The federal judge in the Washington District of Columbia has granted preliminary approval to a long-running and highly contentious $3.4 billion Cobell Settlement - a move that could end the class action litigation over the mismanagement of trust fund assets for hundreds of thousands of Native Americans.

Judge Thomas Hogan's Dec. 21 approval kicks off a process which includes informing potentially 600,000 beneficiaries of the deal between the plaintiffs and the government.

Elouise P. Cobell, of Browning, MT, the lead plaintiff of the class action, had filed a lawsuit in 1996 in Washington's federal trial court on behalf of Native Americans whose Individual Indian Money Accounts have been mismanaged trust fund assets stemming from the use of land for oil, minerals, gas, timber and other resources by the federal government.

The Interior Department leases the land to others for farming or resource development and is supposed to pay the money generated by the land into Individual Indian Money trust accounts.

The Interior currently manages about 56 million acres of Indian trust land, administering more than 100,000 leases and about $3.5 billion in trust funds.

But the money that was supposed to go into Indians' accounts was squandered, stolen and mismanaged for more than a century, the plaintiffs alleged in the lawsuit.

According to official figures, for fiscal year 2009, funds from leases, use permits, land sales and income from financial assets, totaling about $298 million were collected for more than 384,000 open Individual Indian Money Accounts and $566 million was collected for about 2,700 tribal accounts for more than 250 tribes.

The Cobell Settlement required that Congress must pass a legislation to authorize or confirm specific aspects. After a year, the Congress passed the legislation for approving the settlement last month. Then, President Barack Obama signed off on the deal on December 8.

Under the terms of the settlement, the federal government will create a $1.5 billion Trust Accounting and Administration Fund and a $1.9 billion Trust Land Consolidation Fund.

The settlement also creates a $60 million federal Indian Education Scholarship fund to improve access to higher education for Indian youth, and it includes a commitment by the federal government to appoint a commission that will oversee and monitor specific improvements in the Department's accounting for and management of individual Indian trust accounts and trust assets, going forward.

According to the agreement, it creates two groups of Indians eligible to receive settlement money - one is Historical Accounting Class and the other one is Trust Administration Class.

This settlement is believed to be the largest ever against the federal government and dwarfs the combined value of all judgments and Settlements of all Indian cases since the founding of the nation.

Over the past thirteen years, the parties have tried to settle this case many, many times, each time unsuccessfully, said Attorney General Eric Holder.

This settlement is fair to the plaintiffs, responsible for the United States, and provides a path forward for the future, Holder said.

These historic settlements mark a new chapter in our work to strengthen the nation to nation relationship with Indian Country, said Ken Salazar, secretary of the Interior on the occasion of President's signing of major settlement.

The $3.4 billion settlement honorably and responsibly addresses long-standing injustices and demonstrates President Obama's commitment to reconciliation and empowerment for Indian nations, Salazar said.

J.P. Morgan Chase & Co. will administer the disbursement of the settlement money. The judge also authorized $20 million to launch a notice program in January to inform individual Indian beneficiaries about the settlement. A fairness hearing is scheduled for next June.