Osage wins ruling in mineral rights case
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By Tony Thornton and Chad Previch
Published: September 22, 2006
PAWHUSKA -- The federal government failed to collect and invest millions of dollars in oil lease royalties owed to the
Osage Tribe and its members, a
Washington, D.C., court ruled Thursday.
The exact amount owed will be determined by the
U.S. Court of Federal Claims unless the two sides compromise before a Nov. 2 hearing.
A 61-page ruling released today covers allegations of the federal government’s negligence dating to 1976. However, the tribe’s lawsuit examined just five months between 1976 and 1989.
“This finding is a long time in coming,”
Osage Principal Chief Jim Gray said Friday at a news conference in Pawhuska.
“The Osage Nation government filed this case six years ago, and our people and the shareholders in the royalties of the Osage Mineral Estate have waited for justice for many years.”
Phone messages left with
Bureau of Indian Affairs officials were not immediately returned.
The ruling has possible national implications, for it could affect the more widely known Cobell lawsuit. In that decade-old, class-action lawsuit, American Indians nationwide claim they are owed up to $27.5 billion for similar negligence by the government.
This case involves only the Osage Reservation -
Oklahoma’s only designated Indian reservation - which covers all 1.5 million acres of
Osage County.
That county is one of the top two oil-producing counties in the nation, the ruling states. Gray said it has generated more than 1 billion gallons over the last century.
Judge Emily C. Hewitt in
Washington found that the government made these failures:
To collect royalties based on the highest offered prices.
To collect full royalties during price controls.
To promptly deposit money for the tribe.
To maintain appropriate balances.
To invest the money according to law.
Under federal rules developed after the 1906 law that created the Osage Nation, the local Bureau of Indian Affairs office was to collect nearly 17 percent from the sales of oil obtained from Osage County. That money was to be placed in interest-bearing accounts to benefit tribe members.
Over the years, the BIA changed its rules several times regarding this collection. Because these rule changes tended to benefit oil producers to the tribe’s detriment, the government shirked its duty as the tribe’s trustee, the ruling indicates.
The ruling followed a 10-day trial featuring testimony from 17 witnesses, including tribal members, local Bureau of Indian Affairs officials and a
U.S. Treasury Department official.
It also included testimony of various government price controls attempted after oil dipped to $9 per barrel in the mid- to late 1980s, and allegations of document shredding by federal officials in Pawhuska.
The court denied the tribe’s claim that the government failed to employ enough workers in its
Osage Agency to inspect oil tanks and verify company’s stated amounts of oil sold.
Judge Hewitt also denied the tribe’s claim that the government failed to collect late fees from oil producers.
However, Hewitt concluded that the government failed until 1990 to establish a place in Pawhuska to deposit royalty money it collected.
Gray didn’t respond directly to whether his tribe should trust the federal government now to act in the tribe’s financial interests.
“It’s important that we settle the crimes that have been committed in the past. I think everyone in Indian country would like to move forward,” he said.
Related Topics:
Native American Issues,
Special Interest Groups,
Public Finance,
Domestic Policy,
Economic Policy,
Political Policy,
Politics,
Energy Technology,
Oil Production and Refining,
Science and Technology,
Technology
