Feds agree to pay $940 million to settle claims that US government shorted tribes on contracts

The Obama administration has agreed to pay a group of Native American tribes nearly $1 billion to settle a decades-old claim that the government failed to adequately compensate tribes while they managed education, law enforcement and other federal services.

Interior Secretary Sally Jewell and Justice Department officials plan to announce the proposed class-action settlement Thursday along with leaders from the Oglala Sioux Tribe, Zuni Pueblo and Ramah Chapter of the Navajo Nation. They are among the lead plaintiffs in a contract-dispute lawsuit filed in 1990.

The $940 million proposed payout would represent the latest in a string of major settlements between tribes and the federal government in the last five years. It still must be approved in U.S. district court.

"Rather than the federal government and tribes fighting all the time and litigating against one another, we need to be partners looking toward the future," Kevin Washburn, head of the Bureau of Indian Affairs, told The Associated Press in an interview last week.

In 2010, the Interior Department settled a class-action lawsuit named for Elouise Cobell of the Blackfeet Tribe in Montana for $3.4 billion over royalties owed to generations of individual Indian landowners. Last year, the administration agreed to a $554 million settlement with Navajo Nation leaders over the mismanagement of resources on the sprawling, 27,000-square-mile reservation.

The latest settlement over federal contracts is the result of a 2012 U.S. Supreme Court ruling in favor of the tribes.

They had argued that the government did not appropriate enough money to cover costs under the agreements, and the underfunded contracts meant tribes often faced shortfalls as they tried to meet essential needs in their communities, ranging from health services to housing.

Since 1975, tribes have been able to opt into federal contracts under the Indian Self-Determination Act and gain oversight of Bureau of Indian Affairs programs meant to fulfill the government's trust obligations to Native Americans.

More than 600 tribal entities, including governments and their organizations, are part of the lawsuit.