Foundation: Allottees will get fair market value under Cobell

By Alysa Landry
Special to the Times

WASHINGTON, Nov. 7, 2013

This is according to The Appraisal Foundation, a congressionally authorized nonprofit agency that provides financial support and guidance for government processes. The foundation last week released a review of the Interior Department's valuation plan for the buyback program.

The plan will guide the department's efforts to determine the value of each tract in the most efficient way. According to Interior Department data, there are 2.9 million purchasable fractional interests, or 10.5 million acres owned by 220,000 individuals on 150 reservations across the country. That includes 4,355 tracts comprising more than 685,000 fractionated acres on the Navajo Nation.

The review "confirms that the steps we are taking to determine fair market value for offers to landowners are cost-effective and conform to the best practices for valuation," Kevin Washburn, assistant secretary for Indian Affairs, said in a prepared statement. He promised a "transparent process to provide fair market value to tribal landowners."

Fractionation is a problem more than 125 years in the making. It stems from the General Allotment Act of 1887 -- also known as the Dawes Act -- which allotted sections of reservation land to individual American Indians and heads of households. The act aimed to "civilize" the Natives and assimilate them into society by allowing them to own land and become citizens of the United States should they "adopt the habits of civilized life."

As time unfolded, however, the land became increasingly fractionated, meaning the number of heirs of original allottees grew exponentially until some tracts had hundreds or even thousands of owners. Because they have so many owners who aren't always in agreement or even communication, allotments are lying idle instead of being developed or leased.

As part of the Cobell Settlement, the largest class-action lawsuit in history, the Interior Department plans to spend $1.9 billion over the next decade to acquire claims to fractionated lands and return that land to tribal control, freeing it for development.

Each claim is worth at least $75. The Interior Department plans to start buying land at the end of the year and spend two-thirds of the money by 2016. A total of $103 million is available to buy back land from Navajo allottees.

The overall goal of the buyback program is to consolidate land and reduce the number of fractional interests, which increased throughout Indian Country by more than 12 percent from 2007 to 2011. The program is completely voluntary, so no interest owner will be forced to sell.

The Cobell settlement, finalized one year ago, began in 1996 when Elouise Cobell, a member of the Blackfoot Confederacy, claimed the federal government mismanaged Indian trust funds. Under the Dawes Act, the government retained authority to issue leases on allotted land for mining, grazing, timber and drilling. It was supposed to distribute to Indian allottees the revenue raised by those leases.

While working as an accountant on the Blackfeet reservation in Montana, Cobell discovered that the government was not accurately reporting money owed, interest earned or payments made to half a million individuals with accounts originating from the Dawes Act. Those accounts ranged in size from 35 cents to $1 million.

Cobell's lawsuit spanned three presidencies, went to trial seven times and was heard in federal appeals court 10 times. The $3.4 billion settlement, which includes the $1.9 billion buyback program, aimed to correct "historical accounting irregularities," though Cobell argued that individuals were owed tens of billions of dollars.

The Interior Department plans to negotiate different agreements with each tribe to meet individual needs in the buyback program. The valuation plan, approved by The Appraisal Foundation, will allow the department to use mass appraisal techniques in which values are assessed simultaneously for many tracts of "similar, non-complex, vacant lands that have comparable land sales available."

"The land buy-back program is a massive undertaking," said David Bunton, president of The Appraisal Foundation. It deserves "the highest quality in appraisal standards and techniques."