quality. See Plaintiff’s Proposed Findings of Fact and Conclusions of Law (“PPFF”) at 154, 194. In defendant’s motion it contends that these claims are time-barred. For reasons discussed in sections III. C and D, infra pp. 42-48, 62, the court grants defendant’s motion.
III. THE NON-ACCOUNTING CLAIMS
In its non-accounting claims, the Red Lake Band seeks recovery of significant sums of money disbursed from its interest-earning (principal) funds irrespective of the sufficiency of the 1963 GAO Report as an accounting. Plaintiff alleges that these expenditures occurred in violation of the Nelson Act or were unfair and dishonorable.
A. Expenditures From the Principal Fund in Excess of 5%
1. Statutory Construction
Section 7 of the Nelson Act details the original manner and purposes under which trust fund monies arising from the sale of ceded land and timber were to be expended. The act required that the proceeds of these sales be deposited in the U.S. Treasury for all of the Minnesota Chippewa “as a permanent fund,” and earn *379 simple interest at the rate of five percent annually. Section 7 provided with respect to the interest fund that
[o]ne-half of said interest shall, during the said period of fifty years be annually paid in cash to the heads of families and guardians of orphan minors for their use; and one-fourth of said interest shall during the said period of fifty years be annually paid in cash in equal shares per capita to ... all other classes of said Indians; and one fourth of said interest shall be devoted exclusively to the establishment and maintenance of a system of free schools among said Indians and for their benefit____
With regard to the principal fund, section 7 provided that
at the expiration of the said fifty years, the said permanent fund shall be divided and paid to all of said Chippewa Indians and their issue then living, in cash, in equal shares. Provided, That Congress may, in its discretion, from time to time, during the said period of fifty years, appropriate, for the purpose of promoting civilization and self-support among the said Indians, a portion of said principal sum, not exceeding five per centum thereof.
Consequently, while Congress designated the principal fund as permanent, it also provided for expenditure of five percent “from time to time,” for “promoting civilization and self-support.”
According to the 1963 GAO Report, in the range of $2,350,000 was disbursed from Nelson Act principal funds for Red Lake between fiscal years 1905 and 1945. Congressional authorization of expenditures from the principal fund for “civilization and self support” commenced with the Act of Mar. 3,1911, ch. 210, 36 Stat. 1058,1065 , in which Congress authorized withdrawal of up to $165,000 in fiscal year 1912. 8 Congress also authorized the withdrawal of $2500 to pay the expenses of a delegation from White Earth attending congressional hearings in 1911. 9
Congress continued to authorize withdrawal of monies from the Nelson Act principal fund through fiscal year 1945. See infra pp. 436-43. In these authorizations, Congress provided several purposes for which the Secretary could withdraw monies. The legislation often authorized withdrawals for the general purposes of “promoting civilization and support,” or “general support.” These authorizations were commonly subdivided into more specific purposes, such as agency expenses, hospitals, relief of indigent Indians, construction and maintenance of public schools, and public school tuition. In other years, these more specific purposes were listed independently of one another, and in addition included other purposes such as care of Chippewa students attending private schools and attorneys’ fees.
In addition to authorizing withdrawals from principal for promoting civilization and self-support, Congress also authorized the withdrawal of monies to make payments to individual Chippewa. This was first done by an annual appropriation act, the Act of May 18, 1916, ch. 125, 39 Stat. 123 (1917). This legislation permitted the expenditure of one-fourth of the permanent fund as it then stood to individual Minnesota Chippewa eligible to participate in the distribution of the fund as follows:
That the Secretary of the Interior, under such rules and regulations as he may *380 prescribe, is hereby authorized to advance to any individual Chippewa Indian in the State of Minnesota entitled to participate in the permanent fluid of the Chippewa Indians of Minnesota one-fourth of the amount which would now be coming to said Indian under a pro rata distribution of said permanent fund: Provided That the Secretary of the Interior, under such rules and regulations as he may prescribe, may use for or advance to any Chippewa Indian in the State of Minnesota entitled to share in said fund who is incompetent, blind, crippled, decrepit, or helpless from old age, disease or accident, one fourth of the amount which would now be coming to said Indian under a pro rata distribution of said permanent fund: Provided further, That any money received hereunder by any member of said tribe or used for his or her benefit shall be deducted from the share of said member in the permanent fund of the said Chippewa Indians of Minnesota to which he or she would be entitled: Provided further, That the funds hereunder to be paid to Indians shall not be subject to any lien or claim of attorneys or other third parties.
Because this legislation authorized the distribution of a percentage of the fund, it is said to have authorized “pro rata” payments. Congress also authorized the Secretary of the Interior (the “Secretary”) to withdraw money from the principal fund for the purpose of making payments to the individual members of the Chippewa Tribe in later years. Legislation authorizing these payments was enacted in 1921, 1924, 1925, 1926, 1928, 1929, 1931, 1932, 1933, and 1934. See infra pp. 437-42. Because these later authorizations stated a particular amount to be paid to each individual, they are referred to as “per capita” payments. For convenience, the court refers to all payments to individual Chippewa as “per capita payments.” With the exception of the 1916 legislation, all authorizations contained a prerequisite that the tribe ratify the expenditure before payment could be made. Congress directed the Secretary to develop regulations governing the method of disbursement and tribal ratification.
Until 1939, the primary principal fund (“Chippewa in Minnesota”) was jointly maintained for all Minnesota Chippewa bands. Based on the 1963 GAO Report, the amount charged to the Red Lake Band’s share of that fund is $1,773,107.61. Of this total, the GAO report asserts that the amount spent for education was $114,-442.48, and the amount spent for Red Lake per capita cash payments was $981,-099.50. 10 After 1938, the principal for the Red Lake Band was separately held. The total amount charged to the Red Lake Band from the Red Lake principal fund through fiscal year 1945 is $76,592.80. No disbursements from the Red Lake principal fund were charged to education or per cap-ita cash payments. For the purpose of addressing plaintiff’s claims that disbursements from the principal were in violation of the Nelson Act and/or fair and honorable dealings, the court considers the figures and categories in the 1963 GAO Report to accurately reflect the actual disbursement of monies. However, this assumption is without prejudice to the Band’s particular accounting claims.
Plaintiff interprets the five percent limitation of section 7 as fixing the total amount that could be spent over the life of the trust. In other words, at the end of fifty years, no more than five per cent of the principal amount collected could have been appropriated under this proviso. Since the total amount disbursed and reimbursed from the principal funds for all bands was approximately $18,100,000, it is plaintiff’s view that no more than $900,000 could be appropriated for discretionary civi *381 lization and self-support for all bands over the life of the trust.
In fact, there were so many such appropriations over the years that all Nelson Act funds were eventually eliminated. The principal funds thus did not survive to permit distribution at the end of fifty years, as had been anticipated in the first portion of section 7. Plaintiff concludes that virtually the entire amount of the principal funds must thus be repaid by defendant as if no expenditures in excess of five percent of total principal had ever been made.
Defendant interprets the proviso much differently. It argues that the Congress was permitted to spend up to five percent of then existing principal each time it elected to exercise its discretion. In other words, the five percent limitation did not place a total limit on appropriations, only a cap on the size of any one appropriation. Under defendant’s view, since Congress was authorized by the Act to make single expenditures, it could make them collectively, despite the fact that the funds were eventually depleted.
While both sides claim to be applying the literal and intended meaning of the statute, the court concludes for the reasons which follow that a careful reading of the statute, as well as a consideration of the understanding of Congress and the Indians at the time, support defendant’s position.
The beginning place, of course, is the words of the proviso. Certain words can be eliminated from the present discussion, hopefully without affecting the meaning of the ones critical to the issue: “Congress may ... from time to time ... appropriate ... a portion of the principal sum not exceeding five per centum thereof.” In the court’s view this is not an unfair distillation. It has the effect, however, of showing that defendant has the better of the argument as to literal meaning. Five per centum clearly modifies or describes “portion.” A portion in turn can be appropriated “from time to time.” In sum, Congress can appropriate five percent of the principal more than once.
The court recognizes, however, that special considerations come to bear in construing Indian treaties and statutes, and acknowledges that plaintiff’s argument as to ambiguity is not frivolous. It is arguable that the word “portion” means the sum of all appropriations. Consequently, the proviso will be examined in its historical and legislative context.
