583 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA ELOUISE PEPION COBELL, et . al. . . Plaintiffs, . Civil Action 96-1285 . v. . . Washington, D.C. DIRK KEMPTHORNE, Secretary . Thursday, June 12, 2008 of the Interior, et al. . 1:57 p.m. . Defendants. . . . . . . . . . . . . . . . TRANSCRIPT OF TRIAL - AFTERNOON SESSION BEFORE THE HONORABLE JAMES ROBERTSON UNITED STATES DISTRICT JUDGE APPEARANCES: For the Plaintiffs: DENNIS GINGOLD, ESQ. Law Offices of Dennis Gingold 607 14th Street, NW Ninth Floor Washington, D.C. 20005 202-824-1448 ELLIOTT H. LEVITAS, ESQ. WILLIAM E. DORRIS, ESQ. Kilpatrick Stockton, LLP 1100 Peachtree Street Suite 2800 Atlanta, Georgia 30309-4530 404-815-6450 KEITH HARPER, ESQ. JUSTIN GUILDER, ESQ. Kilpatrick Stockton, LLP 607 14th Street, NW Suite 900 Washington, D.C. 20005 202-585-0053 APPEARANCES con't. on next page. Jacqueline M. Sullivan, RPR Official Court Reporter 584 APPEARANCES, con't. DAVID C. SMITH, ESQ. DANIEL R. TAYLOR, JR., ESQ. Kilpatrick Stockton, LLP 1001 West Fourth Street Winston-Salem, North Carolina 27101 336-607-7392 For the Defendants: ROBERT E. KIRSCHMAN, JR., ESQ. JOHN WARSHAWSKY, ESQ. J. CHRISTOPHER KOHN, ESQ. U.S. Department of Justice 1100 L Street, NW Washington, D.C. 20005 202-307-0010 JOHN STEMPLEWICZ, ESQ. Senior Trial Attorney U.S. Department of Justice Commercial Litigation Branch Civil Division Ben Franklin Station P.O. Box 975 Washington, D.C. 20044 202-307-1104 Court Reporter: JACQUELINE M. SULLIVAN, RPR Official Court Reporter U.S. Courthouse, Room 6720 333 Constitution Avenue, NW Washington, D.C. 20001 202-354-3187 Proceedings reported by machine shorthand, transcript produced by computer-aided transcription. Jacqueline M. Sullivan, RPR Official Court Reporter 585 1 P R O C E E D I N G S 2 COURTROOM DEPUTY: Please come to order and remain 3 seated. 4 MR. QUINN: Good afternoon, your Honor. 5 THE COURT: Proceed. 6 MR. QUINN: Before we begin plaintiffs' cross of the 7 witness, defendants would like to move into evidence exhibits 8 used that relate to Ms. Herman's testimony today. That would 9 include Defendants' Exhibit 370. That's the internal funds and 10 flowchart. 11 THE COURT: Right. 12 MR. QUINN: 371, which is the table, the updated to 13 AR171, Defendants' Exhibit 342, which is the first binder set, 14 five total. We referred to one of those today in the middle of 15 her testimony, as well as the documents that Ms. Herman 16 discussed and testified to in terms of historical money flow 17 examples. That would be Defendants' Exhibits 474, 475, 477, 18 478, 479, 480, 481, Exhibit 485, Defendants' 486, Defendants' 19 491. There is the highlighted table of 371 indicating that 20 relative to reliance of materials used in table 171, the color 21 highlighted table, that's Defense Exhibit 492, and then summary 22 table, Defendants' 495, and the electronic era own accounts 23 analysis, Defendants' 496. Also we would like to move into 24 evidence the entire documents that are used in excerpted form 25 within Defendants' binder, Defendants' Exhibit 371, and I could Jacqueline M. Sullivan, RPR Official Court Reporter 586 1 identify those exhibit numbers for the Court. That would be 2 Defendants' Exhibit 80, 85, 96, 380, 381, 385, 386, 387, 88, 89, 3 90, 391, 395, 413, 423, 424, 425, 426, 427, 428, 429, 430, 431, 4 432, 433. That should cover the materials, entire historical 5 document Ms. Herman relied on in connection with the calculation 6 of Defendants' Exhibit 371, and we would ask the Court to admit 7 those into evidence at this time. 8 MR. DORRIS: Your Honor, may I be heard on that a 9 moment? 10 THE COURT: Yes. 11 MR. DORRIS: Many, if not most of those exhibits, we 12 don't even have yet. I've not had a chance to look at all of 13 the exhibits. I don't have expect to have objections to many of 14 the ones he mentioned. 15 THE COURT: Let's just take it under advisement, 16 consider the motion made. If you have a chance to determine 17 which ones you object to we'll deal with those objections. 18 MR. DORRIS: I can assure you I will by Monday 19 morning. 20 THE COURT: All right, sir. 21 MR. DORRIS: Thank you, your Honor. 22 MICHELLE HERMAN, WITNESS FOR THE PLAINTIFFS, PREVIOUSLY SWORN 23 BY MR. DORRIS: 24 Q. Good afternoon, Ms. Herman. 25 A. Good afternoon. Jacqueline M. Sullivan, RPR Official Court Reporter 587 1 Q. Since October of 2007 what percentage of your professional 2 time has been devoted to IIM trust issues that you testified 3 about today? 4 A. Probably roughly 98 percent. 5 Q. Okay. I'm not even going to ask about the other two 6 percent. How much of your time has been spent working on the 7 revisions to AR-171 including what we have in this notebook we 8 were given shortly before lunch? 9 A. I focused by efforts on that probably since the beginning 10 of this year. 11 Q. So from January through now, early -- well, it's not so 12 early anymore, June, you spent most of your professional time 13 working on revising AR-171? 14 A. I don't know exactly when early in this year, but the time 15 spent revising this has also, I'm also including our work on the 16 data completeness validation. 17 Q. The two go somewhat hand-in-hand? 18 A. They do. 19 Q. Okay. Let me tell you kind of where I'm headed and we kind 20 of will march through this. AR-171 and what has been developed 21 from it are kind of in a couple different periods, at least from 22 the sources you looked at, correct? 23 A. Yes, they are. 24 Q. And I want to start talking about the pre-1972 period and 25 then we'll move chronologically forward, okay? Jacqueline M. Sullivan, RPR Official Court Reporter 588 1 A. All right. 2 Q. Now, in pre-1972 when we look at both AR-171 and then the 3 new version, who provided that information to you? 4 A. The total collection number and the total disbursement 5 number was provided by NORC. The Osage numbers were determined 6 by our firm, and the tribal IIM estimate was provided by Morgan, 7 Angel & Associates. 8 Q. So for anything in the Osage column that is -- for the 9 entirety of that chart, that is something that you have 10 calculated? 11 A. That's correct. 12 Q. When you say your firm, was that you personally did those 13 Osage calculations? 14 A. Myself and individuals who work for me. 15 Q. And then with respect to the tribal IIM, you said Morgan 16 Angel, was it Mr. Angel that provided that to you? 17 A. Yes, Dr. Angel. 18 Q. And Dr. Angel provided to you the amount of money to put 19 down for tribal IIM? 20 A. Dr. Angel provided an estimate, the ten percent, and then 21 later fifteen percent numbers. 22 Q. Okay. So he said approximately ten percent of tribal -- of 23 the collections were tribal IIM for some period? 24 A. For the period 1934, I believe -- I'd have to look in the 25 binder -- through 1951. We utilized receipt data that Dr. Jacqueline M. Sullivan, RPR Official Court Reporter 589 1 Angel had gathered times his ten percent estimate. 2 Q. Would you look in your binder to confirm -- I want to make 3 sure we get this right as we move forward. 4 A. From 1934 through 1945 a ten percent estimate times a 5 receipt number from a historical document Dr. Angel had found 6 was utilized, and then from 1946 a fifteen percent number. 7 There is no data available for 1950 and '51. 8 Q. And where are you looking at this moment, where in the 9 binder? 10 A. At page -- I don't have the DX number, but it's A-1.1, one 11 of. 12 Q. So we're looking in Defendants' Exhibit 372, and you're now 13 looking under tab A-1.1? 14 A. That's correct. 15 Q. Okay. So yours do not have Bates stamps? 16 A. No, they do not. 17 Q. And what's the red handwriting on the bottom right of the 18 page you're looking at? 19 A. That's the page reference that I was referring to. 20 Q. Can you give that to me again? 21 A. Yes. It's A01.1, one of. 22 Q. Okay. That's going to be Bates page ten that we have? 23 MR. QUINN: We have a numbered copy if you want it. 24 It's the same thing, but it does have the numbering on it. 25 MR. DORRIS: Okay. Jacqueline M. Sullivan, RPR Official Court Reporter 590 1 BY MR. DORRIS: 2 Q. Mr. Quinn just gave me one with the Bates numbers. Which 3 would you prefer to work from? 4 A. If that has binder tabs, that's fine; if it doesn't, this 5 would likely be easier. 6 Q. It does have binder tabs. Would this be easier? 7 A. That's fine. 8 MR. DORRIS: Your Honor, may I approach the witness? 9 THE COURT: Yes, you may. 10 BY MR. DORRIS: 11 Q. So when I look at this page ten it shows the percentage of 12 receipts for tribal IIM at ten percent from 1934 through 1945, 13 correct? 14 A. That's correct. 15 Q. And now that's different than what occurred back in the 16 October version of AR-171, correct? 17 A. Fifteen percent was used from 1934 forward in the earlier 18 version. 19 Q. So he went back and found some historical support that said 20 no, it shouldn't be fifteen percent, it should be ten percent? 21 A. I don't know why Dr. Angel decided ten percent was more 22 appropriate for that time frame. My understanding is that this 23 was the early years after the Indian Reorganization Act and he 24 felt there would be fewer tribal IIM dollars. 25 Q. So in all fairness, this is something that Dr. Angel came Jacqueline M. Sullivan, RPR Official Court Reporter 591 1 up with and you've used what he provided to you? 2 A. That's correct. 3 Q. And then he told you to use fifteen percent from 1946 4 forward; is that correct? 5 A. That's correct. 6 Q. And at what point in time do you stop using fifteen 7 percent? 8 A. When the IRMS data becomes available in 1986. 9 Q. So from 1946 through 1984 you've used fifteen percent based 10 on what Dr. Angel provided to you? 11 A. Through 1985, yes. 12 Q. Okay. Now, I don't see anywhere -- this chart that I'm 13 looking at dies out in 1951. Is that the same chart you're 14 looking at? 15 A. That's correct. 16 Q. And then what have you put behind this chart? 17 A. These are the receipt reports that were utilized to 18 calculate the estimate. 19 Q. Okay. Are these documents that Dr. Angel provided to you? 20 A. Yes, they are. 21 Q. Okay. And so you've included these because he said this 22 was part of his calculation? 23 A. That's correct. 24 Q. Have you reviewed these documents and studied them in order 25 to be able to answer questions about them today? Jacqueline M. Sullivan, RPR Official Court Reporter 592 1 A. I have reviewed them. I haven't studied them. Dr. Angel 2 and I discussed the various report that he had located over 3 time. 4 Q. Would it be fair to say that in terms of whether what is in 5 this exhibit that we're looking at now under this Tab A-1.1, 6 that that's something that Dr. Angel will be better able to 7 answer what was done than you? 8 A. Yes. Dr. Angel and I discussed the reports themselves, but 9 he would be better to discuss the percentage utilized to 10 estimate the total number. 11 Q. Okay. So that's tribal IIM pre-1972 and a little bit past 12 '72. I take it there's no tribal IIM reflected in your chart 13 prior to 1934? 14 A. That's correct. 15 Q. And so while it shows tribal IIM for the period 1921 to 16 1951, it actually doesn't start until 1934? 17 A. That's correct. 18 Q. Now, the information in terms of total receipts and 19 disbursements, that came from Dr. Scheuren? 20 A. That's correct. 21 Q. And you told me I think before lunch there isn't anything 22 in this notebook that would show me how that was derived, is 23 there? 24 A. That's correct. 25 Q. Have you been provided that though from which you then took Jacqueline M. Sullivan, RPR Official Court Reporter 593 1 the numbers that you put here on your chart? 2 A. I was provided an e-mail that contained these numbers in 3 them. 4 Q. And where is that e-mail in this notebook? 5 A. I did not include the e-mail in the notebook. 6 Q. And the e-mail that you were sent just included two or 7 three numbers? 8 A. It included a collection number and a disbursement number 9 for each of the three periods. 10 Q. And you just took that from that e-mail and put it in your 11 chart without any further study or analysis or thought, correct? 12 A. It didn't appear in the first page of the chart because we 13 had to calculate the Osage number and the tribal IIM number, so 14 if you look on page -- it's 372, page eight. 15 Q. Okay. 16 A. The total column on the chart is always the sum going 17 across, so the values that were provided by NORC appear under 18 the estimated value titles, so you'll see they provided total 19 collection numbers and total business disbursement numbers. 20 Q. Okay. So they provided total collections and total 21 disbursements, and from that you had to take out what you 22 thought was Osage and come up then with the Other Receipts 23 column; is that correct? 24 A. The Osage was based on our calculations and then the 25 differential was other rights. Jacqueline M. Sullivan, RPR Official Court Reporter 594 1 Q. But it flows, the numbers flow from the numbers that you 2 were given by Dr. Sherod? 3 A. That's correct. 4 Q. Now, in terms of this, were you provided numbers for each 5 year during this period? 6 A. No. I was provided a number for each period. 7 Q. Who selected the periods? 