Judge holds Interior head in contempt
Fraudulent conduct in Indian trust cited again
Great Falls Tribune
September 18, 2002
WASHINGTON — A federal judge Tuesday held Interior Secretary Gale Norton and a senior aide in contempt of court for deceiving him about the agency’s failure to reform a trust fund for Native Americans, echoing the contempt findings he made against a trio of Clinton administration officials in the same case three years ago.
U.S. District Court Judge Royce Lamberth said the Interior Department handled the case in the same manner as they managed hundreds of millions of dollars in royalties from Indian land: “disgracefully.” He found four instances where Norton and Neal McCaleb, assistant secretary for Indian affairs, had committed fraud on the court, and the judge also held them in contempt for failing to abide by a three-year old court order to begin major reform of the trust.
Lamberth’s rulings are the only ones in modern history to hold Cabinet-level officials in contempt of court. Former President Clinton’s treasury secretary, Robert Rubin, and interior secretary, Bruce Babbitt, also were held in contempt in 1999.
In Tuesday’s 267-page opinion, Lamberth said that at the end of the previous case, “I stated that ‘I have never seen more egregious misconduct by the federal government;’ now at the conclusion of the second contempt trial, I stand corrected. The Department of Interior has truly outdone itself this time.”
Elouise Cobell, a member of the Blackfeet Tribe and one of the original plaintiffs in the case, was elated by Lamberth’s ruling.
“We got ’em good this time,” Cobell said in a phone interview from Denver Tuesday evening. “This is a great decision. It was very encompassing and powerful.”
Cobell is optimistic that the judge’s strong stance will lead to a settlement for the trust beneficiaries. “I think it’s time that the American people are going to stand up and say, ‘Stop, you’ve got to settle this,'” Cobell said. “All of the American people should be appalled with the government’s behavior.”
Over a two-year period, the judge said the “fraudulent conduct” of Norton and McCaleb led him to believe that they were taking steps to fix what has become one of the worst accounting messes in U.S. history. In reality, Lamberth said, the agency has barely improved since the last contempt trial three years ago, and in the 18 months after the first trial did “virtually nothing” of what the court had ordered.
“The agency has indisputably proven to the court, Congress, and the individual Indian beneficiaries that it is either unwilling or unable to administer competently the trust,” Lamberth wrote.
“Worse yet, the department has now undeniably shown that it can no longer be trusted to state accurately the status of its trust reform efforts. In short, there is no longer any doubt that the secretary of Interior has been and continues to be an unfit trustee-delegate for the United States.”
The trust fund, called the Individual Indian Money trust, begun in 1887 when many Indian tribes were moved off 90 million acres of their land. At the time, they were granted royalties from the leasing of oil, mineral or access rights to a remaining 11 million acres.
This fund, now generating about $500 million per year to 300,000 shareholders, has been chronically mismanaged by the Interior Department.
Cobell and the Native American Trust Fund sued the government alleging mismanagement in 1996. The Indians say they are owed at least $10 billion in lost, stolen or inappropriately billed accounts. “We’re bringing home some accountability to the U.S. government,” Cobell said. “They have to conform to the same standards that other trustees have to … government corruption has got to stop.”
In December 1999, Lamberth ruled that the government was in breach of its fiduciary role as trustee in the Indian accounts. He ordered the program, complete with more than 12,000 backlogged probate cases, to be placed under his jurisdiction for five years so that he could ensure that Interior complied with his orders.
Tuesday the judge ruled that “the Individual Indian Money trust has served as the gold standard for mismanagement by the federal government for more than a century. As the trustee-delegate of the United States, the Secretary of the Interior does not know the precise number of IIM trust accounts she is to administer and protect, how much money is or should be in the trust, or even the proper balance for each account.”
He ordered the defendants to pay all costs, which Keith Harper, counsel for the plaintiffs, estimated at several million dollars.
The Interior Department did not immediately respond to the judge’s ruling. Norton had inherited many of the problems with the trust fund. During a 29-day trial that ended in late February, she asked Lamberth for more time to make fixes but the judge refused.
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