In general, statutes must be interpreted in the context of their enactment. See Mountain States Telephone & Telegraph Co. v. Santa Ana, 472 U.S. 237, 252 , 105 S.Ct. 2587, 2596 , 86 L.Ed.2d 168 (1985). While substantial weight should be given to the interpretation of those charged with applying statutory provisions, id. at 254 , 105 S.Ct. at 25 , special considerations arise for the construction of provisions within agreements between the United States and Indian tribes. It is an established rule that ambiguous provisions in treaties and legislation ratifying agreements between the United States and Indian tribes must be interpreted in favor of the Indians. See Antoine v. Washington, 420 U.S. 194, 199-200 , 95 S.Ct. 944, 948-948 , 43 L.Ed.2d 129 (1975); Minnesota Chippewa Tribe, 11 Cl.Ct. at 239. This rule does not permit a construction that contradicts express statutory language or legislative history, however. DeCoteau v. District Court, 420 U.S. 425, 445 , 95 S.Ct. 1082, 1093 , 43 L.Ed.2d 300 (1975). With these principles in mind, the court reviews the legislative history underlying the Nelson Act in general and section 7 in particular.
As reported by the committee, H.R. 7935 provided that after the United States had been reimbursed for advances it made to the Chippewa while the principal fund accumulated, “the Secretary of the Interior may, in his discretion, expend of such excess, not to exceed ten percent thereof annually, for the benefit of said Indians in the same manner and in like proportion as the interest of said permanent fund.” H.R. Report No. 789, 19 Cong.Rec. 1887 (1888) (emphasis added). The bill, with this provision intact, was passed by the House and referred to the Senate. 19 Cong.Rec. 1889 (1888). The original draft therefore con *382 templated disbursements of up to ten percent of the corpus annually.
H.R. 7935 was accompanied by H.R. Report No. 789. As discussed infra, page 421, H.R. Report No. 789 primarily addressed the committee’s reasons for rejecting the 1886 agreements with the Red Lake Band and the Minnesota Chippewa Bands other than Red Lake. The report made little reference to expenditures from the principal fund, stating only that money generated by the sale of ceded land and timber “should form a permanent interest-bearing fund for all the Chippewa Indians in common,” and “the bill speaks for itself....”
In the Senate Committee on Indian Affairs, the House version was rewritten and passed in its new form by the Senate. Among other changes, the Senate version replaced the language in the House bill concerning expenditures from the principal fund with the following:
Provided, That Congress may, in its discretion, from time to time appropriate, for the purpose of promoting civilization and self-support among the said Indians, a portion of said principal sum, not exceeding five per centum thereof.
(Emphasis added.)
Setting aside differences as to the object of the expenditures, the Senate version thus differed in two ways. Annual invasions of principal were replaced by permission to appropriate “from time to time,” and ten percent was replaced by five percent. This was the language eventually adopted. Because the House did not initially concur with the proposed Senate version, it voted for a conference with the Senate. Congressmen Peel, Hudd, and Nelson were named as House conferees. 20 Cong.Rec. 191 (1888).
The House-Senate conference report recommended that the House agree to the Senate version of the bill, as modified by minor amendments. 11 The House conferees included an additional written statement with the conference report made to the House, noting generally that “[t]he Senate amendment, though in the form of a substitute, is in substance and form really the House Bill, with merely the following amendments and changes____” With respect to section 7, the House conferees stated that it was “the same in both the bill and the substitute, except that the substitute increases the interest on the permanent fund from 3 to 5 percent per annum, conformable to the universal custom with regard to Indian trust funds.” 20 Cong. Rec. 336 (1888). The additional statement was not included with the conference report made to the Senate. Id. at 273. The Senate concurred with the conference report on Dec. 17, 1888. Id. at 274. The House concurred with the conference report on Dec. 20, 1888, 20 Cong.Rec. 400. The conference report does not directly address the five percent and “time to time” phrases.
Little understanding of the five percent and “from time to time” provisions can be gleaned from the full House and Senate debates on the proposed Nelson Act. In fact, there was no debate in the House concerning expenditures from the principal fund. In the Senate, only peripheral comments were made concerning expenditures from the principal fund. 12
Plaintiff’s interpretation of the two phrases is, in retrospect, more consistent with the expectation implicit in the balance of section 7 that the proceeds of land and *383 timber would result in a permanent fund that would be disbursed on a per capita basis at the end of fifty years. It cannot be seriously contended that either Congress or the Chippewa expected the principal to be depleted. Rather, the hope was that there would both be a “large sum” to distribute at the end of fifty years and a “storehouse” to draw on for emergencies. This is in no way an understanding which is inconsistent with defendant’s interpretation, however. As of the late 1880’s, it would be perfectly consistent to anticipate both a large distribution at the end, as well as emergency distributions, each no more than five percent of the fund. It is only subsequent events which make it clear that the two desires were incompatible. Subsequent events do not force an assumption that Congress did not, in 1889, intend the five percent proviso to consume the principal fund. Initially, there is the obvious fact that the same entity, within two or three decades, was routinely making appropriations from the principal which, cumulatively, were in excess of five percent of the principal. More important, however, is that while plaintiff emphasizes the expectation of an “immense sum” to be distributed at the end of 50 years, 13 the Chippewa were also aware of the five percent proviso:
there is a clause providing that Congress may in its discretion from time to time during the said fifty years appropriate for the purpose of civilization and self support among the Indians a portion of said principal sum, not exceeding five percentum thereof. In case of the failure of crops or any unforeseen misfortune there is a store-house of money to be drawn upon for your wants. 14
Events resulted in numerous “emergency” withdrawals. Being justifiable singly, the appropriations should not be disallowed in the aggregate simply because the inevitable occurred — the money ran out. In sum, the court concludes that section 7 permitted withdrawals of up to five percent of principal on more than one occasion.
At least one of the appropriations, the Pro Rata Act, ch. 125, 39 Stat. 123 , 135 (1916), is not consistent even with defendant’s interpretation of section 7, however, since it exceeded five percent of the fund. For that reason, the court must address defendant’s alternative argument, that even if section 7 disallows cumulative expenditures out of principal in excess of five percent, each successive appropriation constituted a permissible legislative amendment to the Nelson Act because of Congress’ inherent plenary power to make such changes.
2. Plenary Power
Defendant argues that even if the Nelson Act as originally enacted did not authorize expenditures from the principal fund, the disbursements from principal that plaintiff now challenges were legally authorized because Congress possessed plenary power to administer the Band’s property for the benefit of the Band. 15
Initially, the court notes that Congress’ power to administer tribal property in a manner not contemplated in an original agreement between the United States and an Indian tribe is long recognized. As announced by the Supreme Court, “Congress possesses the plenary authority to administer Indian property, by reason of its exercise of guardianship over their interests, and that such authority might be implied, even though opposed to the strict letter of a treaty with the Indians.” Lone Wolf v. Hitchcock, 187 U.S. 553, 565 , 23 S.Ct. 216, 221 , 47 L.Ed. 299 (1903). This principle was followed in several subsequent Indian cases. See Chippewa Indi *384 ans v. United States, 307 U.S. 1 , 59 S.Ct. 687 , 83 L.Ed. 1067 (1939); Turtle Mountain Band of Chippewa Indians v. United States, 203 Ct.Cl. 426, 444 , 490 F.2d 935, 945 (1974); Choctaw Nation v. United States, 91 Ct.Cl. 320 , 396, cert. denied, 312 U.S. 695 , 61 S.Ct. 730 , 85 L.Ed. 1130 (1941); Yankton Sioux Tribe v. United States, 37 Ind.Cl.Comm. 64, 88 (1975), aff'd, 222 Ct.Cl. 421 , 616 F.2d 485 (1980).
Plaintiff concedes the fact that Congress possessed the plenary authority to administer the Nelson Act funds for the Band’s benefit. Moreover, in litigation brought pursuant to a 1926 jurisdictional act, the Supreme Court held that the Nelson Act did not constitute a conventional trust, and that as a result Congress retained the plenary authority to administer the Chippewa Tribe’s Nelson Act funds in ways not contemplated by the original act. Chippewa Indians, 307 U.S. at 1 , 59 S.Ct. at 687 . Consequently, this court has no difficulty finding that Congress possessed plenary authority to manage the Band’s share of Nelson Act principal funds for the Band’s benefit in a manner not authorized by the original act.