8 A. Dr. Angel and Dr. Scheuren and I all discussed the periods. 9 Q. So you were involved in at least discussing the periods? 10 A. That's correct. 11 Q. Who made the decision as to what periods would be shown on 12 the chart? 13 A. I believe it was a mutual decision. 14 Q. Okay. Explain to me why these three periods were selected, 15 because other periods were used in the original version of 16 AR-171. 17 A. That's correct. The first period roughly approximates the 18 time frame that Treasury managed the accounts, the second period 19 approximates the time frame that the GAO managed the accounts, 20 and the third time frame is the remainder between when GAO 21 stopped managing the accounts and I had electronic data from the 22 GLGLDC system. 23 Q. When you say managed the accounts, what are you talking 24 about, what do you mean? 25 A. Excuse me. I should have said reviewed the accounts. Jacqueline M. Sullivan, RPR Official Court Reporter 595 1 Q. Okay. I mean, BIA was involved all along, correct? 2 A. That's my understanding, yes. 3 Q. And so when you were just saying manage the accounts, you 4 were talking about Treasury for a period reviewed the accounts, 5 GAO for a period reviewed the accounts, correct? 6 A. That's correct. 7 Q. And then for the third period, from 1952 to 1972, what is 8 that period? 9 A. From 1952 to 1971 is the remaining period before the 10 electronic data was available. 11 Q. When nobody was reviewing the accounts? 12 A. I believe there were internal audits performed by the BIA. 13 Q. Okay. But nobody outside of BIA to your knowledge were 14 reviewing the accounts? 15 A. Not of which I'm aware. 16 Q. Now, in terms of what you just said about who was 17 responsible for reviewing the accounts, is that something that 18 Dr. Angel told you or is that something that you discovered on 19 your own? 20 A. I searched through numerous packages of GAO settled account 21 records in the national archives many years ago. I did not 22 personally review Treasury records though. 23 Q. Okay. So you had some familiarity from some of your 24 earlier work, but was it Dr. Angel who told you when the 25 particular periods were? Jacqueline M. Sullivan, RPR Official Court Reporter 596 1 A. I've done a study of all of the packages available at the 2 national archives. I was more than aware of the period that GAO 3 studied the accounts. 4 Q. So that's something that you knew based on your own work? 5 A. That's correct. 6 Q. Now, we've talked today about the original AR-171 that we 7 looked at in October, and then we've looked at Defendants' 8 Exhibit 371, which is a chart that is June 4, 2008? 9 A. That's correct. 10 Q. Now, at some point were you given -- you prepared another 11 version of this sometime before June 4th, correct? 12 A. That's correct. I believe it was May 30th. 13 Q. And we were provided a chart on May 20th that you had 14 prepared, correct, or dated May 20th? 15 A. That's correct. 16 Q. And then within a few days it changed significantly in the 17 pre-1972 period, correct? 18 A. There was a change in the pre-'72 period, yes. 19 Q. You don't like that word "significantly," do you? 20 A. It's a judgment word. 21 Q. Okay. And you don't want to provide judgments like that? 22 A. Not on Dr. Scheuren's work, no. 23 Q. Okay. Fine. Now, I put together, I had our assistant copy 24 the top lines of AR-171, the first revision that we've been 25 provided, which was dated May 30, 2008, and then the third Jacqueline M. Sullivan, RPR Official Court Reporter 597 1 version, which is the June 4, 2008, and can you pull that up on 2 the screen? I'll tell you what we'll do. Let me ask you before 3 we look at this, were there any other revisions to AR-171 since 4 October that we've not been provided a copy with? 5 A. I'm sorry, since when? 6 Q. Since October of 2007 when AR-171, you testified about it? 7 A. That's correct. 8 Q. Have you made any other versions of AR-171, revisions to 9 it, other than the two that have been provided to us dated May 10 30 and June 4, 2008? 11 A. I had several drafts that we had been working on prior to 12 the revisions that were provided to you. 13 Q. Okay. So the others were just drafts? 14 A. That's correct. 15 Q. And then when we were provided with AR-171, which I called 16 here at R-1, revision one, of May 30, 2008, that was not a 17 draft, correct? 18 A. That was as of May 30th. 19 Q. Right. It was not a draft, though, it wasn't marked 20 "draft," was it? 21 A. No, it was not. 22 Q. That was what you thought at that time was the final 23 version? 24 A. That's correct. 25 Q. And how soon after May 30, 2008 did you find out you were Jacqueline M. Sullivan, RPR Official Court Reporter 598 1 going to have to change your chart again? 2 A. I believe it was June 4th. 3 Q. Okay. So you got new information a few days later? 4 A. That's correct. 5 Q. The information that you had gotten that you based the 6 first revision of May 20th, 2008, when had you gotten that 7 information from Dr. Scheuren? 8 A. I don't recall specifically what date. It was right around 9 May 20th, though. 10 Q. So I understand you don't recall precisely the date, but 11 approximately on May 20th Dr. Scheuren provided you some 12 information that you used in putting on your chart for the pre- 13 1972 information, correct? 14 A. That's correct. 15 Q. And then about five days later, six days later, he provided 16 other information that caused you to revise your chart? 17 A. That's correct. 18 Q. Now, let's look, if we might, can you -- I don't know if 19 you can blow up kind of the middle there of receipts and 20 disbursements. Can you see that any better? 21 A. The middle section is kind of blurry. 22 Q. Okay. Well, I'll tell you what. It was for me too. I had 23 another chart prepared, but we can come back to this if you want 24 to look at any of the figures. 25 Can you pull up the chart that you based this on? And Jacqueline M. Sullivan, RPR Official Court Reporter 599 1 can you blow that up for us? 2 Now, this is the information that I will tell you that 3 I had taken from those three versions of AR-171 that are 4 identified there. And you will have a copy. I'll provide a 5 copy too. 6 We'll have this marked as Plaintiffs' Exhibit 117. 7 (Plaintiffs' Exhibit No. 117 was marked for 8 identification at about 2:37 p.m.) 9 BY MR. DORRIS: 10 Q. And let me represent to you we tried to faithfully take the 11 information and the math. I'm sure that you'll have to chance 12 to check it later to see if we took anything down wrong, but if 13 you could, it is clear, I want you to look with me that in the 14 Total column from that AR-171 to the first revision of AR-117 on 15 May 30, 2008. The amount of total collections or revenues went 16 up by about $105 million. Do you see that? 17 A. I do. 18 Q. And in all fairness, there were a few more years at the 19 beginning included in that period now where it was a time frame 20 from 1887 through 1908, correct? 21 A. That's correct. 22 Q. And then from what Dr. Scheuren gave you on May 30, 2008 to 23 what he gave you six days later, it looks like about $565 24 million fell out of the revenue totals, correct? 25 A. That's what it appears, yes. Jacqueline M. Sullivan, RPR Official Court Reporter 600 1 Q. All right. And that's consistent with what you remember 2 when you looked at it? 3 A. Yes, it is. 4 Q. All right. So the other information that when he provided 5 that to you, did that cause you to have to change some of the 6 other columns that you had already prepared? 7 A. The Other Receipts column and the Tribal IIM column. 8 Q. The Osage stayed the same between the May 30 and the June 4 9 version? 10 A. That's correct. 11 Q. And I noticed that the tribal IIM stayed the same for the 12 period of 1921 to 1951? 13 A. That's correct. 14 Q. And is that something that -- how do you know whether that 15 stayed the same or it changed? 16 A. As we discussed, when we were looking at the receipt 17 reports, we had utilized the historical receipt reports that Dr. 18 Angel had gathered because NORF had provided an estimate for the 19 entire time frame and we were only applying tribal IIM to the 20 subset of that time frame. 21 Q. I got lost. Let's go a little bit slower on that. I 22 remember the tribal IIM starts in 1934. 23 A. That's correct. 24 Q. So when you were given the number by Dr. Scheuren on May 25 30, 2008, you knew what the total collections were for 1921 to Jacqueline M. Sullivan, RPR Official Court Reporter 601 1 1951, correct? 2 A. That's correct. 3 Q. You had to know what the collections were between 1934 and 4 1951 in order to determine what the tribal IIM was? 5 A. That's correct. 6 Q. And is there something -- is the chart that we were looking 7 at in tribal IIM earlier, does that show what it was year by 8 year? 9 A. Dr. Scheuren didn't provide an annual estimate so we had to 10 utilize the historical receipt reports that Dr. Angel had 11 gathered, which have been provided to you. 12 Q. Those are the ones that we just looked at in A-1.1? 13 A. That's correct. 14 Q. So that was a total collection number from Dr. Scheuren for 15 the period, but you didn't have a breakout for year by year, 16 correct? 17 A. That's correct. 18 Q. And you didn't have a breakout from 1934 to 1951, correct? 19 A. That's correct. 20 Q. And so when I look at the Bates page, Defense Exhibit 372, 21 page ten, does that somehow show the $38.2 million figure 22 somewhere? 23 A. I'm sorry. I don't understand the question. 24 Q. Okay. When I look at tribal IIM from 1921 to 1951 on the 25 last two versions of AR-171, the May 30 and the June 4, 2008, I Jacqueline M. Sullivan, RPR Official Court Reporter 602 1 see that it's $38.2 million between '21 and '51? 2 A. That's correct. 3 Q. And is that somehow on this chart? 4 A. Yes, it is. On page ten. 5 Q. Okay. And where does it show it on this chart? 6 A. It's the summary number at the bottom of the chart. 7 Q. Okay. So it's the 38 and it's 150 here, so you use 38.2 on 8 the chart? 9 A. The spreadsheet rounds it. It's a display issue. 10 Q. Okay. So now is this the receipts that are used to 11 calculate this? Are those the same receipts then that Dr. 12 Scheuren used to calculate the amount between 1934 and 1951? 13 A. These reports were provided to Dr. Scheuren. I don't know 14 how his model incorporated them. 15 Q. So you've based tribal IIM on one set of data, and you 16 don't know if that's consistent with the same data that Dr. 17 Scheuren used. 18 A. It's my understanding that Dr. Scheuren relied on these 19 reports. I don't believe that this is the sum total of his 20 analysis, though. 21 Q. Are these the same receipts that you understand that he 22 used in his report? 23 A. These are the receipts that he used in his model. I don't 24 know if these -- how these impacted his model. 25 Q. So you don't know if these receipts, once put in the model, Jacqueline M. Sullivan, RPR Official Court Reporter 603 1 came out as being more or less than what is shown here? 2 A. I can't tell you that, no. 3 Q. Okay. Thank you. 4 Now, has it been explained to you why over $550 5 million disappeared in that week between May 30 and June 4? 6 A. No. I'm sorry. You'd have to ask Dr. Scheuren. 7 Q. Now, let me be real clear on this question. Have you ever 8 seen the backup for any of Dr. Scheuren's calculations? 9 A. To the extent that he relied upon our data and data that 10 Moore & Angel provided to us as well, then I have. In terms his 11 calculations, I have not. 12 Q. Thank you. 13 Have you ever seen anything from Dr. Scheuren that 14 provided revenue and disbursement numbers on a year-by-year 15 basis? 16 A. No, not on an annual basis. 17 Q. Just based on these periods? 18 A. That's correct. 19 Q. So let's try to be real clear on this. In terms of when 20 you talk about there's been a total revenue through the IIM 21 system for everything before 1972, you're basing what you say on 22 numbers that Dr. Scheuren has provided, correct? 23 A. In terms of the collections and disbursements in totality, 24 yes. In terms of the Osage numbers, those were our 25 computations. Jacqueline M. Sullivan, RPR Official Court Reporter 604 1 Q. And those are what you view as pieces of the collections, 2 collect? 3 A. That's correct. 4 Q. So really it's Dr. Scheuren's information or analysis that 5 you based your total number on, correct? 6 A. The total number, yes. 7 Q. Now, let's talk some about the next period, the period from 8 I guess that would be 1972 to when? 9 A. To 1985. 10 Q. And what is that, what would you call that period? 11 A. Basically we were starting with the finance system data, 12 the general ledger data. 13 Q. Was that electronic data? 14 A. The finance system, some information from that was manually 15 reentered. It was an electronic system but we don't have that 16 completely available to us today. 17 Q. Okay. What specific information did you use to come up 18 with the numbers that then appear on your chart for the period 19 of 1972 to 1985? 20 A. So if you switch to page 28. 21 Q. So this is in Defendants' Exhibit 372, page 28? 22 A. That's correct. 