The Pelt vs State of Utah lawsuit, alleging mismanagement of an oil royalty trust fund first created in 1937, has been brewing and simmering in the court system for decades. On January 4, federal judge William Canby helped broker a deal that resulted in the possible settlement of the matter.
The suit alleges that the mismanagement occurred over a long period of time before the State of Utah took over management of the trust fund in the 1990s. In more recent years, Utah abandoned its role as trustee. The new trustee has yet to be named and is the subject of legislation in the United States Congress.
After an estimated $4 or $5 million in attorney fees are paid for the nearly two decades of legal work, the remainder of the settlement will be added into the trust fund balance.
The lawsuit has class action status. None of the individual tribal members named in the lawsuit will receive payment. They acted as representatives of their respective chapters.
The Navajo Trust Fund was created in 1933 as a way to manage 37.5 percent royalties from oil and gas production within the area known as the Aneth Extension, approximately 52,000 acres of land north of the San Juan River.
That year, legislation mandated that those royalties be used for the education of Navajo children, building and maintenance of reservation roads, and other benefits of the Indians living on the reservation in San Juan County. Since 1933, the fund has been managed by the state of Utah.
Many local residents are relieved that the lawsuit may have a settlement. The controversy surrounding the use of the trust fund has caused simmering resentment for decades. Part of the delay may have been due to the wide disparity between the amount of money that the different parties say passed through the trust fund. Some parties aleged that the mismangement amounted to hundreds of millions of dollars, while others countered that the fund did not manage that amount of money.
At the current time, the trust fund generates roughly $5 million a year in oil royalties from the 14 operating oil wells in the Aneth extension. The estimated 360 additional oil wells on the Navajo Reservation in San Juan County send all of their oil royalties directly to the Navajo Nation.
Sentaor Bob Bennett is sponsoring legislation in the US Senate that would turn over management of the trust fund from the state of Utah to the Utah Dineh Corporation, a group that includes representation from all of the Navajo Chapters in San Juan County.
The Utah Dineh Corporation includes two board members from Aneth and Oljato and one each from the Teec Nos Pos, Mexican Water, Navajo Mountain and Blue Mountain Dineh chapters.
In addition to the Navajo Nation, which has signaled an interest in managing the trust fund, a additional group of area residents, primarily from the Aneth area, has indicated that it would like to manage the fund.
“For far too long the Utah Navajos have been poorly served by a paternalistic system that is often abused,” said Bennett. “This is a Utah issue and it requires a Utah-based solution. I trust that the San Juan County Navajos are capable of acting in the collective good, now and for the future generations of their people.”
Bennett said that if his bill is not passed by the end of the year, there will be no legal mechanism in place to distribute money to scholarship and housing programs established by the trust fund, harming students who rely on tuition money and low-income residents who depend on the fund for housing assistance.
A large meeting was held in Red Mesa on January 10 to celebrate and discuss the implications of the lawsuit settlement.