This power is not, however, absolute. “While extending to all appropriate measures for protecting and advancing the tribe, it is subject to limitations inhering in ... a guardianship and to pertinent constitutional restrictions.” United States v. Creek Nation, 295 U.S. 103, 109-10 , 55 S.Ct. 681, 683-84 , 79 L.Ed. 1331 (1935); accord, Menominee Tribe of Indians v. U.S., 391 U.S. 404, 413 , 88 S.Ct. 1705, 1711 , 20 L.Ed.2d 697 ; FPC v. Tuscarora Indian Nation, 362 U.S. 99, 122 , 80 S.Ct. 543, 557 , 4 L.Ed.2d 584 (1960); United States v. Shoshone Tribe, 304 U.S. 111, 113 , 58 S.Ct. 794, 796 , 82 L.Ed. 1213 (1938). Plenary authority “does not extend so far as to enable the Government ‘to give the tribal lands to others, or to appropriate them to its own purposes, without rendering, or assuming an obligation to render, just compensation.’ ” Shoshone Tribe v. United States, 299 U.S. 476, 497 , 57 S.Ct. 244, 251 , 81 L.Ed. 360 (1937) (quoting Creek Nation, 295 U.S. at 110 , 55 S.Ct. at 684 ).
Courts have attempted to harmonize the holdings of Lone Wolf and Creek Nation by developing a good faith effort test. In Fort Berthold Reservation v. United States, 182 Ct.Cl. 543 , 390 F.2d 686 (1968), the court recognized that Congress cannot at the same time act both according to its plenary power to administer tribal property for the benefit of the Indians as trustee and according to its power of eminent domain. Id. at 553 , 390 F.2d at 691 . The court stated:
Some guideline must be established so that a court can identify in which capacity Congress is acting. The following guideline would best give recognition to the basic distinction between the two types of congressional action: Where Congress makes a good faith effort to give the Indians the full value of the land and thus merely transmutes the property from land to money, there is no taking. This is a mere substitution of assets or change of form and is a traditional function of the trustee.
Application of the test was addressed in United States v. Sioux Nation, 220 Ct.Cl. 442, 451 , 601 F.2d 1157, 1162 (1979), aff'd, 448 U.S. 371 , 100 S.Ct. 2716 , 65 L.Ed.2d 844 (1980). There the court elaborated:
In determining whether Congress has made a good faith effort to give the Indians the full value of their lands when the government acquired [them], we, therefore look to the objective facts as revealed by Acts of Congress, congressional committee reports, statements submitted to Congress by government officials, reports of special commissions appointed by Congress to treat with the Indians, and similar evidence relating to the acquisition.
The “good faith effort” and “transmutation of property” concepts referred to in Fort Berthold are opposite sides of the same coin. They reflect the traditional rule that a trustee may change the form of trust assets as long as he fairly (or in good faith) attempts to provide his ward with property of equivalent value. If he does that, he cannot be faulted if hindsight should demonstrate a lack of *385 precise equivalence. On the other hand, if a trustee (or the government in its dealings with the Indians) does not attempt to give the ward the fair equivalent of what he acquires from him, the trustee to that extent has taken rather than transmuted the property of the ward. In other words, an essential element of the inquiry under the Fort Bert-hold guideline is determining the adequacy of the consideration the government gave for the Indian lands it acquired. That inquiry cannot be avoided by the government’s simple assertion that it acted in good faith in its dealings with the Indians.
This standard was expressly adopted in United States v. Sioux Nation, 448 U.S. 371, 416 , 100 S.Ct. 2716, 2741 , 65 L.Ed.2d 844 (1980).
Although the modified good faith effort test was developed in the context of constitutional limitations to the plenary power of Congress in dealing with Indian lands, the court notes that similar limitations stem from the United States’ role as trustee of Indian property. Creek Nation, 295 U.S. at 110 , 55 S.Ct. at 684 . Just as Congress cannot simultaneously exercise both its plenary power and its eminent domain power, it cannot act within its plenary power to administer tribal property for the Indians if it does not fulfill its duties as trustee. The inquiry that the good faith effort test necessitates for distinguishing between exercises of plenary power and eminent domain power are relevant for distinguishing between acts of plenary power and acts in violation of the United States’ responsibilities as trustee to the Indians. The court therefore examines the legislative history, including committee reports and statements submitted to Congress by government officials underlying congressional authorization to expend monies from the Red Lake Band’s share of the Nelson Act funds in order, initially, to determine whether Congress made a good faith effort to act for the benefit of the Band in authorizing these expenditures.
The Bureau of Indian Affairs’ (“BIA”) annual requests for monies from the principal fund for non-per capita expenses, as well as the legislative history underlying the annual Indian appropriations bills, is discussed infra, pp. 425-30. It is clear that BIA either asserted directly or implied that these monies were necessary for the well-being of the Minnesota Chippewa Tribe, including the Red Lake Band. An examination of the congressional response to the BIA’s requests reveals that several issues were repeatedly raised in the process of authorizing these expenditures. Among them were the following: (1) whether Congress possessed the legal authority to permit expenditures from the Chippewa principal fund; (2) whether expenditures from the principal fund would deplete the fund; (3) whether Chippewa principal fund monies should be expended for agency administration and salary costs; (4) whether expenditures from the principal fund were for the benefit of the Chippewa.
It is clear that Congress understood its role as trustee of these funds and undertook a meaningful scrutiny of requests made by the BIA to determine that monies from the principal fund would not be wasted or spent for the benefit of anyone other than the Minnesota Chippewa. It attempted to become knowledgeable about conditions on the Chippewa reservations, and it questioned the purposes and amounts of proposed expenditures.
The legislative history underlying congressional authorization of per capita payments from the principal fund demonstrates that Congress believed that these payments were necessary and beneficial to the Chippewa. Moreover, Congress made these authorizations generally only after confronting such issues as its power to authorize these payments, whether the principal fund would be depleted, and whether the money would be wasted if the payments were made. While the Lacey Act, ch. 2523, 34 Stat. 1221 (1907) (which officially encouraged Indian emancipation in part through financial independence) is not applicable here, the Pro Rata Act of 1916 is analogous with respect to the Minnesota Chippewa. It reflecte a determination by Congress to change the course of its administration of the trust fund. While *386 the 1916 act and subsequent per capita payments did not contain the explicit limitation of “demonstrated need,” the court finds that Congress made a good faith effort to ensure that the payments would be beneficial to the Chippewa.
An argument similar to plaintiffs here was rejected in litigation involving the Yankton Sioux. While the agreement at issue in that litigation created less of an expectation of a large remaining corpus than did the Nelson Act, it nevertheless is analogous in that it limited per capita payments to $20,000 annually. Before the ICC, the Yankton Sioux had contended that per capita payments in excess of $20,000 had been made annually for several years contrary to the agreement, thereby eliminating the trust corpus. While recognizing the restriction created by the agreement, the ICC rejected that claim:
It is a well-established principle that Congress in providing for allotment of tribal assets had absolute discretion to administer said tribal assets for the benefit of its Indian wards. See Lone Wolf v. Hitchcock, 187 U.S. 553, 566, 568 , 23 S.Ct. 216, 221, 222 , 47 L.Ed. 299 (1903). Several cases have subsequently held that in dealing with tribal funds Congress possesses authority to direct the use of tribal trust funds for any purpose it deems for the best interests of the tribe even if such use might not be in accordance with the provisions of prior treaties, agreements or acts of Congress.
Yankton Sioux Tribe, 37 Ind.Cl.Comm. at 88. The ICC held that the Lacey Act, authorizing allocation of tribal funds to individual members of certain tribes, abrogated the $20,000 limitation. The issue of whether the statutory limitation — demonstrated necessity — on such per capitas was met was subsequently decided by the Court of Claims. The court held that evidence of requests by the Indians based on two years of crop failures and resulting inadequate supplies of food and clothing was adequate to demonstrate need. Yankton Sioux Tribe v. United States, 224 Ct.Cl. 62, 103-04 , 623 F.2d 159, 180-81 (1980).