23 Q. Okay. And as we begin, I begin to ask you some questions 24 about this document, let me ask this: It refers in a number of 25 places to the GLDL. Is that the general ledger, detailed Jacqueline M. Sullivan, RPR Official Court Reporter 605 1 ledger? 2 A. That's correct. 3 Q. Those two different ledgers? 4 A. I'm sorry. That's the way the system was referred to, or 5 as the finance system. 6 Q. You don't know if that's two different ledgers? 7 A. I'm sorry. That's the way the system itself was referred 8 to, as the name utilized. 9 Q. Okay. And have you worked extensively with that system? 10 A. No, I have not. 11 Q. In fact, your work with it has been very limited, correct? 12 A. It has been limited, yes. 13 Q. Would it be fair to say you've not worked with that system 14 at all? 15 A. No, that would not be fair. 16 Q. It would be limited, but some? 17 A. That's correct. 18 Q. All right. Now, the information that is on this chart, is 19 this all something that you prepared? 20 A. The initial data from the GLDL system was provided to us by 21 Clifton Gunnerson, another firm employed by Otaugh. 22 Q. Were they named something else before that? 23 A. That's correct. 24 Q. And what was their name? 25 A. Sheveria, Dunne and Lamey (ph). Jacqueline M. Sullivan, RPR Official Court Reporter 606 1 Q. Now, but who prepared this document we're looking at right 2 now? 3 A. Our firm did. 4 Q. Because up in the upper left it says Department of 5 Interior, Office of Historical Trust Accounting, but it was 6 actually prepared by FDI? 7 A. That's correct. 8 Q. And so a lot of times where we see the document that says 9 Department of Interior, Office of Historical Trust Accounting, 10 that's something that FDI actually prepared? 11 A. In this binder, yes. 12 Q. Now, when we look at this would it be fair to say that what 13 you did here is largely, if not totally, based on a spreadsheet 14 that you were provided by Sheveria, Dunne and Lamey? 15 A. In terms of the total collection numbers, yes, and excuse 16 me, the disbursement numbers. 17 Q. What about the collection numbers? 18 A. I believe that's what I just said, the total collection 19 numbers and the total disbursement numbers. Both. 20 Q. That's correct? 21 A. All right. I misunderstood. 22 Q. I apologize. 23 Now, that spreadsheet then also appears in your 24 notebook? 25 A. Yes, it does. Jacqueline M. Sullivan, RPR Official Court Reporter 607 1 Q. I saw it over the lunch hour. Can you tell us where that 2 is? 3 A. I believe that's something within the notebook. GLDLR 4 referring to receipts, GLGLD referring to disbursements, and 5 GLDLB, referring to balances. 6 Q. Well, let's go to GLDLD first, GLDLD, and we have Bates 7 pages legal-size sheet -- are you with me, your Honor? 8 THE COURT: Yes. 9 BY MR. DORRIS: 10 Q. It's a legal-size sheet that starts at Bates page 120 and 11 goes to Bates page 121. Am I correct on that? 12 A. That's correct. 13 Q. So it's two legal sheets for the disbursements? 14 A. That's correct. 15 Q. Now, is this a document that you prepared? 16 A. Yes. This is the summary of the information provided to us 17 by Clifton Gunnerson. 18 Q. Looking on the second page, which is Bates page 21 of 19 Defendants' Exhibit 372, I see the source is Sheveria down in 20 the bottom. It says Sheveria, Dunne and Lamey, Microsoft access 21 2000 database, and it goes on with some other language there. 22 Do you see that? 23 A. Yes, I do. 24 Q. So what were you provided? 25 A. They provided us some Microsoft access database containing Jacqueline M. Sullivan, RPR Official Court Reporter 608 1 this information, and I wrote what's referred to as a cross-tab 2 query to summarize it. 3 Q. You're going to have to explain that to me, what that 4 means. 5 A. Basically it puts things into columns and rows instead of 6 individual line items. 7 Q. Okay. So you were given an electronic database and you 8 didn't change anything in that database but you got it organized 9 the way you wanted it? 10 A. That's correct. 11 Q. Good. What did you do to study, verify, check, anything 12 about that database? 13 A. I had conversations with the individuals from Clifton 14 Gunnerson how about they compiled the information. 15 Q. Other than those conversations, did you do anything else to 16 study, analyze, or verify that database? 17 A. No, I did not. 18 Q. How long did those conversations last? 19 A. I probably had three or four conversations of approximately 20 thirty minutes to an hour apiece. 21 Q. So three or four hours of conversations with those people, 22 and you've used that information now for what is that, a 23 fourteen- or fifteen-year period? 24 A. The total collections and disbursements from that period, 25 yes. Jacqueline M. Sullivan, RPR Official Court Reporter 609 1 Q. Okay. Now, after you printed it off in this form, because 2 it didn't come printed off to you in this form, right? 3 A. That's correct. 4 Q. Did you sit down and look over the column sum to see if 5 there were some anomalies? 6 A. Yes, I did. 7 Q. Okay. And you found a number of anomalies, didn't you? 8 A. I found gaps in the information, yes. 9 Q. Okay, all right. And did you fill those gaps in? 10 A. No, I did not. 11 Q. Okay. And when you talked to the people from Sheveria, 12 Dunne and Lamey, now Clifton Gunnerson, they acknowledged that 13 there were gaps in the information they had been provided, 14 correct? 15 A. Actually, what the individuals explained to me was in many 16 years the information was recorded at the area office level 17 instead of the agency level, which would explain some of the 18 gaps, and that in some other instances one region was processing 19 information for another region, so while there appeared to be 20 many gaps there aren't as many in essence as it appears. 21 Q. Let me ask that question again. Even if the people from 22 Sheveria, Dunne and Lamey acknowledged to you that there were 23 gaps in the data, correct? 24 A. That there were some gaps, yes. 25 Q. And I notice that when I look at this sheet there are times Jacqueline M. Sullivan, RPR Official Court Reporter 610 1 that there's nothing there and there's a dash line and there are 2 times that there's nothing there and it's just left blank? 3 A. The dash line indicates a zero. 4 Q. And the blank line indicates a zero also? 5 A. No. The blank line indicates no data. 6 Q. All right. So the dash line means there was data but it 7 just adds up to zero? 8 A. That's correct. 9 Q. Okay. So for some things there was data about 10 disbursements but that data all added up to zero? 11 A. In one particular instance that I reviewed it was a posting 12 in a reversal. 13 Q. Now, let me just ask you to look. We have, I think it's 14 the same spreadsheet, was actually an administrative record last 15 time, correct? 16 A. I don't recall, but I believe so. 17 Q. Okay. Can you pull that up? This would be from AR-176. I 18 think it's page ninety in the earlier. And can you focus on the 19 first three columns there for us? Ms. Herman, this I think is 20 the same spreadsheet. We can look at it some more. In fact, 21 can you go just a little bit to the left here so you'll see the 22 same GLDLD-1? Do you see that's the same sheet? 23 A. It's not the same sheet from this notebook, but it appears 24 to have the same data. 25 Q. Okay. Well, we can look back and forth. I'm just trying Jacqueline M. Sullivan, RPR Official Court Reporter 611 1 to do something so we can move a little more quickly. I want 2 you to concentrate on the red things that I have or I've 3 highlighted in red there and you're going to tell me. 4 Antonio, you're going to have to help me here. Can 5 you blow up the top red bottom red one or the top red one at 6 all? 7 Okay. You see in the top red one for a ten that would 8 be an agency, correct? 9 A. Yes, Standing Rock. 10 Q. And it shows a disbursement total that year of over 11 a-million-eight, correct? 12 A. Excuse me. 1.8 million, yes. 13 Q. Okay. 1.8 million. 14 And if you would go down that column, Antonio, and you 15 see then a disbursement -- let's see. That was a ten. Let's 16 look at a disbursement at the bottom of the page that's in red, 17 which is 7.6 million rounding up, correct, for 862? Do you see 18 that? 19 A. I see the number but I can't see the year that it's 20 referring to. 21 Q. Okay. It's in the column 1973? 22 A. Okay. 23 Q. Are you with me? 24 A. Yes, I am. 25 Q. Let's look at one more on the next page, please. And it's Jacqueline M. Sullivan, RPR Official Court Reporter 612 1 P-12 in 1973, and it shows disbursements of -- can you read that 2 number? 3 A. No, I'm sorry, I cannot. 4 Q. A little larger. 5 THE COURT: 3.6 million. 6 MR. DORRIS: I'm sorry, your Honor. 7 THE COURT: It says 3.6 million. I'm looking at the 8 hard copy. 9 MR. DORRIS: Thank you. 3.6 million. 10 BY MR. DORRIS: 11 Q. Now, when I look back then in your notebook at the revenue 12 side for this same period, if you'll look in 1973 at A-10, 13 you'll see that that shows no revenue? 14 A. I'm sorry, sir. Where are you now? 15 Q. I am on Bates page 116. 16 A. Thank you. 17 Q. Okay. A-10 in 1973 shows no revenue, correct? 18 A. That's correct. 19 Q. And A-62, which then is on the next page in 1973 shows no 20 revenue, and P-12 in 1973 shows no revenue. Do you see that? 21 A. I do. 22 Q. And so we end up then with just looking at that one year, 23 three instances where it shows disbursements going out from an 24 agency and no revenues coming in to that agency, correct? 25 A. That's correct, but you don't know that those revenue Jacqueline M. Sullivan, RPR Official Court Reporter 613 1 numbers weren't ordered at the area office, for instance, 2 looking at this chart. 3 Q. You just don't know, do you? 4 A. You can't make the assumption that there was no revenues 5 for that agency. It could have been recorded at the regional 6 level. 7 Q. And it might have just been missed altogether, correct? 8 A. I'm sorry, I don't understand the question. 9 Q. In other words, you don't know if this was an instance of 10 underreporting revenue or not, do you? 11 A. Not looking at these two schedules, no, I do not. 12 Q. And you made no further investigation of these schedules to 13 determine that, did you? 14 A. We looked at other investment reports, for instance, that 15 were available during this time frame, and in terms of the 16 balance data it was very consistent with the information that 17 had been located from the GLDL. 18 Q. But with respect to the specific issues we're looking at 19 here, you did not investigate those specific issues? 20 A. No, I don't believe I did. 21 Q. Look back then under GLDLB, which is the balance, and this 22 is on Bates page 123. Do you see for 1972 and 1973 that agency 23 A-10 was shown as having balances there? 24 A. Yes, I do. 25 Q. So at least at the agency level they were tracking balances Jacqueline M. Sullivan, RPR Official Court Reporter 614 1 and they were tracking disbursements, correct? 2 A. Yes, but it's very common to record receipts at the area 3 office level. 4 Q. And okay. And you think that's -- 5 THE COURT: How is the area office level shown on this 6 spreadsheet? 7 THE WITNESS: For this particular agency, your Honor, 8 it would be a 300. It varies by the agency that you're 9 discussing. Typically it ends in 300 or 50. 10 THE COURT: Are you telling me that for 1973 the area 11 office might have recorded revenues of 6.7 million? 12 THE WITNESS: That the revenues recorded at the area 13 office could pertain to any one of the agencies within that 14 area. 15 THE COURT: I'll wait to be enlightened. 16 BY MR. DORRIS: 17 Q. Well, let's look at this one, Miss Herman. We're on the 18 revenue sheet, okay? 19 A. Okay. 20 Q. Page 116 of Exhibit 342. 21 A. Yes. 22 Q. Look at agency A-7. Do you see it? 23 A. Yes, I do. 24 Q. So in '72 it collected 2.6 million and the area office 25 collected 7.9? Jacqueline M. Sullivan, RPR Official Court Reporter 615 1 A. That's correct. 2 Q. Those are two different revenue numbers, correct? 3 A. Yes, they are. 4 Q. And in the 1973 agency A-07 collected nothing, or at least 5 on this sheet, an area office then collected 6.6. Do you see 6 that? 7 A. I do. 8 Q. So it went down. The area office went down, correct? 9 A. Yes, it did. 10 Q. And then the next year A07 shows it collects 2.8 million 11 and the area office collects seven. Do you see that? 12 A. Yes, I do. 13 Q. So do you think that for A-07, that whatever it was 14 collected there in 1973 is somehow in the area office number? 15 A. I can't make that assessment looking at this sheet. 16 Q. Okay. So there are a number of anomalies like that that 17 you see here where it shows disbursement at times where there's 18 no revenue and it raises questions of the accuracy of this 19 information, correct? 20 A. It raises questions as to whether or not it's complete. I 21 don't think it raises questions as to the accuracy. 22 Q. What is here you think is accurate in terms of what was 23 recorded in the system, but whether everything got recorded in 24 the system you don't know? 25 A. I remember placing this from hard copy records. Jacqueline M. Sullivan, RPR Official Court Reporter 616 1 Q. So this hasn't informed the electronic information that was 2 being run at the time? 3 A. This was data entered from hard copy records of the 4 electronic system. 