Interior chief, aide cited for contempt
Indian trust funds at stake in ruling from federal bench
The Arizona Republic
By: Billy House
Republic Washington Bureau
September 18, 2002
WASHINGTON – A federal judge on Tuesday cited Interior Secretary Gale Norton for contempt of court, saying that she and a top assistant have committed “fraud on the court” by concealing their agency’s lack of progress toward resolving the mismanagement of billions of dollars in trust funds held for American Indians.
The ruling raises the possibility that the department could be stripped of its trust-fund oversight and replaced by a court-appointed trust expert. But U.S. District Judge Royce Lamberth gave the Interior Department until early next year to come up with its own, improved management plan.
The ruling also appears to substantiate the claims of Thomas Slonaker of Payson, who claimed Norton forced him to quit in July as the special trustee in charge of the accounts because he would not go along with the department’s assertions that it was fixing the historically mismanaged trust system.
Slonaker said in an interview Tuesday that, more than vindicated, he feels “saddened for the Indian trust beneficiaries who have been struggling for so long to get what is owed to them.”
“I wish we were much further along,” he added.
In his 267-page opinion, Lamberth wrote: “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 (Indian) trusts.
“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.”
But Norton said she disagreed and was disappointed in the ruling. Though she would not comment on the citation’s specifics, Norton said it does not acknowledge that the administration has done more than previous administrations to resolve the management of the money.
Justice Department lawyers said the contempt ruling against Norton and Neil McCaleb, assistant secretary of Interior for Indian Affairs, may be appealed.
McCaleb said much of the citation referred to actions during the Clinton administration, but echoed Norton in saying that they have made great strides in working to clean up the trust situation. “We’re driving the truck now, so we’re going to get the ticket,” he said.
In fact, Lamberth also had previously cited former Interior Secretary Bruce Babbitt and former Treasury Secretary Robert Rubin for contempt in 1999, saying they had shown a “flagrant disregard for his orders.”
But in Tuesday’s ruling, Lamberth gave the Interior Department a Jan. 6, 2003, deadline to come up with a new, workable management plan for overseeing the money. Lamberth also warned that he has the authority to appoint an expert from outside the agency to manage the money if he is not satisfied. The government pumps $500 million a year into about 300,000 trust accounts, some of which date from 175 years ago, held by individual Indians. Most of the funds were set up to handle proceeds from the sales of natural resources on Indian lands. The Bureau of Indian Affairs continues to hold in trust about 11 million acres. Some valuable oil and gas leases pay thousands of dollars a month.
But Native Americans have discovered that the government has lost track of tens of thousands of beneficiaries, failed to pay them interest and couldn’t even tell them how much money they were due. A lawsuit filed in 1996 by five Native Americans is now seeking a full accounting and overhaul of the system.
In all, 250,000 to 300,000 individuals, including those living in Arizona within the Navajo Nation, the Salt River Pima-Maricopa Indian Community and the Tohono-O’odham Nation, stand to benefit from a full accounting of the trust funds, John Dossett, general counsel for the National Congress of American Indians, has said.
Keith Harper, a lawyer with the Native American Rights Fund, said the judge’s contempt order Tuesday gives him and other lawyers for trust fund beneficiaries the opportunity to come up with a plan or recommendations for how the funds can be fixed, and to suggest during a trial-like proceeding scheduled for May 1, 2003, other remedies for resolving the lawsuit.
Hopi Chairman Wayne Taylor said the tribe’s Peabody Coal Mine funds are part of the trusts.
“The pressure of the court case has been prompting this administration to move forward,” Taylor said.
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