The court concludes that Congress made a good faith effort to exercise its trust responsibility in authorizing both per capita and non-per capita expenditures. Merely acting in good faith would not be a complete defense, however, if, pursuant to Sioux Nation, 220 Ct.Cl. 442 , 601 F.2d 1157 , the Band did not receive adequate compensation — in the present context, through beneficial disbursements. Nevertheless, the court finds that when considered collectively, the payments out of principal were beneficial to the Band. There is no question that the per capita payments were prompted by real needs. See discussion infra pp. 390-91; findings infra pp. 432-36. The utility of the medical and educational disbursements are discussed elsewhere. While large amounts of money were improperly spent on expenses that were acknowledged at the time to be for administrative purposes, those and other non-beneficial disbursements can be isolated and separately disallowed. In sum, the court will not disallow on a generic basis all disbursements out of principal in excess of five percent. Plaintiff may not recover for its claim that expenditures were made from the principal fund for per capita payments in violation of the Nelson Act, as originally enacted.
3. Fair and Honorable Dealings
Defendant asserts that any issues of fair and honorable dealings are not before the court and it therefore did not specifically address any of plaintiffs proposed findings of fact or conclusions of law raising fair and honorable dealings issues in its own pre-trial filings. In support of its assertion, defendant cites item four of the court’s order of February 1, 1988:
Proposed finding P-8 on page 31, “[t]he 1889 Act dealings of the United States with the Red Lake Band were less than fair and honorable,” will not be decided in the April trial. That issue will be later raised with respect to plaintiff’s land and timber value claim.
At the status conference, defendant took the position that a fair and honorable dealings claim had never been as *387 serted with respect to education and health care. Defendant did not object to plaintiff’s use of the phrase “fair and honorable dealings” so long as it meant “fairness,” but did object to any use of the language as a legally defined concept. The court advised both parties that it would be guided by the previous pleadings in determining whether issues of fair and honorable dealings were properly before the court, but instructed defendant to treat plaintiff’s fair and honorable dealings claims as if the legal definition of the phrase was being employed.
Plaintiff’s original complaint in docket 189-A, severed from docket 189 on December 23,1955 by order of the ICC, specifically invoked the fair and honorable dealings clause of the ICC Act. That complaint alleged that the United States expended money from the principal fund “in violation of its duty and obligation to the Red Lake Band.” Similarly, plaintiff’s explanation of exception no. 2, filed in 1970 for docket 189-A, alleged that “disbursements made from Nelson Act funds must be tested by trustee-beneficiary standards between the United States and the Chippewas.” Given the fact that plaintiff’s claim was brought under the fair and honorable dealings clause of the ICC Act, it would be unrealistic for defendant to believe that the standards of fair and honorable dealings would not be applied to plaintiff’s claims. The Court of Claims has previously said as much, stating that exception 30 issues must be judged according to the standards of fair and honorable dealings. Minnesota Chippewa Tribe and Red Lake Band v. United States, 229 Ct.Cl. 667, 673, 686 (1981).
In light of the court’s order of February 1, 1988 and the discussion that took place between the court and the parties on January 28, 1988, the court fails to understand the basis for defendant’s assertion that no fair and honorable dealings issues are before the court. Item four of the court’s February 1 order refers only to plaintiff’s claim that the Government’s 1889 negotiations with the Red Lake Band concerning the Band’s agreement to the Nelson Act were unfair and dishonorable. Moreover, the court’s ruling that that claim would not be adjudicated as part of the disbursements trial did not refer to other “fair and honorable dealings” claims made by the Band.
The Court of Claims has stated on numerous occasions that causes of action brought pursuant to section 2, clause 5 of the ICC Act, “fair and honorable dealings,” encompass claims not cognizable at law or equity, i.e. moral claims. Minnesota Chippewa Tribe, 11 Cl.Ct. at 237-38. The well established requisites to a claim that the actions of the United States were less than fair and honorable are: (1) the existence of a special relationship between the Federal Government and the Indian tribe; (2) an obligation owed to the tribe by the Government; and (3) the Government’s failure to fulfill that obligation, causing damage to the tribe. Aleut Community of St. Paul Island v. United States, 202 Ct.Cl. 182, 196 , 480 F.2d 831, 839 (1973); Gila River Pima-Maricopa Indians v. United States, 9 Cl.Ct. 660, 678 (1986). The ultimate issue in a claim of lack of fair and honorable dealings is “did the Federal Government do whatever it was required to do under the circumstances?” Aleut Community, 202 Ct.Cl. at 201 , 480 F.2d at 841 ; Oneida Tribe of Indians of Wisconsin v. United States, 165 Ct.Cl. 487, 494 , cert. denied, 379 U.S. 946 , 85 S.Ct. 441 , 13 L.Ed.2d 544 (1964); Gila River Pima-Maricopa Indians, 9 Cl.Ct. at 679 . These guidelines are applicable to all of plaintiff’s claims regarding the expenditure of monies from the principal fund.
The court ruled earlier that disbursements from Nelson Act funds had to be for the benefit of the Red Lake Band, the Federal Circuit having previously held that the Band was entitled to an accounting of its funds. Minnesota Chippewa, 14 Cl.Ct. at 125 . The United States undertook certain fiduciary obligations with respect to the entire Minnesota Chippewa tribe by virtue of its management of the Nelson Act funds, see U.S. v. Mitchell, 463 U.S. at 225, 103 S.Ct. at 2972, thus creating a special relationship between it and plaintiff. See Aleut Community, 202 Ct.Cl. at 196-97 , 480 F.2d at 839 . Therefore, authorization *388 of withdrawals of money from the principal fund for the Red Lake Band must meet the standards of fair and honorable dealings.
Plaintiff takes the position that the primary obligation of the United States was to preserve the trust corpus for fifty years and then distribute the principal fund in equal shares among the Chippewa living at that time. Plaintiff points to two sources of the obligations owed to the Band by the Government concerning disbursements from the principal fund. First, it puts strong emphasis on several references in section 7 of the Nelson Act to the “permanent fund,” and the statement that it was to remain intact for fifty years. Second, plaintiff relies on representations made to the Band by the commission that negotiated with the Band concerning the Band’s accession to the Nelson Act. In particular, it points to the statement made by Commissioner Rice during negotiations with the Band for its acceptance of the Nelson Act that an “immense sum” would be distributed to the Band at the end of fifty years. 16 Under plaintiff’s theory, the obligation to preserve the principal fund for fifty years, except for five percent of the fund, could not be altered without a breach of fair and honorable dealings.
Plaintiff's exclusive reliance on the Government’s obligations to the Band as stated in section 7 of the Nelson Act, and as represented to the Band by the 1889 commission, ignores the role of Congress in the management of Indian property. As previously discussed, the plenary power of Congress to administer tribal property in a manner not contemplated in an original agreement between the United States and an Indian tribe is long recognized. Turtle Mountain Band, 203 Ct.Cl. at 444 , 490 F.2d at 945 . See supra pp. 383-84. The court has already concluded that these authorizations were made pursuant to Congress’ plenary power to manage tribal property for the benefit of the Indians, and that congressional authorizations to permit the Secretary to withdraw monies from the principal fund were made in a good faith effort to benefit the Chippbwa and, in general, had that effect.
Plaintiff does not cite any authority, and the court finds none, for the proposition that plenary power may not be considered in adjudicating a claim that the Government breached its duty of fair and honorable dealings. The central guideline to claims of a breach of fair and honorable dealings states that the court must decide whether the United States did what it was obligated to do, “in the circumstances.” Aleut Community, 202 Ct.Cl. at 201 , 480 F.2d at 841 (emphasis added); Oneida, 165 Ct.Cl. at 494 ; Gila River, 9 Cl.Ct. at 679 . It is unrealistic, and in any event not required by considerations of fair and honorable dealings to ignore conditions subsequent to the initial obligations undertaken in the Nelson Act. The court finds that Congress could modify those obligations, so long as the modification is consistent with the Government’s responsibilities as trustee. The court cannot conclude that mere modification of the Government’s original Nelson Act obligations requires a finding that the United States breached its duty of fair and honorable dealings.
