Indian Trust Funds and Compensatory Justice: A Long View

In 2008, the federal government extended an unprecedented settlement of $3.4 billion to the plaintiffs in Cobell v. Salazar, the nation’s largest class-action lawsuit to date. Cobell brought challenges to the U.S. Treasury and Interior Departments for negligence in their oversight of Individual Indian Money (IIM) accounts, funds held in trust for indigenous beneficiaries by the federal government. Yet despite the publicity garnered by the Cobell suit and settlement, scholars have yet to uncover the centuries-long history of Indian trust fund mismanagement in the United States. This paper will discuss the prehistory of the IIM accounts in order to examine how – and to what ends – the federal government gradually assumed a fiduciary role over indigenous polities across the nineteenth century. Legal scholars frequently attribute the emergence of a federal trust responsibility to Justice John Marshall’s decision in Cherokee v. Georgia, in which Marshall articulated the concept of “domestic dependent nations.” I turn from the courts to the administrative record in order to argue that the government assumed a fiduciary role -- and cast indigenous peoples as wards -- over the course of its quotidian management of indigenous wealth during the era of Indian removal. By wedding payment for lands to a penetrative apparatus that compromised indigenous political and economic autonomy, trust funds enhanced federal control over indigenous polities. Offering trust funds allowed the federal government to incorporate the management of indigenous wealth to a largely self-regulated Indian policy, a strategy explicitly embraced to avoid military revolt and secure indigenous fidelity to the U.S. For these reasons, the history of Indian trust funds can be read as a cautionary tale to parties seeking compensation from the federal government.