Interior Secretary Norton held in contempt

Wednesday, September 18, 2002

WASHINGTON -- Interior Secretary Gale Norton said she may appeal a judge's decision holding her in contempt of court for failing to fix her department's mismanagement of hundreds of millions of dollars of royalties from Indian land.

U.S. District Judge Royce Lamberth ruled Tuesday that Norton not only failed to comply with his order to account for the money in the Indian accounts but committed fraud by misrepresenting the department's efforts to repair the trust and protect Indian money.

"In my 15 years on the bench, I have never seen a litigant make such a concerted effort to subvert the truth-seeking function of the judicial process," Lamberth wrote. "The Department of Interior is truly an embarrassment to the federal government in general and the executive branch in particular."

Elouise Cobell, a member of the Blackfeet Nation, who led a group of Indians in suing the department in 1996 for squandering Indian money, praised Lamberth's ruling and said it should serve as a warning to Norton and her department.

Major problems with fund

"I prayed every day that this opinion would serve justice to the individual Indian beneficiaries. the ones who have been hurting for so long," Cobell said. "We are on the road to justice, and I'm happy for this opinion."

Norton is the third Cabinet officer that Lamberth has held in contempt over the trust fund. Former President Clinton's Interior Secretary Bruce Babbitt and Treasury Secretary Robert Rubin were found in contempt in 1999.

The government acknowledges major problems with the trust fund. The Interior Department has spent more than $600 million since 1996 to comply with instructions from both Congress and Lamberth, but accounting problems persist.

In December the judge shut down most of the Interior Department's Internet connections because he said the agency could not ensure hackers wouldn't break in and steal money.

During a 29-day trial that ended in late February, Norton asked Lamberth for more time to make fixes. Lamberth was unmoved.

Instead, he expanded the court's oversight of the trust reform efforts. He stopped short of stripping the department of its management responsibility and assigning it to an independent trust expert, although he said that remains an option.

He set a deadline of Jan. 6, 2003, for the department to submit plans for an accounting and overhaul of the trust fund and scheduled a trial for May 2003 to determine what other actions the court should take. Lamberth also ordered the government to pay the plaintiffs' attorneys fees.

Mismanagement of trust

Attorney Dennis Gingold said the fees would be in the millions of dollars. The Interior Department will pay the fees.

The contempt ruling also applies to the department's assistant secretary for Indian affairs, Neal McCaleb.

The trust, which now handles royalties from 11 million acres for about 300,000 American Indians, began in 1887 when Congress took 90 million acres from Indian tribes and gave the land to white homesteaders.

The Indians were left with allotments ranging from 40 acres to 320 acres, with the Interior Department assigned to manage grazing, timber and oil and gas drilling on the land. The department was to have ensured Indians received royalties for those activities.

For more than a century, an untold amount of money was lost, stolen or never collected. Indians sued in 1996, claiming the mismanagement cost them between $10 billion and $40 billion.

Lamberth ordered the department in 1999 to fix the system and piece together amounts that individual Indians are owed. He found Babbitt and Rubin in contempt and ordered the government to pay $600,000 of the plaintiffs' attorneys fees for failing to turn over documents in the case.

Rep. James Hansen, R-Utah, whose House Resources Committee oversees the Interior Department and Indian issues, said the ruling "flies in the face of the facts" and neglects progress that has been made under Norton's tenure.

"She inherited a trust management problem that has plagued the federal government for decades," Hansen said in a statement. "I personally believe this slap from the judge is patently unfair and deliberately disregards her excellent work."

Rep. Nick Rahall, D-W.Va., the senior Democrat on Hansen's committee, disagreed.

"While Secretary Norton inherited the long-standing problems with Indian trust fund management and the Cobell lawsuit itself, she has been found in contempt for actions taken on her own watch," he said in a statement. "If they were half as good at counting the bucks as they are at passing buck, we would be much better off."

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