5 Q. So Sheveria, Dunne and Lamey had hard copies that they then 6 entered into a database? 7 A. That's correct. 8 Q. And do you know whether or not you ever checked to see if 9 they had all the hard copies that were available, did you? 10 A. They represented that they had complete hard copies for 11 some of the periods and they were missing several reports. 12 Q. So there you know that you're missing some reports, 13 correct? 14 A. That's correct. 15 Q. All right. Now, let's look for a minute when we look down 16 the chart here -- when did they prepare this database? 17 A. I don't recall. I'm sorry. 18 Q. You don't remember what year? 19 A. I'm sorry, I don't. 20 Q. Okay. All right. When I look at this revenue I counted up 21 88 agencies or area offices. There were 44 on each sheet. I'm 22 not going to ask you to count them. 23 A. Thank you. 24 Q. But when we look down this first column in 1972, you see 25 there is a lot more missing or blanks, correct? Jacqueline M. Sullivan, RPR Official Court Reporter 617 1 A. I'm sorry. Relative to what? 2 Q. When you look down for 1972 there are a number of agencies 3 and area offices where there's no -- or area offices where 4 there's no information, correct? 5 A. That's correct. 6 Q. And there are actually 26 agencies there in that column 7 with information, and the total on page 118 is 132.5 million. 8 Do you see that? 9 A. I see the total, yes. 10 Q. When I look in 1978 about halfway through the chart and 11 counted there were 49 agencies with numbers there with a total 12 revenue of 419 million. Do you see that? 13 A. Yes, I do. 14 Q. And then when I looked over at 1982 there were 57 agencies 15 or area offices reporting with revenues over $600 million. Do 16 you see that? 17 A. I'm sorry, I've lost you. I apologize. 18 Q. Yes. In 1982 there are even more agencies and area offices 19 reporting and the revenues go over $600 million, correct? 20 A. That's correct. 21 Q. Does it appear to you looking at this chart then that there 22 is an underreporting of revenues and collections during this 23 period? 24 A. I don't know if these increases and decreases in 25 collections have to do with changes in, for instance, oil prices Jacqueline M. Sullivan, RPR Official Court Reporter 618 1 or leasing or anything else of that nature. 2 Q. Or whether it may be related to the fact that the -- they 3 could not find reports for certain periods, correct? 4 A. That's correct. 5 Q. Now, look back at the disbursement summary. 6 A. I'm sorry, at which page? 7 Q. Page 120. 8 A. Yes. 9 Q. Before I ask you this, before we start looking, let me ask 10 you this question: If you saw for a particular agency the exact 11 same dollar amount in two consecutive years, would that raise a 12 red flag to you? 13 A. Potentially. 14 Q. Did you look at you this chart to see if it happened? 15 A. I believe it did in some years. 16 Q. In how many years? 17 A. I don't recall. 18 Q. Okay. Well, let's look at couple. Look under 1972 and 19 1973 at area office D-00. Is that Anadarko? 20 A. Yes, it is. 21 Q. And you got the exact same dollar figure there, correct? 22 A. That's correct. 23 Q. From '72 to 73, so that's a red flag for you. Potentially 24 it's my understanding that in some instances Sheveria, Dunne and 25 Lamey had to use reports from earlier years. Can you explain to Jacqueline M. Sullivan, RPR Official Court Reporter 619 1 me, please? 2 A. I'm sorry? 3 Q. I don't understand what you've just told me. 4 A. I'm sorry. 5 Q. Maybe repeat what you said. 6 A. I'm sorry. I probably didn't explain myself very 7 effectively. 8 Q. You may have explained yourself beautifully. I just didn't 9 understand it. Now, are you saying that, for example, in 1972 10 they didn't have information so they used information from 1973? 11 A. I believe I misspoke. I apologize. 12 Q. What did Sheveria, Dunne and Lamey tell you about this when 13 you asked them about it? Did you ask them about it? 14 A. I don't know if I asked them about this particular year or 15 not. As I mentioned, we had several conversations. 16 Q. Did Sheveria, Dunne and Lamey ever tell you they didn't 17 have reports so they used earlier-year reports? 18 A. I don't recall. I'm sorry. I believe that they did have 19 to use some earlier reports for a particular month after a 20 particular year but I don't recall. I'm sorry. 21 Q. Okay. Is this one of those situations where you don't have 22 a precise recollection but you kind of remember them telling you 23 something to that effect? 24 A. I would have to look at my notes. 25 Q. You have notes of those conversations? Jacqueline M. Sullivan, RPR Official Court Reporter 620 1 A. No. I believe I have notes where they indicated that they 2 didn't have data for a particular year. 3 Q. And where are those notes? 4 A. I believe that they're in my office. 5 Q. And that's out in California? 6 A. Yes, it is. 7 Q. Let's look, for example, under 1974 and 1975. The C stands 8 for what region? 9 A. Billings. 10 Q. Billings? Do you look all the way for the Billings region, 11 that would be C50 through C59, and then what's the E range on? 12 A. Alaska. 13 Q. Where? 14 A. Alaska. 15 Q. Alaska. Do you see for those two years, everything for 16 those two regions and agencies are precisely the same? 17 A. Yes, I do. 18 Q. That's a lot of red flags there, correct? 19 A. It's a potential that these reports were more used from the 20 same year, yes. 21 Q. Could it be that somehow they did some averaging there, or 22 do you know? 23 A. That's not my understanding, no. 24 Q. Okay. Let's look over in 1983 and 1984. And this may be a 25 little more difficult, but down five, you see the $3.198 million Jacqueline M. Sullivan, RPR Official Court Reporter 621 1 number twice for that would be A-10? 2 A. I'm sorry, what year, sir? 3 Q. For agency A-10, 1983 and 1984, do you see the same thing? 4 A. Yes, I do. 5 Q. Look down at the bottom of those same two columns for '83 6 and '84. Do you see the bottom through three numbers are all 7 the same for 462, 42, 46? 8 A. Yes, I do. 9 Q. Would it surprise you if I told you that when you go 10 through and total all the disbursements that are exactly the 11 same from year to year that it's over $580 million? 12 A. I would have to perform that calculation to tell you that. 13 Q. Okay. Look at the next page, page 21. What's the F 14 region? 15 A. Portland. 16 Q. And look under 1974 and '75 for the Portland region. 17 A. Yes, I do. 18 Q. So were reports just missing for one of those years so they 19 used the same figures from one year to the next? 20 A. I would have to check. 21 Q. Did you ask them about each one of these things, or had you 22 discovered those before we pointed them out to you here in court 23 today? 24 A. I don't believe I asked them about each of these instances 25 that we discussed. I did notice that there were some numbers Jacqueline M. Sullivan, RPR Official Court Reporter 622 1 that were the same. 2 Q. Now, the information then that was used here was for the 3 period of 1972 through 1985? 4 A. That's correct. 5 Q. Was incomplete, correct? 6 A. Potentially, yes. 7 Q. Oh, you were told it was incomplete, correct? 8 A. It appears that it may be incomplete, yes. 9 Q. And at times things were significantly a red flag to you 10 that you would question the accuracy of some of the information 11 on this chart, correct? 12 A. I believe I said that it seemed inconsistent that the 13 numbers were the same. 14 Q. So does that mean you do question the accuracy of some of 15 the information on this chart? 16 A. It appears that it's an estimate. 17 Q. Okay. Before you just said that there was nothing that was 18 indicated about this period being an estimate, was it? 19 A. That's correct. 20 Q. So now we know that pre-1972 is all estimated, correct? 21 A. No. The Osage numbers were calculated by us. 22 Q. Were estimated by you, correct? 23 A. We had data points for many of the years prior to 1972. 24 Q. Okay. So you had some information but not complete. We'll 25 come back to that. Jacqueline M. Sullivan, RPR Official Court Reporter 623 1 But for the total collections and disbursements pre- 2 '72, those were estimated, correct? 3 A. That's correct. 4 Q. For the period now from 1972 to 1985, you would say 5 properly to characterize it as an estimate also, correct? 6 A. Some of the numbers have been estimated. 7 Q. And exactly which have been estimated and which haven't you 8 can't tell us sitting here today? 9 A. Not as I sit here today. 10 Q. Do you have data that would permit you to tell us what was 11 estimated and what was not estimated during that period? 12 A. I would have to talk to Caren Dunne from Sheveria, Dunne 13 and Lamey. 14 Q. Did you ever talk, have conversations? 15 A. Yes. 16 Q. Did you ever talk with Greg Sheveria about this? 17 A. I don't believe so. 18 Q. All of your conversations with Sheveria, Dunne and Lamey 19 were with Caren Dunne? 20 A. I believe so. 21 Q. Now, let me ask you one other question on this area, this 22 period, the estimated period from '72 to '85. When I look at 23 the revenue numbers, look at sheet 118, Bates page 118. 24 A. Can you tell me what tab that's in, sir? 25 Q. That's under GLDLR for the receipts. Jacqueline M. Sullivan, RPR Official Court Reporter 624 1 When I look across the totals here at the bottom for 2 this period, is that the total receipts that you used? 3 A. I don't. We reduced this number by beginning balances. 4 Q. Okay. Let's look then at the Defendants' Exhibit 371. 5 Were you passed up a copy of that? 6 A. No, I was not. 7 Q. Okay. Do you have that? 8 A. Yes. 9 Q. You do? 10 A. Yes. 11 Q. Can you pull that up on the first page and look under Total 12 Column G for 1972 through 1985? 13 MR. DORRIS: Your Honor, Mr. Quinn has handed me a 14 hard copy that might benefit the witness to have. I think one 15 was handed up to the Court earlier this morning. 16 THE COURT: All right. 17 THE WITNESS: Thank you. 18 BY MR. DORRIS: 19 Q. Okay. As I'm looking at 1972 all the way through 1983, it 20 appears to me to track dollar for dollar what the totals are. 21 A. I'm sorry, I don't believe I understand your question. 22 Q. Okay. I'm looking at page 118 in Defendants' Exhibit 372. 23 A. Correct. 24 Q. Okay. And now I'm looking at the Total column that you 25 have here on Defendants' Exhibit 371. Jacqueline M. Sullivan, RPR Official Court Reporter 625 1 A. We only made adjustments in three of the years. I believe 2 that's what you're referring to. 3 Q. When you say you made beginning balances, what do you mean? 4 A. Within the IRMS system it was posed a new receipt, a new 5 collection, and those funds represent the net amount of activity 6 that has happened prior. 7 Q. Now you're talking about the IRMS system. I'm totally 8 confused. 9 A. It records the summary level information from the GLDL 10 system. 11 Q. How many years do you have summary-level information for 12 the GLDL years? 13 A. We're just using the paper time frame of the IRMS system, 14 which is why these adjustments appear on this report and not on 15 the AR-171. 16 Q. Okay, I'm lost. The IRMS system that you haven't had time, 17 you had information beginning in February of 1985 and you are 18 now going back and taking hard paper copies of receipts that 19 were run from the IIM system prior to that time and keying them 20 back in? 21 A. Yes. Primarily transaction registers. 22 Q. You're doing that and now you're making some adjustments to 23 some of the calculations on Sheveria Dunne's records? 24 A. Yes. 25 Q. The number on your final chart of June 4 is 426.6 million, Jacqueline M. Sullivan, RPR Official Court Reporter 626 1 and Sheveria, Dunne and Lamey's spreadsheets shows 445.8 2 million, correct? 3 A. That's correct. You can turn to page 28 and you can see 4 the adjustments that were made. 5 Q. It's just going to show me that approximate $20 million 6 adjustment was correct? 7 A. For beginning balance transaction, yes. 8 Q. But you've not looked for any others to see whether similar 9 adjustments would be appropriate? 10 A. Because we have not rekeyed that data in its entirety. 11 Q. Does rekeying any of that data permit you to look at any of 12 the disbursement data to see if any of it was stated too high? 13 A. This is a unique issue getting beginning balances posting. 14 Beginning balances post as cash, as new money to the system. 15 You don't have the same issue with disbursements. 16 Q. Okay. Now let's talk about the period of from 1985 forward 17 for a few minutes. That is the IRMS time frame, correct? 18 A. IRMS and TFAS. 19 Q. And TFAS. And that is information that you are more 20 familiar with than you were with these earlier periods, is that 21 fair? 22 A. That's what I spent the majority of my time studying, yes. 23 Q. Since 1997? 24 A. That's correct. 25 Q. There were substantial changes between AR-171 that you Jacqueline M. Sullivan, RPR Official Court Reporter 627 1 testified to in October in the numbers during that period and 2 what you are showing on your present chart, correct? 3 A. There were some changes, yes. 4 Q. Okay. Now, are those changes detailed in this notebook 5 somewhere? 