Vermont Law Top 10 Environmental Watch List 2015

Obama Administration Settles with Navajo Nation for $554M

The $554 million settlement marks a commitment by this administration to right past wrongs related to mineral extraction on Navajo lands.

Navajo Nation President Ben Shelly presents Secretary of the Interior Sally Jewel with a blanket at a settlement agreement signing ceremony in September 2014. Image courtesy Mark Henle/The Republic.

In September 2014, at Window Rock, Ariz., the Obama administration reached a settlement with the Navajo Nation after years of litigation over mismanagement of lease revenues and royalties from mining, ranching, and timber harvesting on Navajo trust lands. The United States will award the Navajo $554 million to settle claims arising from the federal government’s mismanagement of tribal trust funds dating back to 1946, making this the single largest settlement between the United States government and an American Indian tribe, reported The New York Times. Navajo Nation President Ben Shelley said he was pleased that the settlement was reached after such a long and hard-fought process.

The Department of Interior has a fiduciary responsibility over all funds generated from oil and gas leases, timber sales, grazing activities, and mining activities on the 27,000 square miles of lands that constitute the Navajo reservation, which it is supposed to invest, manage, and disburse to the tribe, as a trustee would for an investment beneficiary. Yet, the DOI has historically failed to collect all fees and royalties due, held most of the money in the federal coffers, and declined to accurately account for and distribute it to the tribe, which resulted in a 2006 lawsuit filed by the Navajo Nation against the federal government, Navajo Nation v. United States, seeking over $900 million in damages. The September settlement of this lawsuit represents the largest of its kind in United States history, potentially indicating a sea change in federal Indian trust policy and true opportunities for increased tribal environmental stewardship. According to Secretary of the Interior Sally Jewell, “This settlement reflects our continuing commitment to upholding the federal trust responsibility to Indian Country and to building strong, prosperous and resilient tribal communities.” It was further bolstered by the Department of Interior’s announcement on Dec. 2 that it would disburse over $13.4 billion in revenue from mineral leases to states, local governments, and tribes “to develop infrastructure, provide healthcare and education, and support other critical community development programs, such as senior centers, public safety projects, and youth initiatives.”

The fact that the federal government manages any funds on behalf of the Navajo Nation is a relic of a centuries-old colonial U.S. policy, sanctioned by Congress and the Supreme Court, which established aboriginal nations as tenants of the federal government on their own lands.  After the Supreme Court announced the “Doctrine of Discovery” in the landmark case Johnson v. M’Intosh in 1823, the federal government’s seizure of native lands, by force or by treaty, established federal government ownership and eliminated all but a native right of occupancy. In the case of the Navajo Nation, both methods were used. Beginning in the 1850s, U.S. military commanders attempted to forcibly remove the Navajos from their native homeland in the four corners region of Arizona, New Mexico, Utah, and Colorado. The Navajo resisted, but were outnumbered by federal forces, and in 1863, Gen. James Henry Carlton rounded up all of the Navajo who had survived the battle over removal—mostly women, elderly, and children—and marched them 450 miles east to a small plot of land in Bosque Redondo, N.M. The Navajo refer to this forced removal as “The Long Walk.”

After four years of disease and starvation killed almost 2,300 Navajo at Bosque Redondo, the federal government decided to return them to their native lands, but as mere tenants of the federal government, on lands that were formally designated as the Navajo Reservation. Thereafter, the Navajo had the right to occupy the reservation, but they no longer held fee title to it. In 1887, as part of its attempt to break up native nations and assimilate all native peoples into the general populations of the various states, Congress passed the Dawes Act, which offered native families fee simple title to a parcel of land within the boundaries of the reservation if they could occupy and farm it for a period of 25 years. The federal government opened what later became the Navajo trust lands to settlement under the Dawes Act, but not all of the parcels were capable of being settled and farmed because of their aridity.  The parcels that were opened to settlement and either not settled or abandoned, together with the lands contained within the exterior boundaries of the formal reservation, became “trust lands,” owned by the federal government and ostensibly managed for the benefit of the Navajo people.

Although not suitable for western-style farming, many of the Navajo trust lands overlie significant natural gas deposits, coal, vanadium, and uranium reserves; contain Ponderosa Pine timber reserves and “red dog,” a type of valuable surface material used in road construction; and are fit for seasonal livestock grazing. Pursuant to federal laws, such as the Indian Mineral Leasing Act, the Navajo Nation can request that the secretary of the interior authorize mining, grazing, and other activities on these lands and, if the secretary approves, a lease is executed and royalties follow. All lease payments and royalties, however, are paid to the secretary of the interior, not the tribes. The secretary is then responsible for holding, managing, and ultimately, redistributing the funds to the tribe.  

In the case of the Navajo Nation, the secretary of the interior has never made an accounting to the tribe of the funds it has held and managed, as fiduciary for the tribe, since 1946. Over the past 70 years, the secretary has collected funds pursuant to various leases with extractive industries, but has never provided a comprehensive report to the tribe detailing the amounts received, the interest accrued, and the disbursed payments. The secretary has also failed to collect certain amounts owing from various lessees.

The $554 million settlement agreement signed in September hopefully marks the end of this protracted period of the federal government’s failure to act as a true fiduciary for the Navajo Nation. It also hopefully marks the end of the federal government leasing native lands for harmful uses such as uranium, coal and natural gas mining—and profiting from the resulting environmental harms inflicted on the Navajo people. The Department of Justice has indicated that the government will transfer the award to the Navajo Nation as soon as two months from the settlement date. To determine how the money will be allocated, Shelley said the tribe will host town hall meetings across the Navajo Nation. Members of the legislative branch of the Navajo Nation, the Navajo Nation Council, were quick to remind their people that this settlement only affects the mismanagement of previous trusts. Lorenzo Curley, who was involved in the negotiations with the Obama administration, said that this will not hinder the Navajo Nation from pursuing claims related to the government’s present or future mismanagement of natural resources on Navajo lands.