Utah Legislature approves $33 million settlement in Navajo trust fund case

SALT LAKE CITY — The Legislature has signed off on a $33 million agreement to settle a long-standing lawsuit involving a state-managed trust fund intended for Navajos in San Juan County.

The agreement spelled out in HJR32 would end 17 years of litigation over the management of an oil-royalty trust fund created by the federal government to benefit the health, education and welfare of Navajos using money from the oil found on their land.

Pelt v. Utah, a class-action lawsuit filed in 1992, claimed that the state mismanaged the fund, did not keep proper records and either lost or misspent money. Mediation in the case began in June and was overseen by a U.S. Court of Appeals senior judge.

The resolution, already passed by the House, was approved 25-0 by the Senate Tuesday. Gov. Gary Herbert has approved the settlement, but a final decision is up to the federal court.

Sen. John Valentine, R-Orem, told senators the state could end up paying "significantly more than this amount" if they continued the case.

"It's better to settle a case such as this, where you have uncertainty," Valentine said, calling the case "one of embarrassment for the state."

The settlement calls for the state to pay $1 million this year, $5 million next year and $13.5 million in both 2012 and 2013.

— Lisa Riley Roche