Judge lambastes Interior chief, aide over trust accounts
by Bill McAllister
Denver Post Washington Bureau Chief
The Denver Post
WASHINGTON – Interior Secretary Gale Norton and a top aide were found guilty of four counts of civil contempt Tuesday by a federal judge who held they had committed “a fraud on the court” by withholding evidence in a dispute over trust accounts held for American Indians.
In a stinging opinion, U.S. District Judge Royce C. Lamberth declared “there is no doubt” that Norton is unfit to serve as the government’s trustee for the Indians. She “does not know the precise number of … trust accounts that she is to administer and protect, how much money should be in the trust or even the proper balance for each individual account,” the judge said.
Many of the trust accounts were established more than 100 years ago to hold proceeds from leasing of Indian lands in the West for oil, gas and mineral exploration. But the records needed to verify the balances in the more than 300,000 accounts held for individual Indians have been lost for decades, prompting claims that as much as $10 billion may be missing.
Clinton era interior secretary Bruce Babbitt, an aide and Treasury Secretary Robert Rubin were each found guilty of single charges of contempt three years ago in the same case.
Norton couldn’t be reached for comment. A Justice Department spokesman said the government would consider an appeal.
Lamberth said the Interior Department failed to follow his orders for a full historical accounting of the trusts, seeking instead a statistical sampling. And he said Norton and her aides sought to hide problems with a computer system meant to improve accounting.
Norton, a former Colorado attorney general, and Neal McCaleb, assistant interior secretary for Indian affairs, could face heavy fines and even jail time for their roles in what the judge said “has served as the gold standard for mismanagement by the federal government for more than a century.”
Lamberth will set penalties at a later date. Dennis Gingold, a former Denver lawyer who had pressed for the contempt case, said the fines could be in the millions and that he would seek jail sentences that could run as long as 180 days. Norton looks “good in orange,” Gingold said. It is extremely unlikely, however, that Norton would be jailed. The Clinton officials only paid fines.
With the ruling, Norton became the first member of the Bush Cabinet to be disciplined by a federal judge for misconduct in office. As a practical matter, the judge’s action may have more consequences for her as a lawyer than as a political figure.
Babbitt, his Indian affairs director, aide Kevin Gover and Rubin stayed in office after being fined three years ago.
The ever-combative Gingold said, however, that he would bring the issue of Norton’s conviction before the Colorado Bar.
“If she is found not to be fit to be a trustee, is she not fit to be a lawyer?” he asked.
Denver political consultant Eric Sondermann said the contempt citation will surprise many in Colorado because it contradicts Norton’s image.
“If you were to ask me two words to describe Gale Norton, it would be ‘straight arrow,”‘ Sondermann said. “It can’t be a pleasant day for her because it contradicts the image she’s worked hard and meticulously to craft for herself.”
Norton, who was cleared of wrongdoing in a recent Interior Department investigation of separate trust issues, was in Phoenix at an Indian conference. She did not respond to requests for a comment.
Her department issued a joint statement with the Justice Department, quoting Assistant Attorney General Robert McCallum Jr.
“We disagree with the court’s decision and are evaluating it to consider all of the options for appeal,” he said.
Several Republican lawmakers rushed to praise Norton’s work on trust issues and to fault the judge. Rep. J.D. Hayworth, R-Ariz., a co-chair of the Congressional Native American Caucus, called the ruling “misdirected, unfair and untimely.”
House Resources Committee Chairman James V. Hansen, R-Utah, said it “flies in the face of the facts.” Both Hansen and Hayworth said Norton inherited a corrupt system that Democrats had been unable to fix.
Eloise Cobell, a member of Montana’s Blackfeet tribe and the lead plaintiff in a 6-year-old lawsuit, expressed delight at the ruling.
“I think it’s a great victory for us,” she said in Denver. “It’s about time the judge came down hard on people pretending to be trustees.”
Lamberth, an appointee of Ronald Reagan who has repeatedly criticized the government’s handling of the accounts, was clearly frustrated at his inability to force the Interior Department to move more rapidly.
“I may have life tenure, but at the rate the Department of Interior is progressing, that is not a long enough appointment,” he said.
In his 267-page opinion, the judge rejected calls that he place the trust operations in receivership. Instead, Lamberth said, hw would name a special master to monitor Interior’s progress.
The judge laced his ruling with statements on how he had been misled by Norton and the department about progress in resolving the trust accounts’ problems.
“In reality … the agency is still only at best marginally closer to discharging its fiduciary obligations properly than it was three years ago,” he said.
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