Phoenix and threw fat copies of the Arizona Republic Sunday edition onto lawns and driveways. The front page was plastered with an explosive story that carried the headline “Fraud in Indian Country: A Billion-Dollar Betrayal.”
The story was the first in a series that the Arizona Republic would publish over the next week. The series consisted of thirty stories covering several full newspaper pages, and it focused mostly on rampant corruption and incompetence at a federal agency called the Bureau of Indian Affairs, or BIA.
The front-page story on that first Sunday said that federal Indian programs were “a shambles, plagued by fraud, incompetence, and deceit and strangled by a morass of red tape that has all but destroyed their effectiveness.” And that was just the first sentence.
While the central target of the stories was the federal government, the bulk of the first day’s investigation focused on US oil companies that drilled on Indian lands. A headline across the front of the Sunday paper declared that the federal system allowing oil companies to drill on Indian reservations was really nothing more than a “license to loot.”
The looting happened in a complicated and insidious way. The Arizona Republic story showed that the oil companies themselves were responsible for reporting how much oil they drilled on the Indian reservations: the companies would drill wells, pump the oil, and then report to the government how much oil they had taken out of the ground. The government was not effectively double-checking the companies’ reports to verify how much oil they were actually getting from the Indian reservations. The whole thing worked on an honor system, and the Arizona Republic alleged that firms were abusing it by consistently underreporting how much oil they pumped out of the ground. The stories said that oil companies were carting off at least millions of dollars in free oil every year.
The Arizona Republic series garnered the kind of attention, and outrage, that most reporters can only dream of. In particular, the series captured the attention of Arizona’s Democratic US senator, Dennis DeConcini. He told reporters that the series was “devastating.” The stories, he said, “indicate criminality as well as mismanagement.”
There was something about the allegations that seemed to particularly bother DeConcini. Crime and bureaucratic mismanagement were always offensive, but it seemed especially offensive when the victims were Native Americans. DeConcini sat on a Senate committee that oversaw affairs on Indian reservations. He was intimately familiar with the fact that Native Americans in his home state were among the most beleaguered people in America. On paper, America’s Indian tribes were considered sovereign nations. By the late 1980s, those nations were really nothing more than a giant, failed Socialist state. After being hounded and dislocated and, finally, penned into reservations, the tribes signed treaties that left them with land and natural resources. However, the land was held in trust by the United States and administered by the BIA, so that, in short, the treaties made the federal government a paternalistic overlord of the supposedly sovereign tribes. It seemed that every aspect of life on Indian reservations was governed by the BIA, from health care to housing, education to oil drilling.
By the late 1980s, the results of this arrangement were truly ruinous. About 45 percent of all Indians lived below the poverty line, the unemployment rate was above 50 percent, and fewer than half of Indian households had a telephone. Most of the people lucky enough to have a job earned about $7,000 a year. Town squares were boarded up, and business was booming at liquor stores; some of the villages resembled shantytowns. This squalor was all the more offensive because a tidal wave of taxpayer money washed up on the shores of Indian reservations every year. The federal government spent about $3.3 billion a year to support the BIA and Indian programs. Strangely, the entire Native American population managed to earn less than $3.3 billion a year even when government assistance from Indian programs was factored in. The federal bureaucracy was sucking up cash while managing to infuriate the very Indians it was supposedly helping.
The Arizona Republic alleged that oil companies were exploiting this toxic system. Some of the world’s biggest oil drillers operated on the wide belt of federal land and reservations stretching across Oklahoma, Texas, Arizona, and surrounding states. These firms were making a killing amid all the dysfunction and poverty, collecting a steady stream of crude oil and piping it out to US and world markets. Rumors of oil theft