6 A. The total numbers that we have reflected in this notebook. 7 I can't show you all 115 million transactions. 8 Q. I'm not sure you'd be permitted to. But I don't want to 9 see all 115 million transactions, but let me ask you, let me ask 10 you the question this way. I understood your data completeness 11 validation, that part of that was you were going to look at what 12 was admittedly an incomplete database that you had been given to 13 try to fill in or restore some of the gaps? 14 A. Yes. We have continued to restore transactions to the 15 database. 16 Q. So actually since the point in time where you here in 17 October, you are putting in more transactions into the database, 18 correct? 19 A. That's correct. 20 Q. And is that part of the reason the number changes? 21 A. The number changes actually in totality went down more as a 22 result of our transaction mapping. 23 Q. So it's not from putting more information in the system, 24 that's not what made it go down, correct? 25 A. No, it did not. I mean, we add transactions to the record Jacqueline M. Sullivan, RPR Official Court Reporter 628 1 set, both collections and disbursement transactions. 2 Q. And how many transactions have you restored and the dollar 3 value of those since October of 2007? 4 A. I don't know that number as I sit here. 5 Q. Do you have that number available, though? Is that 6 something you just don't remember? 7 A. Yes, I could calculate that number. 8 Q. Now, with respect to the changes that have been made, have 9 you -- can you bring up that comparison chart? I've done a 10 chart that shows how the revenues have gone down by almost $250 11 million between these two AR exhibits. Look at this chart. 12 What I've tried to do there is at that time total collections 13 that you had from the October AR-171 and then the one on June 14 4th, and do you see, assuming that my math is right here on 15 Plaintiffs' 119, that roughly $243 million less in revenue is 16 now shown? 17 A. That's correct. 18 Q. Did you explain that to us already on direct? 19 A. I don't recall if I did or not. 20 Q. All right. I missed it if you did, but what you're saying 21 is, is that because primarily of some additional transaction 22 mapping, that the numbers have been revised since October of 23 2007, correct? 24 A. Yes. AR-171 was actually created in March of 2007. 25 Q. Okay. So it's additional -- how much of the additional Jacqueline M. Sullivan, RPR Official Court Reporter 629 1 transaction mapping that causes this change occurred before 2 October when you testified last time? 3 A. I can't tell you that as I sit here today. 4 Q. Okay. Now, can you explain in as simple of terms as 5 possible how a transaction mapping, for example, in 1986 can 6 cause the IIM beneficiaries to lose $43.7 million in receipts? 7 A. Perhaps if we could bring up one of the examples we 8 discussed earlier today that might facilitate the conversation. 9 Q. Well, it would help me if you could just describe it, how 10 transaction mapping can cause this to go down. 11 A. Okay. I'll describe it in the context of that example if 12 that's okay. 13 Q. However it would be best for you to describe it. 14 A. Okay. As you recall on the example of the forestry 15 payment, and your Honor asked me about why would you process a 16 transfer with a check code, and we discussed the fact that the 17 collections on the other side would then again be posted and a 18 collection to the system as A-01, so prior to mapping that 19 transaction those would have been counted as unique collections 20 and disbursements instead of counting them as transfers because 21 of the coding within the system itself. 22 Q. Okay. So that you did explain that one before a little 23 bit, but I want to ask you some questions about that example as 24 I recall it. I think you answered Judge Robertson's questions 25 that the system would not let you use a certain code where it Jacqueline M. Sullivan, RPR Official Court Reporter 630 1 didn't balance out. Those are my words and not yours. 2 A. That's correct. 3 Q. And what code was that? 4 A. An 12 code was used for those types of transactions. 5 However, the other major instance when that code would not be 6 used was with many of the distribution programs within the 7 system. 8 Q. Now, with respect to that, that was a restraint put in the 9 system to try to protect the accounting system, correct? 10 A. That was one of them, yes. 11 Q. And to try to protect the beneficiaries, correct? 12 A. I don't know why the accounting system was programmed the 13 way it was. 14 Q. Okay. But as a result it was then the accounting system 15 was used in a fashion that it was not intended to be used, 16 correct? 17 A. Not necessarily. There was another code in the system, for 18 instance, referred to as a debit memo that was used in 19 conjunction with the distribution programs, and that would be 20 reflected as cash again, as new money when the credits were 21 posted. 22 Q. Now, in terms of this then are you saying how much of this 23 difference are you saying come from those type of examples -- 24 the type of example you've just given with this type of 25 transaction and transaction mapping? Jacqueline M. Sullivan, RPR Official Court Reporter 631 1 A. The transaction mapping and the new transactions that we've 2 restored since AR-171 would result in these differences. 3 Q. And how much is from restored transactions, how much is 4 from mapping, do you know? 5 A. As I mentioned, I don't know the number nor amount of 6 transactions we restored since that time. 7 Q. Okay. Now, the next period that you go into with respect 8 to this AR-171 is then what affected 1995? 9 A. Beginning in 1996 I believe we have audited reports. 10 Q. Okay. And what have you -- you've -- did you go to the 11 audited reports and use that information? 12 A. We used the interest and the total collections and the 13 total disbursements from the audited reports. 14 Q. Okay. And those began in 1996? 15 A. That was the second period of audit reports. 16 Q. Okay. And so you used all that information from 1996 17 through 2007? 18 A. That's correct. 19 Q. But you didn't use that same information during the first 20 audit period by Arthur Andersen; is that correct? 21 A. I used the interest numbers and the balance numbers, but 22 not the receipt and disbursement numbers. 23 Q. Okay. So for one audit period you used it for all that 24 information, interest, balance, receipts and disbursements, 25 correct? Jacqueline M. Sullivan, RPR Official Court Reporter 632 1 A. That's correct. 2 Q. And for another period you picked two of the pieces of 3 information out of Arthur Andersen's report but not collections 4 and disbursements? 5 A. That's because the collection number I calculated was 6 higher than that which was reported in the audit. 7 Q. For each of those years? 8 A. I don't recall if it was for each of those years. There 9 was a large difference in the first year. 10 Q. So you used whatever number would be most favorable to the 11 plaintiffs? 12 A. At least in the first year. I don't recall all three 13 years. I'd have to look at the numbers. 14 Q. So you don't know whether Arthur Andersen's number would 15 end up being favorable to the government or favorable to the 16 plaintiffs? 17 A. I used a higher number at least in the first year. I'd 18 have to look at the report itself. It's right here. We could 19 look at it. 20 Q. I'm only asking this question for this: I recall earlier 21 you said you used audited reports because when a third party had 22 come and reviewed the information you thought that it would be 23 better than simply using what was in the IRMS system? 24 A. I was concerned that the numbers I had calculated in the 25 first year were much higher and so I used what I felt to be a Jacqueline M. Sullivan, RPR Official Court Reporter 633 1 more conservative number, a higher revenue number. 2 Q. So there are times then that you used what third parties 3 have done and times you didn't? 4 A. I just disclosed the only times we didn't use the audit 5 numbers. 6 Q. Were in the Arthur Andersen years of 1988 through 1990 for 7 the collection and disbursements, correct? 8 A. I'd have to confirm which specific years, but yes. 9 Q. Now, are you the person that actually went to the audit 10 reports and took the information from them? 11 A. One of my staff or I, yes. 12 Q. Okay. And you understand that each one of those audited 13 statements, the auditors express a qualified opinion on that, 14 correct? 15 A. Yes, I do. 16 Q. And you're not a C.P.A., are you? 17 A. No, I am not. 18 Q. And so essentially what you have is you have management of 19 OST, prepares a financial statement, and then auditors come in 20 and look at it and look at the books, correct? 21 A. That's correct. 22 Q. And so actually the financial statement is a financial 23 statement that is management's financial statement, correct? 24 A. As reviewed by the auditors. 25 Q. As reviewed by the auditors, and the auditors said in each Jacqueline M. Sullivan, RPR Official Court Reporter 634 1 of these cases, essentially said in layman's terms we can't 2 express an opinion on it? 3 A. I believe in the audits they discussed risks and other 4 issues. I'd have to review them to tell you the specific 5 concerns the auditors had. 6 Q. Okay. Let's look at Plaintiffs' Exhibit 120. Can you go 7 back to the first page of this document, please? Do you see 8 that this is the audit report for 1999? 9 A. Yes, I do. 10 Q. And then we'll look at page three of this document. And 11 this is from the Department of Interior or writing to the 12 special trustee, and I'm just going to ask you to look at the 13 highlighted parts there. It says Griffen & Associates issued 14 qualified opinions, and they describe something. You're welcome 15 to read it to yourself. And then the next highlighted part says 16 these conditions prevented the cash and trust fund balances and 17 the receipts and disbursements from being audited. Do you see 18 that? 19 A. I'm reading the paragraph. 20 (Witness reviews document.) 21 Yes, I do. 22 Q. And that's consistent with your understanding, correct? 23 A. Excuse me, my understanding of this audit in particular? 24 Q. Yes. 25 A. Yes, this is a page from this audit. Jacqueline M. Sullivan, RPR Official Court Reporter 635 1 Q. Okay. Well, this is actually a page where the Interior is 2 writing sending this audit on to the special trustee and 3 essentially reporting from what I just read that disbursements 4 and collections were not able to be audited, do you see that? 5 A. This is a summary that I believe the inspector general 6 prepared of the audit itself. I don't know specifically based 7 on this paragraph what Griffen & Associates said. 8 Q. Okay. Look down at what the inspector general, that would 9 be Interior's inspector general? 10 A. Yes, I believe so. 11 Q. Interfund and intrafund transfers. It says currently 12 interfund and intrafund transfers are not always recorded using 13 the CEI systems process. Do you see that? 14 A. I do. 15 Q. What's CEI? 16 A. That I believe this is referring to the TFAS system, but 17 I'm not certain. 18 Q. Okay. And it goes on to say, This results in substantial 19 manual efforts to identify and reclassify these efforts for 20 financial reporting purposes. Do you see that? 21 A. I do. 22 Q. Okay. Looking back at the chart that you have testified 23 about extensively, essentially what the inspector general is 24 saying is that it's real difficult to figure out what all these 25 transfers are that you're referring to here in the blue box. Is Jacqueline M. Sullivan, RPR Official Court Reporter 636 1 that it? 2 A. No. What I believe the inspector general's referring to 3 were transfers to and from the tribal and individual trusts and 4 to and from other trust funds managed by Interior. 5 Q. Okay. The tribal trust would then be interfund transfer, 6 correct? 7 A. That's correct. 8 Q. So that would be a transfer either going in or out of the 9 system? 10 A. IIM system, that's correct. 11 Q. And the intrafund system would be the transfers that are 12 moving up or down here with respect to inside the IIM system, 13 correct? 14 A. Yes, they would be. 15 Q. And so what even an inspector general is saying is it's 16 very hard to sort out these transfers? 17 A. I believe this is because this is the same time frame that 18 IMC and TFAS were being used, and there's the issue using this 19 duplication that we were discussing earlier. 20 Q. And you have in fact found that it's difficult to sort out 21 all those and what they were for? 22 A. It's time-consuming, yes. 23 Q. Not difficult, but time-consuming? 24 A. It is time-consuming, yes. 25 Q. And you today can't tell us in terms of receipts and Jacqueline M. Sullivan, RPR Official Court Reporter 637 1 disbursements what are the result of intrafund or interfund 2 transfers for the periods covered by your AR-171 and DX 371, can 3 you? 4 A. To the extent we've identified the transfers we've 5 eliminated them from the numbers. To the extent we haven't 6 identified the transfers the numbers would be overstated. 