At the same time, defendant’s assertion that modification of the United States’ obligations to the Band through proper exercise of plenary power ipso facto would absolve the Government of liability on a fair and honorable dealings claim is also incorrect. The fair and honorable dealings' clause of the ICC Act has been interpreted to allow Indian tribes to bring claims of breach of fiduciary duty against the Government predicated upon acts of Congress. See Menominee Tribe, 221 Ct.Cl. at 515, 607 F.2d at 1335. While it is obvious that many of the same considerations come into play, the court views the range of factors which may be considered on plaintiff’s behalf in a fair and honorable dealings claim as broader than in a defense of “plenary power.” And ultimately, the question asked is somewhat different. In both cases, however, Congress’ delibera *389 tions are relevant, as are the apparent benefits to the Red Lake Band. Consequently, the court cannot ignore section 7 or the commission’s representations in determining whether there has been a breach of fair and honorable dealings. It must be determined whether modification of the obligation to preserve the principal fund, pursuant to Congress’ plenary power, was fair and honorable, under the circumstances.
In making this determination, the court is guided by the United States’ role as trustee to the Indians. Fiduciary principles normally apply whenever the Government has possession of tribal trust funds. Navajo Tribe of Indians v. United States, 224 Ct.Cl. 171, 183 , 624 F.2d 981, 987 (1980). In previously addressing the general parameters of this obligation, this court stated:
In giving flesh to the defendant’s duties, the Nelson Act and related treaties and legislation “define the contours of the United States’ fiduciary responsibilities.” Mitchell, 463 U.S. at 224, 103 S.Ct. at 2972; Pawnee v. United States, 830 F.2d 187, 192 (Fed Cir.1987). Beyond the guidance given by the terms of those documents, the nature of the Government’s duty as trustee has been variously defined. In Cheyenne-Arapaho Tribes v. United States, 206 Ct.Cl. 340, 345 , 512 F.2d 1390, 1392 (1975) (quoting Seneca Nation of Indians v. United States, 173 Ct.Cl. 917, 925 (1965)), the court held that “the United States as trustee has undertaken an obligation ‘of the highest responsibility and trust’.” See also Yankton Sioux Tribe v. United States, 224 Ct.Cl. 62, 72 , 623 F.2d 159, 163 (1980); Gila River Pima-Maricopa Community v. United States, 9 Cl.Ct. 660, 678 (1986).
Minnesota Chippewa Tribe, 14 Cl.Ct. at 228 . Under these principles, the Government has an obligation to manage tribal trust funds in its possession for the benefit of the Indians. This obligation cannot be modified by an exercise of plenary power.
Without repeating the discussion concerning plenary power, it is sufficient to say that in terms of the process of legislating, Congress fulfilled its duty to appropriate for the benefit of the Band. Nor does the backdrop of the negotiations concerning the nature of the fund alter the result. While the negotiators were wrong in stating the fund would last 50 years, the court’s review of those negotiations suggests no deliberate deception in that respect. Nor has the plaintiff satisfied the court that there was a motive to deceive.
As to the substance of the appropriations, however, it can be said that there were broad categories of expenses that, while they may have had some peripheral beneficial impact on the Band, were the responsibility of the United States, or primarily benefitted entities, other than the Band. For example, authorizations to withdraw monies for agency expenses and for public school maintenance were inconsistent with the Government’s obligation to insure that the Chippewa received the benefit of their trust fund monies. Those can and are, herein, separately disallowed. They do not so taint the balance of disbursements, however, as to dictate rejection of all disbursements from principal outside the Nelson Act scheme or the expectations arguably created by the “permanent fund.”
By far the greatest authorizations of expenditures from the principal fund were for the purpose of making per capita payments. These payments were requested annually by the Chippewa. Although permitting the Chippewa to receive their trust monies prior to the lapse of the fifty year preservation period was inconsistent with a goal of preserving the maximum principal amount, in responding to the Chippewa requests, Congress gave the Chippewa the use of their own money. Monies spent for relief of indigents, medical care, and public school tuition were consistent with the Government’s obligation to insure that the Chippewa received the benefit of their trust funds.
Authorizations made pursuant to the Act of May 14, 1930, ch. 273, 46 Stat. 279 , are illustrative. With respect to indigent relief, Congress specified that monies could *390 be used for “aiding indigent Chippewa Indians.” Id. at 302. For public school tuition authorizations, Congress specified that payment was to be made for “Chippewa Indian children.” Id. at 297. For medical care authorizations, Congress specified that such monies support “hospitals maintained for the benefit of the Chippewa.” Id. at 300. By limiting the purpose of these authorizations from the principal fund, Congress acted consistently with its role as trustee to insure that the Chippewa received the benefit of their trust fund.
Moreover, these authorizations were, on their face, for beneficial purposes. Monies made available for indigent relief and hospitals could contribute directly to the survival of the Chippewa. Monies for public school tuition could enable Chippewa children to attend and receive the benefits of public school education. The court cannot conclude that the use of plenary power to authorize withdrawals from the principal fund to benefit the Chippewa was unfair and dishonorable.
In contrast, however, authorizations for expenditure of Chippewa money for “general agency purposes” and for construction and maintenance of “public schools in connection with, and under the public school system of the State of Minnesota,” Act of May 24, 1922, ch. 199, 42 Stat. 552 , 569, permitted the Secretary to withdraw Chippewa monies to benefit non-Chippewa. Although expenditures for agency purposes from Indian trust funds were not considered a violation of law at the time, such expenditures have since been determined to be a violation of the Government’s duties as trustee. Sioux Tribe of Indians v. United States, 105 Ct.Cl. 725, 801 , 64 F.Supp. 312, 331 , vacated and remanded per curiam, 329 U.S. 685 , 67 S.Ct. 364 , 91 L.Ed. 602 (1946), on remand, 112 Ct.Cl. 50 , 78 F.Supp. 793 (1948) (affirming and reentering 1946 Court of Claims opinion). Expenditures for agency purposes constitute monies used to carry out obligations of the United States, id., and as a result were not for a purpose beneficial to the Chippewa. Such appropriations were unfair and dishonorable.
Authorization of expenditures for public school construction and maintenance were also by their nature beneficial to non-Chippewa. Although these expenditures were authorized only with respect to schools located near Indian children, the schools were not limited to Indian children. See infra pp. 400-01. Congress thereby permitted the Secretary to withdraw money that could enable non-Chippewa children to receive education. Therefore, authorizations to expend Chippewa money for the construction and maintenance of public schools, available to others in addition to Chippewa children, were unfair and dishonorable. 17
The court concludes that, with the exception of authorizations to withdraw monies from the Nelson Act principal fund for general agency purposes and for construction and maintenance of public schools, congressional exercises of plenary power allowing the expenditures were fair and honorable. Because exercises of plenary power permitting expenditure of funds for agency purposes and public school tuition were not fair and honorable, monies actually expended pursuant to these two authorizations are disallowed. A more specific application of this general scheme of allowance or disallowance requires a more detailed examination of the accounting claims.
B. Per Capita Disbursements — Non-ac counting Issues
Plaintiff offers five proposed conclusions of law with respect to per capita expenditures. The first two relate to the foregoing consideration of the “five percent” *391 proviso, and are denied on the same basis as claims discussed at part III B:
1. The payment of per capitas from the principal fund prior to the expiration of the 50 year period provided by the Nelson Act violated the Act. Accordingly, all expenditures for per capitas from principal are disallowed.
2. Use of interest-earning funds to pay per capitas destroyed the fund, and was less than fair and honorable. Accordingly, all per capita payments from the permanent fund are disallowed.
The Nelson Act contemplated at section 7 that interest earned by the permanent, or interest-bearing fund would be routinely paid out on an annual basis. One half was to be paid out to heads of families, one quarter on a per capita basis to all other Indians, and the remaining quarter to support education. No appropriations were necessary for these disbursements; they could be made directly by the Secretary. As discussed earlier, per capita payments were also made in many years out of the principal fund. The total amount was nearly one million dollars. The pro rata distribution of 1917 alone was one quarter of the then-existing permanent fund, and thus was in excess of five percent. Plaintiff is correct, therefore, that such payments out of principal were only consistent with the Nelson Act to the extent they did not exceed five percent (however construed).
