In a victory for Navajos in San Juan County who filed a lawsuit against the state in 1992, U.S. District Judge Tena Campbell ruled that Utah must show that the money was properly spent for the benefit of tribal members. Tribal members claim that millions of dollars from oil royalties were lost through mismanagement by the state, which serves as trustee.

Campbell rejected an argument that beneficiaries themselves were responsible for proving that some disbursements from the Navajo Trust Fund were improper, a task that could involve sorting through hundreds of boxes of documents.

The judge gave detailed instructions on what the Utah administrators must do to meet their accounting responsibility. She ordered Utah administrators to detail the purpose of each expenditure of money from the fund and provide documentation on them.

Campbell said accounting principles in cases such as this one have been long established.

"The state cannot fairly argue that it should not be held to a standard that has been articulated for many years," Campbell wrote.

The Navajo Trust Fund was created in 1933 to hold 37 1/2 percent of the royalties from drilling in the Aneth oil fields for the benefit of tribal members living in San Juan County. The rest of the royalty money, which began coming into the fund in the late 1950s, goes to Navajo Nation headquarters in Window Rock, Ariz.

Utah Navajo chapters are allocated money based on population for projects, such as new housing or health care. The state helped create two corporations - the Utah Navajo Development Council (UNDC) and Utah Navajo Industries (UNI) - to spend the money and retained some control over those bodies.

The state distributed $22 million directly to Navajos in San Juan County and $40 million through the two corporations, according to Salt Lake City attorney Brian Barnard, who represents the tribal members in their class-action lawsuit.

His clients' lawsuit, filed on behalf of the 7,000 to 8,000 Navajos in San Juan County, claims money was squandered and alleges that Utah administrators have to show the money was spent in compliance with the terms of the trust.

The state responded it was required only to show the money went to Navajos in San Juan County.

In 1999, the state provided an initial accounting of where the money went, Barnard said, and the beneficiaries found disbursements that appeared to be out of compliance with the trust requirements.

Including the interest that would have accrued, the tribal plaintiffs estimate that beneficiaries are owed about $150 million that was lost, Barnard said. Under Campell's ruling, the first round of accounting by the state will cover fiscal years 1987 through 1991 and must be completed by Nov. 5. The plaintiffs then must submit their challenges of any disbursements by Jan. 14, with the state responding to those no later than Feb. 25.

After that, the judge will make rulings on individual challenges to disbursements.

Both sides are awaiting a decision from the 10th U.S. Circuit Court of Appeals in Denver on whether Utah has to account for disbursements dating back to 1959.

pmanson@sltrib.com