7 Q. You're assuming all the transfers that you're talking about 8 are transfers going out? 9 A. No. I'm assuming, as you saw, they're marked as 10 disbursements and collections, so you would be counting those 11 monies again. 12 Q. But you're looking at the IIM system on that, correct? 13 A. That's correct. 14 Q. Have you gone and looked at the other interfund, other 15 funds where funds are being transferred to and from and looked 16 at those to see what all they show about transfers to the IIM 17 system to determine whether all those transfers got properly 18 recorded in the IIM system? 19 A. I don't believe I understand your question. 20 Q. Oh, sure. In other words, in this chart you're showing 21 only transfers going out of the IIM system to the tribal trust? 22 A. That's correct. 23 Q. You don't show anything coming into the IIM system from the 24 tribal trust? 25 A. That's correct. Jacqueline M. Sullivan, RPR Official Court Reporter 638 1 Q. But you've testified that that is inaccurate, that in fact 2 money does come from the tribal trust into the IIM system, 3 correct? 4 A. Money does come in to IIM from the tribal trust, that's 5 correct. 6 Q. And so I'm asking you, did you go through the tribal trust 7 and look at that system to see if all of the transfers recorded 8 in that system is going to the IIM system had in fact been 9 properly recorded in the IIM system? 10 A. I didn't evaluate every transfer out of the tribal trust. 11 I believe what the inspector general is referring to is the fact 12 that it's difficult to separate transfers from true collections. 13 Q. I understand. I want to ask you about what the inspector 14 general said. I was asking about what you've done and what you 15 have not done and confirmed that all of the transfers shown in 16 the tribal trust system is coming into the IIM system are 17 properly recorded in the IIM system as receipts. 18 A. I have not evaluated every transfer out of the tribal trust 19 system, no. 20 MR. DORRIS: Your Honor, if we might have an afternoon 21 break. 22 THE COURT: Sure. 23 MR. DORRIS: We've been going a while. 24 THE COURT: Is ten minutes enough? 25 MR. DORRIS: Thank you, your Honor. Jacqueline M. Sullivan, RPR Official Court Reporter 639 1 COURTROOM DEPUTY: Court stands in recess until 3:45. 2 (Recess taken at about 3:37 p.m.) 3 COURTROOM DEPUTY: Please come to order and remain 4 seated. 5 MR. DORRIS: Thank you, your Honor. 6 BY MR. DORRIS: 7 Q. Ms. Herman, looking at your chart, Defendants' Exhibit 373, 8 your chart, now, where would on the disbursement side Loretta 9 Rose, where would she be on, which of those boxes would she be 10 in? 11 A. I'm sorry. To whom are you referring? 12 Q. The woman who was at the Crown Point agency of Navajo 13 descent whose account had checks written out of them, who's had 14 checks written out of her account by one of the BIA employees 15 and put into that BIA employee's own bank account. 16 A. I'm sorry. Are you suggesting she was an individual Indian 17 accountholder? 18 Q. Yes. 19 A. And a check was disbursed from her account? 20 Q. And from her account and deposited by a BIA employee into 21 the BIA employee's account. 22 A. Disbursements from individual accounts are only represented 23 through the bottom arrow on the chart. 24 Q. Okay. So this would then be characterized by you as a 25 payment to or for that beneficiary? Jacqueline M. Sullivan, RPR Official Court Reporter 640 1 A. That's correct. 2 Q. Okay. So your chart assumes, doesn't it, that all payments 3 out of individual accounts are for or to IIM beneficiaries, 4 correct? 5 A. It does not take into consideration fraud, if that's what 6 you're asking me. 7 Q. Right. Or any other type of payment that may come out 8 without the authorization of an IIM beneficiary, correct? 9 A. I'm sorry. It just refers to the fact that payment from 10 individual accounts are for or on behalf of individual account- 11 holders. 12 Q. Are you aware of any instances of fraud in all of the work 13 that you've studied and done? 14 A. I have seen several reports that have referred to instances 15 of fraud. 16 Q. Do you think those reports are right or not? 17 A. I haven't done a fraud study of the system, if that's your 18 question. 19 Q. Okay. And you've seen other reports that refer to 20 disbursements to some of these other four brown boxes, correct? 21 A. I've seen reports that talk about return of bid deposits 22 and payments of judgment monies, if that's ... 23 Q. Now, for example, in the year 2007 you show a certain 24 disbursement out of the IIM system, correct? 25 A. That's correct. Jacqueline M. Sullivan, RPR Official Court Reporter 641 1 Q. Now, when you talk about the IIM system, where is that 2 system, what department or agency is it housed at? 3 A. Today that would be, the transactional information would be 4 contained within the TFAS system. 5 Q. Okay. The money actually is at Treasury, correct? 6 A. I'm sorry, I don't understand your question. 7 Q. In other words, the money that's being referred to in your 8 IIM system, there's money in the system, correct? 9 A. That's correct. 10 Q. And that money is being held at Treasury? 11 A. The majority of that money is being held in investments. 12 Q. Okay. That are held by Treasury? 13 A. I don't know the name of the investment holder. 14 Q. Okay. Now, in terms of the cash, it's held by Treasury, is 15 that fair to say? 16 MR. QUINN: Excuse me. Objection, your Honor; beyond 17 the scope of direct. 18 THE COURT: I'm going to allow it. She may not know, 19 but I'm going to allow him to inquire. 20 THE WITNESS: It's my understanding that uninvested 21 cash is held by Treasury. 22 BY MR. DORRIS: 23 Q. Okay. Now, can you tell us of the amounts that were 24 disbursed in 2007 how much was disbursed to the third parties, 25 tribal trust, stakeholders, and IIM beneficiaries? Jacqueline M. Sullivan, RPR Official Court Reporter 642 1 A. Not as I sit here, no. 2 Q. Is that information available? 3 A. That's something that would have to be computed. 4 Q. How could you compute it? 5 A. Some of the information you could compute using the 6 electronic data. Some of the information you would have to look 7 at financial documents. 8 Q. So that information is not readily available? 9 A. No, it's not readily available. 10 Q. How long would it take to put that information together? 11 A. I can't tell you that as I sit here today. 12 Q. You've never tried to do that? 13 A. Some of that information, as I mentioned, you could do 14 using the electronic data, but for those transactions that you'd 15 have to identify a financial document I don't know how long it 16 would take to review those documents. 17 Q. Okay. Now, let's go over, for example, in the third 18 parties are you saying as third parties administrative fees are 19 paid out of the IIM system to third parties? 20 A. I'm including the government in this instance as a third 21 party, yes. 22 Q. So the government paying money from the IIM system to 23 itself, you're referring to the government as a third party? 24 A. That's correct, in this instance. 25 Q. And you've got one of the things that the government is Jacqueline M. Sullivan, RPR Official Court Reporter 643 1 paying to itself is administrative fees? 2 A. That's correct. 3 Q. And those administrative fees are for what? 4 A. Collected on preparations, for instance. 5 Q. Last time you were here and you testified I recall your 6 testimony, and I've read it recently, was that in fact the 7 administration fees never got into the IIM system, that they 8 were paid directly by the leasees to the government. Do you 9 recall that? 10 A. In the particular example we discussed I recall that, but 11 that's not a general statement about the system. 12 Q. And you didn't make that general statement last time? 13 A. Not that I recall. I haven't reread my testimony, though. 14 Q. So can you tell us the amount of administrative fees that 15 the government has paid to itself during any period of the 16 trust? 17 A. Not as I sit here today, no. 18 Q. How would you go about getting that information? 19 A. I'd have to analyze the disbursements from those accounts, 20 and in some instances I'd likely have to pull financial 21 documents to determine that. 22 Q. When you say "financial documents," similar to the 23 documents that you've gone through with us today? 24 A. That's correct. 25 Q. And those would be documents that would be at Lenexa? Jacqueline M. Sullivan, RPR Official Court Reporter 644 1 A. In some instances. 2 Q. What about the amount of the unsuccessful bid deposit, do 3 you know what that amount is? 4 A. Not as I sit here today, no. 5 Q. Okay. Now, what about the tribal trust, can you tell what 6 the amount that has gone to the tribal trust is for any 7 particular year? 8 A. To the extent that we've mapped those transactions, yes, 9 but I can't say that that's the number in its totality, as we 10 still have work remaining. 11 Q. And that would then only be for the mapping period that 12 you're doing? 13 A. For '86 through present, I think so. 14 Q. And so whatever went into the tribal trust before you you 15 couldn't do, you couldn't determine; is that correct? 16 A. I would have to look at a different set of information. 17 Q. What information would that be? 18 A. As I mentioned, we're beginning to rekey the IRMS 19 transaction registers, and prior to that you would have to look 20 at manual ledgers. 21 Q. Okay. Stakeholders -- let me ask this question. If from 22 an SBA account disbursement is made directly to an IIM 23 beneficiary, that would be then the beneficiary would be in a 24 stakeholder category; is that correct? 25 A. If your question is if that person is an individual Jacqueline M. Sullivan, RPR Official Court Reporter 645 1 accountholder as well? 2 Q. Yes. 3 A. Yes, that would still appear in the stakeholder box. 4 Q. Are you saying that in order to be an IIM beneficiary you 5 have to have an account? 6 A. I'm referring to IIM beneficiaries in this situation as 7 holders of the accounts in the system. 8 Q. Okay. So when you talk about an IIM beneficiary, that's 9 someone that has an account and account number in the system? 10 A. That's correct. 11 Q. And we recall that when you were here and testified in 12 October you had not done any effort to do an external validation 13 to determine that all IIM beneficiaries in fact had an account, 14 do you recall that? 15 A. I'm sorry, I don't believe I understand the question. 16 Q. Yes. In other words, you can't say that everybody that has 17 an account number in the IIM system, that that includes all IIM 18 beneficiaries? 19 A. In this instance, as I mentioned, I'm referring to IIM 20 beneficiaries as those who hold accounts. 21 Q. I understand that. I guess my question is, do you know 22 whether or not all people that are IIM beneficiaries have 23 accounts? 24 MR. QUINN: Objection, your Honor. It calls for a 25 legal conclusion. Jacqueline M. Sullivan, RPR Official Court Reporter 646 1 THE COURT: Overruled. 2 THE WITNESS: If you'll explain to me, sir, how you're 3 defining IIM beneficiaries I'll attempt to answer the question. 4 BY MR. DORRIS: 5 Q. A beneficiary that someone that has a beneficial interest 6 in any of the trust property. 7 A. I believe that if someone didn't prior to the 8 implementation of the TMS, it's my understanding that if someone 9 hadn't leased their land and wasn't expecting a collection on 10 that land an account number wasn't necessarily established in 11 the system. 12 Q. Okay. Have you done anything or FTI to your knowledge have 13 done anything to determine that all individual Indians that have 14 beneficial interest in any of the trust property have accounts, 15 in fact have account numbers? 16 A. It's my understanding now with the implementation of TMS 17 that everyone who has an interest in land as a TFAS account 18 number. 19 Q. I hear you say that. And my question to you was, has FTI 20 done anything to validate that and determine if that's accurate? 21 A. No, I have not. 22 Q. All right. Now, are there any sources of income other than 23 those that you have referred to here in the green box? 24 A. Yes. That would be included in the "etcetera" category. 25 Q. Under the Other Receipts, Etcetera? Jacqueline M. Sullivan, RPR Official Court Reporter 647 1 A. That's correct. 2 Q. And what does that include? 3 A. It includes numerous things, so range income for instance, 4 stock sales, bid deposits, bonds, school fees. There's many 5 different types of monies that actually come into the IIM 6 system. 7 Q. Okay. When you talk about a disbursement, you're talking 8 about something that would be reflected by a red arrow going to 9 the right of your chart, correct? 10 A. That's correct. 11 Q. So in other words, when you talk about a disbursement 12 you're talking about something that goes outside the IIM system? 13 A. That's correct. 14 Q. You would not view a transfer from an SBA to an individual 15 account as a disbursement? 16 A. No. I'd consider that a transfer. 17 Q. And now you were asked a question by Judge Robertson about 18 this chart, and I think the word was this was really your 19 construct of the way you'd gotten where you viewed the 20 historical flow of funds in the IIM system, correct? 