As discussed earlier, Congress’ plenary power to act inconsistently with the Nelson Act is well-established. Chippewa Indians, 307 U.S. at 5 , 59 S.Ct. at 689 ; Morrison v. Work, 266 U.S. 481, 485-86 , 45 S.Ct. 149, 151-52 , 69 L.Ed. 394 (1925); Minnesota Chippewa Tribe, 11 Cl.Ct. at 231. The previous analysis concerning the limitations on Congress’ exercise of its plenary power, including the requirement that the overall conduct had to be fair and honorable, applies here as well. The court has carefully reviewed the historical documents surrounding the use of the principal fund to make per capita payments. It is clear that the pro rata payment of 1917 and the initial payments were undertaken at least in part due to a good faith change of philosophy. Sentiment was that it was better for the Chippewa, as well as other Indians, to be given more control over assets which they beneficially owned, on the understandable theory that this would result in greater economic independence from both the tribe and the Government. Subsequent appropriations seem to have been motivated more by sympathy for the severe deprivation of the Indians. It is also true, however, that subsequent appropriations were occasionally challenged by the BIA on the ground that some of the monies were being wasted, and by legislators concerned about the effect disbursements would have on the permanent fund. There was ample evidence, however, that the needs of great numbers of Indians were extremely pressing. The fact that Congress acted in the face of argument that future generations might challenge this hemorrhaging of the principal funds does not, in the debates, reflect a cavalier attitude. The court is persuaded that Congress perceived that the need was real enough and great enough to take that risk.
It is noteworthy that the question before Congress was not whether the money beneficially belonged to the Indians; clearly it did. The question was when they would get control of the money. The advantage of delay was that the corpus would be protected, and those persons alive at the end of fifty years would get a large sum of money. Presumably the larger the sum, the more economically useful it would be. It is important to note, however, that the Nelson Act did not provide for retaining the interest in an interest-bearing account. In any event, it was fully consistent with the Act to pay out all interest. The court cannot, under these circumstances, conclude that Congress did not act in good faith, or that it was unfair and dishonorable for Congress to attempt to assist individual Indians with legitimate needs by making premature payments of principal.
Other challenges to per capita payments are discussed in connection with the accounting exceptions.
*392 C. Education Expenses
Plaintiff asks the court to make eleven conclusions of law with respect to disbursements for education. They consist of both accounting (expenditure-specific) and non-accounting (generalized) claims. They will generally be considered in the order plaintiff established, except for those which logically must be considered together. As an initial matter, the court notes that it ruled on December 23, 1987 that as to those expenditures which on their face were valid, plaintiff had the burden of going forward with evidence to persuade the court that the expenditure was improper. Although some of the challenged expenditures were questionable at first glance, as to the expenditures addressed in proposed conclusions 1, 2, 3, 6, 7,10, and 11, plaintiff bore the burden of going forward with evidence or legal argument to persuade the court the disbursements should not have been charged to Red Lake Nelson Act funds.
1. Plaintiffs Proposed Conclusions 1, 2, and 11
Proposed Conclusion No. 1 All, or a significant, but undetermined, portion of the Nelson Act funds charged to education were for the benefit of the United States and not for the exclusive benefit of the Red Lake Band and are disallowed. Proposed Conclusion No. 2 All, or a significant, but undetermined, portion of the Nelson Act funds charged to education were used to create and administer a system that was greatly below the standards of effective education, failed to educate Indian children and are disallowed. 18
Proposed Conclusion No. 11 None of the expenditures for education may be charged against Nelson Act money since a significant, but undetermined, portion of the expenditures were wasted in terms of results obtained and otherwise.
To the extent proposed Conclusion No. 1 challenges the overall approach to education at Red Lake, and the overall results, it is discussed in connection with conclusions 2 and 11, and is rejected. To the extent specific improper expenditures were identified, Conclusion No. 1 is accepted in connection with conclusions 5, 8, and 9. It is otherwise rejected. Although not expressed in those terms, the court assumes that plaintiff’s challenge to education disbursements in proposed conclusions 1, 2 and 11 is, at least in part, that the Government’s action or inaction was unfair and dishonorable.
The court has carefully reviewed the specific examples of poor educational results and methods pointed to by plaintiff. Most of these are addressed in the educational fact findings. There are also numerous specific examples of good reports, small successes and competent individuals. Some of these are addressed in the educational findings. Many other favorable references are present in the record. 19 The *393 plaintiff persuades the court that the generalizations to be drawn were, on balance, unfavorable. Facilities, on balance, ranged from poor to fair. Personnel ranged from poor to excellent, but the court is satisfied that the boarding school system on the reservation tolerated more incompetence than comparable white schools. Methodologies employed merely had modest success in teaching minimal English language skills and in preparing students for unskilled or semi-skilled jobs. Comparable public schools in rural northern Minnesota, while not on a par with schools in more developed areas, still offered high school and more varied instruction, had greater success, and employed more trained personnel than Red Lake Boarding Schools.
The court has also read substantial portions of the principal treatises or monographs submitted by plaintiff which relate to government policy toward Indians in general for the period in question, and specifically, those which address educational policy, practice, and result. It is a fair summary to conclude that they are generally critical of ways in which the policy of assimilating Indians was implemented in the late 1800’s and early 1900’s. Beginning in the 1930’s, the policy was attacked by reputable persons as paternalistic, underfunded, and unsuccessful. BIA policy was particularly criticized for its low expectations of Indian education, low salaries, antiquated methods, and its heavy reliance on boarding schools. Having made these general findings, however, the court nevertheless rejects proposed conclusions 1, 2, and 11 for a number of reasons.
First, it has become apparent to the court after the detail provided by trial and post-trial examinations of exhibits and argument, that plaintiffs real argument is with BIA policy as it applied to all reservations throughout the United States. Plaintiff relies on the cumulative weight of anecdotal evidence from Red Lake and on extensive documentation of nationwide BIA policy in its efforts to prove its case. Setting aside for a moment the merits of this broadside, it is obvious to the court at this point that defendant’s motion to dismiss as to the statute of limitations is well-taken insofar as plaintiff is generically challenging any educational expense on the theory that all such expenses were of inferior quality. The same analysis applies to the Band’s claim that disbursements for medical attention were of inferior quality.
In order not to be time-barred, plaintiff’s present theory had to be sufficiently pleaded in the original complaint or exceptions so as to put defendant on notice. Plaintiff begins its post-trial argument that the specific education and medical claims at issue were pleaded with a reference to paragraph 6 of the original complaint:
6. This action is brought to determine the rights and claims of plaintiffs arising out of the administration of the property *394 and affairs of plaintiffs and to recover damages sustained thereby; to recover money illegally and improperly expended by defendant; to obtain an accounting for all property and money coming into the possession of, held/and or administered by defendant and their predecessors.
While this language is, as the Band points out, notice of its claim for an accounting, and can be viewed also as preserving a claim for deficiencies reflected by an accounting, it does not serve as notice of a claim that all education and medical expenses would be challenged as generieally without benefit because of poor quality.
Plaintiff also points to paragraph 14 of the complaint:
14. Defendant has illegally expended the proceeds from the sale of said lands contrary to the provisions of the [Nelson Act], and other acts, using said funds for various purposes, including education, medical attention, highway administra-tion____
This language is discussed elsewhere as not giving rise to claims based on the Constitution and state laws. See supra pp. 375-78. A fortiori it does not support the claims at issue here. The least strained reading of this paragraph is that there are provisions of the Nelson Act (and other, unspecified statutes) which forbid in some respect expenditures for education, medical attention, etc. To the extent the Nelson Act is the basis for the argument, that claim is properly before the court and is dealt with elsewhere. See supra pp. 378-88. However, to suggest that disbursements for medical attention, for example, were “illegal” in that they violated the terms of a statute does not, to the sense of the court, embrace the idea that medical attention disbursements were of inferior quality.
