updated 6/20/2005 7:35:47 PM ET 2005-06-20T23:35:47

American Indians suing the Interior Department for more than a century’s worth of lost royalties said Monday they were willing to settle for $27.5 billion if Congress agreed not to draw the money from other Indian Country programs.

The class-action lawsuit has lingered in U.S. District Court here for nine years. During that time a federal judge has held both Interior Secretary Gale Norton and her predecessor, Bruce Babbitt, in contempt for failing to come up with an accounting of what the American Indians are owed.

A group of American Indian plaintiffs filed the suit in 1996 on behalf of 300,000, accusing the department of mismanaging oil, gas, grazing, timber and other royalties from American Indian lands dating back to 1887.

Elouise Cobell, the lead plaintiff in the case, said American Indian leaders have agreed on 50 “principles” for a settlement, including a calculation that the royalties plus compounded interest on them total $176 billion.

While American Indians have periodically received payments from the trust funds, it could take at least several years and require spending $12 billion to $14 billion to figure out exactly what they are still owed, according to the Interior Department.

Cobell said a $27.5 billion settlement would acknowledge that some accounts were paid and is realistic in light of the accounting issues involved. She wants the money paid into the government’s fund for paying judgments on legal claims.

“It is discounted quite substantially, but I think we all understand that there’s a lot of suffering in Indian Country,” she said. “Many people will die before the money is approved.”

Cobell and the other plaintiffs were responding to requests by Sens. John McCain, R-Ariz., and Byron Dorgan, D-N.D., respectively the chairman and senior Democrat on the Senate Indian Affairs Committee, for legislative guidelines at a March hearing. House Resources Chairman Richard Pombo, R-Calif., also might offer legislation, but only if he concludes the plaintiffs and Interior cannot resolve their differences, spokesman Brian Kennedy said.

Dan Dubray, an Interior Department spokesman, said the shift in strategy by the plaintiffs was perplexing. He said the department favors a settlement based on facts, not speculation in the absence of an accounting.

“They sued to achieve an accounting and the department has spent $100 million on an historical accounting,” he said. “Now they’re saying that’s not the goal. It’s an odd turn of events.”

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