21 A. That's correct. 22 Q. Did you prepare this chart? 23 A. Yes, I did. 24 Q. All right. And when we say that it's your construct, for 25 example, there are nonlabels that go on this account as Jacqueline M. Sullivan, RPR Official Court Reporter 648 1 nonindividual accounts and individual accounts? 2 A. No, there's not such a label in the system. 3 Q. Or a break down between nonindividual accounts, a group of 4 those and individual accounts? 5 A. Only to the extent that you consider that, for instance, 6 within the IIM system individual accounts are typically referred 7 to as GL-230611. 8 Q. Now, in terms of this, when we look at AR-171 and then the 9 revisions that you've given us in May and June, do those 10 always -- are those always consistent with what you've described 11 as disbursements here? 12 A. I'm sorry. Could you repeat the question? 13 Q. Yes. When I look at Defendants' Exhibit 371 and I look 14 under the disbursements column there -- 15 A. Yes. 16 Q. -- that's the amount of these red arrows, correct? 17 A. That's correct. 18 Q. It's not a transfer inside? 19 A. I would only include transfers to the extent we hadn't yet 20 identified them. 21 Q. Okay. But if there were transfers included in the 22 disbursement category, then they should be taken out through 23 this chart, correct? 24 A. They would be overstating collections and disbursements. 25 Q. Well, I was just asking about disbursements now, Ms. Jacqueline M. Sullivan, RPR Official Court Reporter 649 1 Herman. I was asking you if there were disbursements shown in 2 this column that were transfers in the system and not red arrows 3 going out. 4 A. It's possible, yes. 5 Q. Then that would have been an overstatement of 6 disbursements, correct? 7 A. And an equal overstatement of receipts, yes. 8 Q. So that if there was a -- if the receipts included the 9 transfers too, then you would view that as an overstatement of 10 receipts? 11 A. That's correct. 12 Q. But to the best of your knowledge, there are no such 13 transfers in your disbursement category, are there? 14 A. Yes. As I mentioned, our data validation work is still 15 continuing. We still have transfers that we're mapping. 16 Q. What about your data validation study is a limited part of 17 time? What about before 1985, what are you doing to try to take 18 out disbursements, internal disbursements that are being treated 19 as disbursements, internal transfers that are being treated as 20 disbursements? 21 A. Our study right now is focused on the '86, or excuse me, 22 '85 forward period. 23 Q. So you're not looking at that at this point? 24 A. Not at this point, no. 25 Q. You said something in response to one of Mr. Quinn's Jacqueline M. Sullivan, RPR Official Court Reporter 650 1 questions yesterday that was -- that I thought I heard, I've not 2 read the transcript from your earlier testimony, but he said 3 that you characterized certain things by their destination? Do 4 you remember something to that effect? 5 A. Yes, I do. 6 Q. What do you mean by that? 7 A. For instance, a movement from the nonindividual section to 8 the tribal trust, it's identified as tribal trust based on 9 identifying the posting in the tribal trust system. 10 Q. Okay. So that you are characterizing what's in the IIM 11 system by who it got disbursed to? 12 A. I'm sorry. I think perhaps I'm not explaining clearly. 13 There are particular types of accounts, special deposit 14 accounts, tribal IIM accounts, and other administrative 15 accounts, that are included in this nonindividual section. What 16 I was referring to earlier was how you would define which box 17 that the monies fall into in disbursements. 18 Q. So if the disbursement went there then you consider that to 19 be tribal trust money? 20 A. That's correct. 21 Q. Because you are assuming that if the disbursement was made 22 there it was correctly made to the person who shouldn't receive 23 it? 24 A. This chart is not attempting to demonstrate whether or not 25 the money should have gone there, only where the money did go. Jacqueline M. Sullivan, RPR Official Court Reporter 651 1 Q. Okay. Because in fact as a part of all of your studies, 2 you really have done very little to determine if the funds are 3 flowing to the correct one of these brown boxes, correct? 4 A. Only through our LSA study, and in some regards through our 5 data validation study. 6 Q. Now, you testified also today about this DX371, and you 7 were asked by the plaintiff using for some period of time on 8 their similar calculation a disbursement rate of approximately 9 seventy percent? 10 A. That's correct. 11 Q. And you testified something to the effect that one of the 12 problems you had with that is that the thirty percent factor 13 that was then being viewed as not having been disbursed would 14 never view any of the balance as being disbursed. Do you 15 remember testifying something to that effect? 16 A. I believe what I said, that it wasn't taken into 17 consideration until the final deduction of the current trust 18 fund balance. 19 Q. Okay. Now, if the seventy percent factor, though, as you 20 have studied it, was taken over a period of time, correct? 21 A. I'm sorry? 22 Q. The thirty percent or seventy percent disbursement rate was 23 calculated over a period of time from roughly 1988 to 2002 based 24 on CPNR data? 25 A. Based on CPNR date and the plaintiffs' revenue number? Jacqueline M. Sullivan, RPR Official Court Reporter 652 1 Q. Right. And that then during those years there was 2 disbursement of beginning balances in each of those years 3 perhaps in the seventy percent, correct? 4 A. The way the seventy percent was being calculated was based 5 on revenues in a particular year, not based on the balance and 6 the revenues. 7 Q. Okay. So you don't think that it includes the payment of 8 any of the balance? 9 A. It doesn't appear based on the calculation that that's 10 being taken into consideration. 11 Q. Now, would you explain to me when we get to the second 12 chart, second page of Defendants' Exhibit 371 -- can you bring 13 that up, please -- the column that says Balance Difference, and 14 there's a total of $158.7 million. Do you see that? 15 A. I do. 16 Q. Now, I noticed that for the first several years above that 17 there is no balance difference. Do you see that? 18 A. I do. 19 Q. What is this saying, this balance difference of 158.7 20 million? 21 A. This is the difference between the calculated ending 22 balance and the reported ending balance. 23 Q. Okay. So what does that mean? 24 A. That there is a difference between the receipts and 25 disbursements as calculated in this schedule and the balances as Jacqueline M. Sullivan, RPR Official Court Reporter 653 1 reported in the reports I relied on. 2 Q. So that somebody to the right of this blue box on your 3 chart, one of these people, the IIM beneficiary, stakeholders, 4 tribal trust third parties, are entitled to that money; is that 5 correct? 6 A. That simply taking into consideration the fact that the 7 calculation we made is different from the balances as reported. 8 Q. Okay. So that's just a number? 9 A. That's the difference between the receipts and the 10 disbursements that we were able to identify through our analysis 11 and the balances as reported. 12 Q. So is it fair to say it this way: That even on your chart 13 as you calculated it up, you believe that $158.7 million more is 14 in the IIM system than the present stated balance of the system? 15 A. It depends on which calculation is more accurate. What I'm 16 trying to say is that there's $158 million difference that I 17 can't explain. 18 Q. Is $158 million more? In other words, it's more money, not 19 less money, than what's reported to currently being in the 20 system, correct? 21 A. I've calculated more than what's currently in the system, 22 that's correct. 23 Q. Now, what significance at all is it that you show that for 24 a particular years or periods? 25 A. It was just a computation I did on each and every line item Jacqueline M. Sullivan, RPR Official Court Reporter 654 1 to show the difference in that particular year. 2 Q. So if we want to know when that $158.7 million difference 3 occurs, you show us in different years and periods, correct? 4 A. That's correct. 5 Q. So that, for example, between 1887 and 1920 you would find 6 that there was $11.1 million more received into the system and 7 not disbursed than the reported ending balance, correct? 8 A. No. What that's saying is that based on the receipts and 9 disbursements calculated that my number is $11.1 million less 10 than the reported balance. 11 Q. Okay. So that what you're saying is, is the reported 12 balance back then you've now gone back and redone it such that 13 you actually think there's less money that's come into the 14 system than what they thought meant? 15 A. This is a calculation based on this time frame. The 16 receipt and disbursements that have been estimated were less 17 than the balance as reported in the historical report. 18 Q. So if you go to the historical report it would show that 19 there's more money there than what you're calculating on this 20 chart? 21 A. For that particular line item, yes. 22 Q. And for the next line item, correct? 23 A. Yes. 24 Q. Would you say then that you believe those historical 25 reports are inaccurate? Jacqueline M. Sullivan, RPR Official Court Reporter 655 1 A. No. I'm suggesting that I don't know which of the two is 2 more accurate. 3 Q. So you're just putting information here and not indicating 4 whether it's accurate or not? 5 A. This is the best historical information that I was able to 6 find and I'm reporting it as such. 7 Q. And then from 1952 to 1971 it's showing a balance 8 difference of 156.8 million. That would be indicating that 9 there's $156.8 million more in the system than what the balance 10 being shown at that time is, correct? 11 A. No. That means that I calculated more money than was 12 reflected in the historical balance. 13 Q. Understood. And if your calculations are correct, that 14 would then indicate that there's $156.8 million more in the 15 system than was then being carried as a balance reported in the 16 system, correct? 17 A. I'm sorry. I believe that I don't understand your 18 question. 19 Q. Yes. In other words, if the calculations that you've set 20 forth out here are correct, then as of 1971 there's $156.8 21 million more in the IIM system than the reported balance at that 22 time? 23 A. That's correct. 24 Q. None of your interest figures in Column B take into account 25 anything in Column L, do they? Jacqueline M. Sullivan, RPR Official Court Reporter 656 1 A. No. The interest column takes into consideration interest 2 earned on the money sitting in the IIM system. 3 Q. Is that interest that was actually earned or is that 4 interest that someone has gone back and calculated as having 5 should have been earned? 6 A. These are based on investment reports and audits and other 7 documents. It's not a should have been earned calculation. 8 Q. So this is a calculation that that much interest was 9 actually earned before 1972. Is there no information on what 10 interest was earned in the system? 11 A. There are some reports that include interest but not 12 covering that entire time frame. 13 Q. In light of that, how could you be certain that the 14 interest is included in the collections? 15 A. I'm sorry. The total collections is an estimate provided 16 by NORC, as I mentioned. 17 Q. So you wouldn't -- you'd think that's where it should be 18 included, correct? 19 A. That's correct. 20 Q. Did you provide NORC with any information regarding 21 interest rights for purposes of that calculation? 22 A. As I mentioned, Dr. Angel provided NORC reports. Some of 23 those historical reports did list interest earnings. 24 Q. Now I want to understand the Osage annuity calculation that 25 you've made here, and I take it we probably need to go back to Jacqueline M. Sullivan, RPR Official Court Reporter 657 1 the notebook. 2 A. That's correct. 3 Q. Can you tell us the correct tab that would provide the best 4 overview of how you come up with this Osage calculation? 5 A. Depends on the time frame you'd like to discuss. 6 Q. Okay. I guess your answer makes me ask this question: I 7 take it it's calculated differently for different time frames? 8 A. No. What I meant by that statement was we have electronic 9 data from '72 forward so we have actual numbers from the system. 10 In earlier years we have some, but not all, of the data. 11 Q. Okay. So from '72 forward you have what you say is actual 12 data for the Osage? 13 A. Yes. I believe there may be one gap or two in 1972, but 14 I'd have to look to confirm that. 15 Q. Where did you get that information? 16 A. From some of the data that has been rekeyed from the GL 17 system for the tribal reconciliation. 18 Q. But where did you get the Osage data generally? 19 A. The headright information, is that the question? 20 Q. Yes. 21 A. We have two sources for the total headright payment. One 22 is from the Osage website, and one is I believe a 1975 annual 23 report published by the tribe. 