The only other language upon which plaintiff can rest is the assertion in exception 30: “failure to furnish adequate information and exception for expenditure in violation of law and standards applicable to the trustee-fiduciary relationship.” Plaintiff states in support of the exception that “there is nothing to show that the disbursements were for the exclusive benefit of the Chippewas.” The concept of “not for the exclusive benefit of” is a well-known one in Indian law, as plaintiff has amplified in its briefs. The instances in which the criteria has been applied, however, do not include wholesale disqualification because entire classes of expenditures were generieally “inferior” as compared with goods and services in the white community. The typical manner in which the concept is applied was described by plaintiff in its statement in support of exception 30: “for example ... there is nothing to show delivery for the exclusive and direct benefit of the Tribes, (a) as distinguished from use by the United States for agency and administrative purposes, and for Federal personnel, (b) as distinguished from delivery for the benefit of individual Indians, or (c) as distinguished from delivery in payment for labor performed or produce sold by individual Indians to the United States.” Plaintiff cites Assiniboine Tribe v. United States, 77 Ct.Cl. 347, 361 (1933), where the clear context is one of Indian benefit versus some direct benefit of the Government. Likewise, in its pre-trial submission of March 3, 1986, which was to be a comprehensive statement of its claims, plaintiff makes no mention of a claim that educational or medical expenses were, as a class, all inferior, and therefore not for the benefit of plaintiff. Instead, under the category “disbursement claims,” it recites that it had to await the results of the document production to determine which expenditures were not allowable as not being “for the exclusive benefit” of the Band. No other detail was given. The court is not suggesting that a claim stated there for the first time would have been timely. Rather, the absence of any mention of plaintiff’s current theory 35 years after the case began illustrates that the current claim is indeed new.
Nor does the court find at all persuasive plaintiff’s argument that it could not have known of the specifics of the “quality” claims until the document production. Much of the evidence relied on by plaintiff, and particularly those critiques and histori *395 cal commentaries upon which it places greatest reliance were not produced as part of the backup documents. Instead they were generally available literature. Plaintiff’s lead expert in education (Dr. Clifford Hooker) testified he did not examine, much less rely on, the vouchers, which comprise the bulk of the non-per capita disbursement documents. Plaintiff has provided no factual basis for a conclusion that members of the Band were excusably ignorant of BIA policy, or that they could not evaluate its effects. It is noteworthy in this respect that many of the criticisms leveled by plaintiff were contained in annual evaluations of the BIA itself and in the contemporaneous reports upon which plaintiff relies in part. Indeed the very nature of the claims is such that the Band would have had to be knowledgeable no later than 1951.
For the above reasons, the court grants defendant’s motion to dismiss with respect to plaintiff’s claims embodied in Conclusion No. 1 (other than specific expenses disallowed in connection with other conclusions), Conclusion No. 2, and Conclusion No. 11. Claims represented by the other conclusions are embraced by exception 30 and are not dismissed.
The conclusion reached above is admittedly a close one, and required an airing of plaintiff’s claim. For that reason, the court goes on to analyze other legal and factual reasons why the claim fails.
One of plaintiff’s education experts, Dr. Clifford Hooker, placed great emphasis on the conclusions of the Merian Report, see infra pp. 452-53, and the NACE Report, see infra pp. 453-54. The latter, for example, is quoted at length by Dr. Hooker. An excerpt gives an abbreviated overview:
That the educational system was not set up developmentally for the Indian was an initial and fundamental mistake. Limited money expended as an inadequate plan was appallingly wasted because it could not give needed results. Additional money spent on an effective plan would have greatly shortened the period of expenditure and in the long run save large amounts of public money____
Insofar as tribal occupations and traditions are still a part of the self-sustaining life of his group, Indian activities, however foreign to our own civilization, should be an appreciated part of the program for Indian training. In the case of the children, one or more generations removed from pure tribal activities and customs, the vocational activities necessary for self-support in the American communities ought to be an essential part of their practical education. For them, skilled trades and occupations must take the place of the unskilled labor which is too generally all the Indians have to sell us.
Boarding schools, which remove children from their homes and tribal connections, should certainly not be maintained for elementary school children.
* * * * $ s¡t
Adapting education. As local adaption is necessary, the implication is plain that the management of the educational process must be highly decentralized. This is in almost complete contrast to what is now being done. The largely uniform course of study which has been sent out from Washington is the reverse of the end.
NACE Report pp. 50-52.
The Meriam Report also took issue with numerous policies in Indian education, including routinization, too much discipline, lack of involvement of parents, too much time spent on non-educational activities intended primarily to support the schools, and lack of theory. The existing policy at the turn of the century is described in the fact findings and contrasts with the preferred methodology and philosophy set out in the Meriam and NACE Reports. This policy was described in authoritative detail by Dr. Hooker, and by Dr. Helen Hornbeck Tanner, a noted ethno-historian who testified for plaintiff. Two key elements of that earlier policy were an overall goal of assimilation into the prevailing culture and heavy reliance on boarding schools. There is no question that the logic of these two reports and other dialogue generated in the 1920’s and 30’s resulted in changes in edu *396 cational policy. They perhaps accelerated the shift away from boarding schools and reservation day schools to attendance at public schools. Government policy also became less hostile to preservation of aspects of Indian culture previously seen as an impediment to assimilation.
Despite these changes, the court is unwilling to say that policy toward Indian education from the 1880’s to the 1930’s was “wrong.” 20 It is not the function of the court to set policy. Nor can good faith errors of judgment be viewed in retrospect as a basis for disallowing entire classes of expenditures. Nor is the test merely one of comparative results, as plaintiff urges. The court will not insert itself into the role of the trustee to second guess decisions made 60 to 100 years ago in a totally different environment. No doubt many mistakes were made, but they do not rise to the level of unfair and dishonorable dealings, and short of a Congressional determination to expiate those mistakes on a comprehensive, non-legal basis, the court will apply traditional precedent developed in this court and its predecessor court pursuant to the ICC Act. In the court’s view, that approach requires an assessment of particular disbursements, and does not permit wholesale rejection of expenditures because the overall results could have been better if different educational theories had been applied.
Moreover, the court specifically rejects plaintiff’s contention that the perceived defects in. BIA education policy were deliberately contrived to affirmatively benefit the Government. Dr. Hooker asserts, for example, that the real motive behind federal policy was to have Indians assimilated as a “servile underclass.” Plaintiff asks the court to find (P-37) that the “conscious intent of federal policy in the decades following 1900 was precisely to train Indian men only for menial, unskilled labor, and Indian women only for domestic service.”
In addition to other materials, the court has reviewed every annual report of the Commissioner of Indian Affairs (“Commissioner”) beginning with 1890. While there is, to modern ears, a flavor of paternalism and occasionally condescension in these reports, the court is persuaded that the general belief was that the Indian was, if removed from tribal influence, and given sufficient prolonged exposure to the culture prevailing outside the reservation, equally educable as other Americans. Those responsible for educating Indians typically expressed great confidence in the intelligence and teachability of Indians. A few excerpts from the annual reports are illustrative:
If the average of intelligence among the Indians is to be brought up to the level of that of the other peoples which compose our nation, and they are prepared to compete in life’s struggles on an equal basis, provision must be made whereby those among them who are specially gifted with talent, ambition, and energy may procure a higher education than is offered to them in the reservation and training schools. Already a very considerable number have shown both the desire and ability to pursue higher studies. Several are now successfully teaching, or fitting themselves to teach, others are practicing medicine, some are preaching, and still others are preparing for the practice of law. The desire for these higher studies is steadily increasing and only needs a little fostering to be productive of the best results. A common school, industrial education for all, a liberal and professional education for the worthy few, with a fair field and free competition, is all that is asked for Indians as for others.
Report of 1890.
It is now universally conceded by every intelligent observer that the Indians can be educated, that the Government schools are eminently successful, and that it is a wise expenditure of money from the point of view of economy, phi *397 lanthropy, and justice to provide for them suitable educational facilities.
******
The rudimentary education supplied in these Government institutions, which are necessarily, as yet, on a low plane, ought to be supplemented in many cases by an enlarged course of study. Many Indians of both sexes are showing marked capacity for scholarship and are evincing an eager desire to acquire that broader culture which will fit them for leadership among their people. One young man thoroughly educated is worth, in many respects, more to his people than a considerable number with only a common-school training.
There is an especial call among the Indians for persons of their own race who are competent physicians and lawyers.
Report of 1892.
Indians are found to develop into apt students as soon as they master the English language____
Report of 1895.