24 Q. Okay. Now, would you go and show me the information you 25 used for the Osage from 1972 forward? Jacqueline M. Sullivan, RPR Official Court Reporter 658 1 A. Would you like summary information, sir, or detailed 2 information? 3 Q. Let's start off with the summary and see if that won't do 4 the trick. If you turn to page 150 behind tab Osage A. Okay. 5 And we're in Defendants' Exhibit 372. 6 A. That's correct. So you'll see beginning in 1972 the total 7 annuity payment, and it lists the annuity payment amount. 8 Q. Okay. And then the next column? Let's just stop right 9 there for a second, okay? 10 A. Okay. 11 Q. I'm at 1972, and it shows a total amount of $6,100,000? 12 A. That's correct. 13 Q. Okay. And then go ahead. 14 A. The next column lists the percentage of documents located 15 relative to the number of payments that were made in that 16 particular year. 17 Q. What do you mean, percentage of documents located? 18 A. So if I had four payments I'd expect to find four documents 19 so if I found all four that would be a hundred percent. 20 Q. Okay. Okay. And then the next one? 21 A. The next column lists the payments that were made directly 22 from the tribal trust system. 23 Q. And that would be by way of a Treasury check? 24 A. I believe so. 25 Q. Okay. Jacqueline M. Sullivan, RPR Official Court Reporter 659 1 A. And the next column lists the funds that were transferred 2 into the IIM system. 3 Q. Okay. Now, the column that had the $4,600,000, and I'm 4 approximating under Column D on this, is that right, those then 5 are largely going to individual Indians who have a headright 6 interest, correct? 7 A. There are also corporations and nonIndians that hold head- 8 right interest. 9 Q. There are a few, but most of them and still even today are 10 individual Indians, correct? 11 A. I haven't studied that. 12 Q. So then you're showing a-million-one-fifty or 13 a-million-five-hundred-four-thirty coming into the IIM system? 14 A. That's correct. 15 Q. That is a number that then goes on to your chart? 16 A. That's correct. 17 Q. So that when we go to DX371 for 1972, we see $1.5 million, 18 correct? 19 A. I'm sorry. I'm flipping pages. Yes, you do. 20 Q. Okay. And so that none of the $4.6 million that was paid 21 directly to individual Indians, whatever part of that was paid 22 to individual Indians, is included in your chart? 23 A. I did not include payment from the tribal trust system, no. 24 Q. Right. And your understanding of the Osage is based on 25 what? Jacqueline M. Sullivan, RPR Official Court Reporter 660 1 A. I'm sorry, my understanding of what component of the Osage? 2 Q. That it's in the tribal trust and being paid out of the 3 tribal trust? 4 A. That's correct. 5 Q. Yes. And how did you get that understanding? 6 A. Because I watched -- I traced the transactions crediting 7 into the IIM system, and then I began reviewing financial 8 documents. 9 Q. Okay. And so in your calculation you're treating all of 10 that money as being tribal money; is that correct? 11 A. I'm not making an assessment of that other money, only that 12 it doesn't come into the IIM system. 13 Q. Okay. So that even if it was paid to individual Indians 14 from the Treasury, you're not viewing that as being coming into 15 the IIM system? 16 A. No, I am not. 17 Q. And that's a part -- that is what then drives what you said 18 was roughly a $10 billion difference between your calculations 19 and the plaintiffs' calculations? 20 A. Including interest, yes. 21 Q. Now, for prior periods does this chart help us at all in 22 terms of explaining how you calculated Osage? 23 A. This is the summary chart, so you could continue back 24 through to the chart to see all of the different historical 25 documents that we had available and those that we did not. Jacqueline M. Sullivan, RPR Official Court Reporter 661 1 Q. Okay. Now, look forward to the next page of this, which 2 would be Bates page 151. And I notice that there are a whole 3 range of percentages that are being used there. How were those 4 -- toward the bottom. Are you with me? 5 A. I am. 6 Q. I see five different percentages and averages. How are 7 those then used in any of your calculations? 8 A. As you turn to the page previous you can see where we're 9 utilizing percentages in our calculation, so for years where we 10 weren't able to locate a hundred percent of the documentation we 11 had to estimate what the payment was that came into the IIM 12 system. 13 Q. Can you just take me from showing me where one of these 14 percentages is used somewhere so that I can follow what you're 15 saying? 16 A. Certainly. For instance, in 1930 we only were able to 17 identify 75 percent. I apologize, if you flip back to the first 18 page. 19 Q. What year again? 20 A. To 1880, or excuse me, 1887, you'll see that the estimated 21 IIM payment column is color-coded and you'll see that the first 22 section is in blue and the next section is in yellow in that 23 column. 24 Q. Oh, down toward the bottom of the page? 25 A. It's the column that says H. The first half is blue and Jacqueline M. Sullivan, RPR Official Court Reporter 662 1 then at the very bottom it's yellow, and as you continue to page 2 150 it's yellow at the top. 3 Q. Yes. 4 A. So those correspond with the percentages with the similar 5 colors on page 151. 6 Q. Oh, okay. So if I go to page 151 and I see a blue, that 7 means that it's 31.2 percent was used between 1880 and 1925? 8 A. No. Only for the years that are in the blue coloring, so 9 it would be 1887 is the first year we carry forward through to 10 1925. 11 Q. Well, I'll need to study this some more obviously and ask 12 you more questions about it, but what we have, we got all 13 different percentage, is primarily what I'm wanting to ask you. 14 A. Over time a different amount of the Osage annuity came into 15 the IIM system, and as you -- 16 Q. Maybe let me get at it this way. There are times where you 17 don't know actually how much came in, you don't have any 18 documentary evidence as to how much actually came in in your 19 opinion to the IIM system so you have calculated percentages 20 based on other years where you do have information to apply 21 against the total in those years? 22 A. That's correct, for certain time frames. 23 Q. So for certain of the Osage time frames these are estimated 24 amounts that have come into the IIM system? 25 A. Yes, based on the other years and documents that we Jacqueline M. Sullivan, RPR Official Court Reporter 663 1 located. 2 Q. Now, let me ask you this question. Look at on Bates page 3 151, 1985, '86, and '87. In those years you show that there 4 was -- that you've located a hundred percent of the documents. 5 Do you see that? 6 A. I do. 7 Q. So you found everything? 8 A. I did. 9 Q. And very few checks, correct? 10 A. That's correct. 11 Q. And virtually all of the money in those three years you 12 show is coming into the IIM system? 13 A. That's correct. 14 Q. Now, were each of those Osage headright owners, did they 15 have IIM accounts? 16 A. In this year, these three years -- excuse me -- were a bit 17 of an anomaly. This was right as Osage was converting into IRMS 18 in 1988. It's my understanding that these payments were made 19 similar fashion but from the special deposit accounts. The 20 direct pay component was paid and the balances was transferred 21 down to individual accounts. 22 Q. Let me ask my question again. My question was: Did each 23 one of those Osage headright owners have an IIM account? 24 A. I'm sorry, I thought I had answered that. These funds were 25 credited into a special deposit account. Some of the money was Jacqueline M. Sullivan, RPR Official Court Reporter 664 1 transferred to individual accounts and some was paid via check 2 from the special deposit account. 3 Q. You obviously think you're answering my question, and it's 4 late in the day and I've looked at a lot of new material today. 5 I thought it was kind of a yes-or-no deal. Do all of the Osage 6 headright owners other than the corporate ones have individual 7 Indian IIM accounts? 8 A. I don't know if all of the Osage headright owners have 9 individual accounts. 10 Q. Okay. But you show that and then you use the numbers that 11 are in the column O over on your DX371, correct? 12 A. Because all of those monies came into the IIM system 13 itself. 14 Q. And so you've included all of those here under Osage 15 Annuity, correct? 16 A. That's correct. 17 Q. And then do you use, do you back those years out at all 18 when you calculate your percentages below? 19 A. I'm sorry, there's no need to calculate a percentage during 20 this period because we have all of the documents. 21 Q. Okay. So the fact that you see that kind of unusual 22 situation for those three years, that does not affect in any way 23 your calculations for other years? 24 A. During this time frame, as I mentioned, we have all of the 25 documentation so there's no need to estimate. Jacqueline M. Sullivan, RPR Official Court Reporter 665 1 Q. Right. So that has not affected any of the percentage 2 below, correct? 3 A. That's correct. 4 Q. Because previously when you had calculated AR-171 you had 5 used, you had calculated the Osage a little differently, 6 correct? 7 A. We've been able to locate additional documents since the 8 last time we prepared an RS-71. 9 Q. So much of what is in this notebook that we were given 10 today for Osage is now in terms of your analysis of DX371? 11 A. Information prior to 1972. I believe that after 1972 this 12 information is consistent. 13 MR. DORRIS: Your Honor, I got through as much of this 14 notebook as I could over the long lunch break we had today and I 15 really almost had no time to review other stacks of exhibits 16 that we got. I'd be more than happy to proceed on with the 17 examination, but I will tell you I think it would be much more 18 efficient and we will use less time if I will be permitted to 19 have a chance to study this and understand it a little better 20 and continue the examination on Monday. 21 MR. QUINN: We have no objection to that, your Honor, 22 as long as it continues on Monday. 23 MR. DORRIS: It will continue on Monday. 24 THE COURT: That's reasonable to me. 25 MR. DORRIS: I'm sorry. I felt like I interrupted Jacqueline M. Sullivan, RPR Official Court Reporter 666 1 you. 2 THE COURT: I was closing up my papers. 3 MR. DORRIS: I would say that clearly with the 4 information it's clear that there's information from Dr. 5 Scheuren that is extensive that we are going to need to review 6 and we're going to run into the same thing next week. 7 THE COURT: Yes, we are. What's the story on 8 Scheuren's data? 9 MR. WARSHAWSKY: Your Honor, we can certainly make 10 available Dr. Scheuren's data. It consists of basically a 11 computer application which we will provide to the plaintiffs. 12 It's a SAS application and a data set which I understand 13 includes about twelve million values. We can make it available. 14 THE COURT: You got to give them what you can give 15 them and give it to them as soon as possible. 16 MR. WARSHAWSKY: And I have asked NORC to start 17 compiling it because I anticipated we would get to that point. 18 THE COURT: Who is the next witness? 19 MR. WARSHAWSKY: That would be Dr. Edward Angel. 20 MR. DORRIS: It's the same sort of deal, your Honor. 21 I know there's a large collection of documents and analysis that 22 he's going to have because it's clear when you look at this that 23 that is based in part on that too. 24 THE COURT: Well, let me make it clear to the 25 government here. You got to turn over what you can turn over as Jacqueline M. Sullivan, RPR Official Court Reporter 667 1 soon as you can turn it over. If they don't have time, if he 2 has to prepare cross-examination on this kind of stuff over a 3 lunch hour that means he's going to get several days. We're 4 just going to have to adjourn and come back. I don't want to do 5 that. I want to get this data in their hands, so come on, get 6 them in the plaintiffs' hands. 7 MR. WARSHAWSKY: To the extent the plaintiffs are 8 compiling any analyses. 9 THE COURT: Of course. 10 MR. WARSHAWSKY: Thank you. 11 MR. DORRIS: Thank you, your Honor. 12 THE COURT: I think that's it for the week, is it? 13 All right, Ms. Herman, you'll be back here on Monday. 14 THE WITNESS: Yes, your Honor. 15 THE COURT: I guess you will. 16 All right. Have a pleasant weekend everybody. 17 MR. DORRIS: Thank you, your Honor. 18 (Proceedings adjourned at about 4:32 p.m.) 19 - - - 20 21 22 23 24 25 Jacqueline M. Sullivan, RPR Official Court Reporter 668 1 I N D E X. 2 3 WITNESSES: 4 5 MICHELLE HERMAN 6 Cross-examination by Mr. Dorris 586 7 8 9 10 11 12 E X H I B I T S 13 14 Plaintiffs' Exhibit 15 No. Identification Marked Admitted 16 117 599 17 18 19 20 21 22 23 24 25 Jacqueline M. Sullivan, RPR Official Court Reporter 669 1 CERTIFICATE 2 I, JACQUELINE M. SULLIVAN, Official Court Reporter, 3 certify that the foregoing pages are a correct transcript from 4 the record of proceedings in the above-entitled matter. 5 __________________ JACQUELINE M. SULLIVAN 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Jacqueline M. Sullivan, RPR Official Court Reporter