A larger number of Indian pupils have been enrolled in the public schools than ever before. It is frequently reported that they rank with the white children in their academic work.
Report of 1912.
[I]f the Indians of this country are to become productive citizens the educational program must be carefully planned and vigorously carried on. While this is a time when economy in every line is necessary it should be remembered that to allow children to grow up in ignorance and untrained, and therefore to continue to be unproductive, is false economy. Every child of every nationality in this country is entitled to an opportunity to get an education. Of all nationalities, certainly the Indians, the native Americans, are entitled to educational opportunities equal to those of all other nationalities.
Report of 1921.
Nor was there any lack of self-evaluation or self-criticism within the BIA. Many of the conditions criticized by plaintiff now were frequently described in the annual reports:
[I]t is very difficult to secure competent persons able to pass the requisite civil-service examination who are willing to accept positions offered them, by reason of the small salaries, the numerous hardships, and the severity of the labors involved.
Report of 1892. 21
Much treasure has been expended by the Government in the erection of school buildings, but in most cases these are not only lacking in the simplest requirements of architectural grace, but quite deficient in the provisions made for sewage, lighting, ventilation, and sanitary requirements generally. As a rule schoolrooms and dormitories are wholly without provisions for ventilation except what may be afforded through windows, doors, and seepage. There are many simple and inexpensive ways for correcting such shortcomings, and a circular letter describing such simple expedients, accompanied by a request on the part of the Indian Office to agents and superintendents to give immediate attention to this matter, would do much to improve the sanitary conditions of the buildings and to lessen sickness and death among the Indian children.
In this connection permit me to protest against the not uncommon practice of crowding children into dormitories, placing beds almost in close contact, and putting from two to four children in one bed.
Report of 1894.
[T]he long-continued Government and philanthropist policy on pauperizing the Indians, the conservatism of agents, the incompetency of employees, were ob *398 stacles which have required time to overcome.
Report of 1904.
It has not always been possible to employ sufficient labor to perform this institutional work, much of which is without value as instruction, but it has been done by Indian pupils who have thus given more of their time to it than is consistent with the best educational results.
Report of 1919.
Such training has been given by the boarding schools, though imperfectly. While results bearing upon the future life and activities of the pupils have been attained in many cases, this has come about through practical training but without competent and systematic instruction because funds have never been available for employment of expert instructors and for the necessary equipment.
Report of 1929.
This latter lament is typical of the constant requests by the BIA for greater funds, suggesting that the administration of the BIA advocated on behalf of the plaintiff.
One of the continuous themes, beginning even in the 1890’s, was that boarding schools were an unfortunate interim measure, but that children should be moved to public school with non-Indian students as quickly as possible. While boarding school conditions were sometimes deplorable, the court will not, nearly 100 years later, fault their use. At the end of the last century, according to the great weight of the reports, there was still significant hostility among non-Indians to attendance by Indians in public schools. Distances between Indian families and neighboring public schools were often great. In boarding schools, children would be immersed in an educational setting which minimized the effect of parental suspicion of schools and the effects of camp life. Moreover, lack of fluency in English was seen as one of the greatest impediments to assimilation, and it was reasonably perceived that a residential setting would enable Indians to attain fluency more rapidly.
In sum, the court rejects, on a factual basis, the finding that all education disbursements for plaintiff are to be disallowed as not having been for the benefit of the Indians. On the same analysis the court concludes that the Government’s actions and inaction with respect to education were not unfair and dishonorable.
A related but independent reason to reject plaintiff’s argument also exists. In its pre-trial filings and through its expert witnesses, plaintiff has taken the position that they would have been better off if none of the educational expenses had been made. Plaintiff has hereby undertaken a substantial burden, although one that flows logically from its entire approach to education disbursements as a class. This view was proposed most comprehensively in plaintiff’s post-trial proposed findings of fact:
The Red Lake Indians “would have been better had there been no education effort of this kind.” Other agencies such as “the public school system ... and various religious missions or organizations” would ultimately have stepped in and provided education of higher quality than the Government offered. Minnesota public schools are one “possibility” of an alternative that might have “stepped in” had the Government provided no education at Red Lake, but there were others.
PPFF at 136 n. 201 (citing Dr. Hooker).
Education is an investment____ When we put money, resources into people, we make an investment that our history has demonstrated produces rather substantial dividends over time____ Had we provided ... [a] strong educational program, say, at the turn of the century for those children who later became the parents ... we would have had a very different set of parents and ... a very different set of children to educate in the 1920s____ So, over a long period of time, we would have saved money in the process and the results would have been substantially different.
PPFF at 141 (quoting Dr. Hooker, Tr. 2337-2339).
*399 Our schools have never been properly equipped or adequately manned. In fact they have done so poorly often that our Indian wards, although not trained themselves as educators, have been able to pick flaws in our planning. This has been unfortunate. We ought not to allow it to recur. The Red Lake school and the Cross Lake school and the Pons-ford school and one or two other small ones are the only distinctive Government Indian schools in northern Minnesota. These should be maintained efficiently under all circumstances. Many years ago the mistake was made when some one decided that only Chippewa funds would be used for educational purposes in Minnesota and then only one-fourth interest on the big fund. This fund was never adequate for the needs in the Chippewa country but we have tried to make it do for a period of years.
PPFP at 141-42 (quoting letter from BIA to Red Lake Superintendent, November 8, 1922).
Plaintiffs proposed findings are premised on the unproven assumption that if no money had been taken from the plaintiffs trust funds, then an equal or greater amount would have been better spent by others to fill the vacuum. Plaintiff is notably vague on how that vacuum would have been filled, although Dr. Hooker makes the suggestion that the State of Minnesota or religious groups “would ultimately have stepped in and provided education of higher quality.” That assertion is not only unproven, but probably unprovable. First, as the court has found elsewhere, during most of this period, virtually no Red Lake Indians would have qualified for free public education. Second, there is no proof that the State of Minnesota would have been more successful in delivering Indian education services than was BIA. In this connection, two facts are salient. The first is that, at times, over 100 children on the reservation were not attending any school. This was in part due to lack of capacity. Yet if plaintiffs theory held, the State of Minnesota would not have permitted that condition to exist. Second, there is at least some evidence that the first public school at Redby was so inadequate that Indian children were seen as better off in government schools.
Finally, the court cannot accept the premise that the idea of spending no Red Lake funds on education would ever have been realistic, given the Indian’s general interest in schools and the undeveloped character of the area surrounding the reservation. Plaintiff’s argument, the court concludes, is at best post facto speculation.
In sum, plaintiff’s proposed education conclusions of law 1, 2, and 11 are rejected.
2. Plaintiff’s Proposed Conclusion No. 3
All Nelson Act funds expended from principal and charged to education were not authorized by the Nelson Act.
This proposed conclusion is rejected based on the analysis, supra, at pp. 383-86.
3. Plaintiff’s Proposed Conclusion No. 4 Nelson Act funds used to pay the salaries and expenses of federal employees performing substantial administrative duties for the United States are disallowed. (E.g., the position of Superintendent of schools at Red Lake and the principal at Cross Lake).
The court’s findings infra at 454-55 are sufficient to carry plaintiff’s burden that a very significant part of the Red Lake and Cross Lake superintendents’ salaries between 1907 and 1920 should be charged to agency expense. Since defendant’s only response is that the number of examples is not large, it offers no basis for distinguishing between agency and school expense. The court therefore finds that the salary of the Red Lake and Cross Lake superintendents’ salaries from creation of the Red Lake agency in 1907 through 1920 is disallowed.
4. Plaintiff’s Proposed Conclusion No. 5 Expenditures charged to education disallowed (a) for the defendant’s failure to prove that the expenditures were for the exclusive benefit of the Red Lake Band, or (b) where the expenditures were for *400 mixed use of the Band, the United States, or others.
This conclusion lists four particulars.
Item 1. The defendant used a portion of the Red Lake boarding school to house a Minnesota public school for white children of agency employees, during the years 1911-1922.
Defendant operated a public school in one room of the Red Lake Boarding School between 1911 and 1922. Defendant’s response is that children of Indian employees were allowed to attend. That does not alter t

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/6826430. Public record. Not legal advice.