Archive for Thursday, November 29, 2001

Interior Department officials ordered to stand trial in Indian trust fund case

November 29, 2001

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— A federal judge ordered Interior Secretary Gale Norton to stand trial Wednesday on contempt allegations related to a long-running lawsuit accusing her of mismanagement of a billion-dollar Indian trust fund.

U.S. District Judge Royce Lamberth set a trial date of Dec. 3 for Norton and Assistant Secretary of Indian Affairs Neal McCaleb to show why they should not be held in contempt.

The suit stems from the mismanagement of royalties from mining, grazing, timber harvesting and other activities on 54 million acres of Indian land held in trust by the Interior Department since 1887.

Payments were supposed to be made to the Indian beneficiaries, but much of the money was lost, misappropriated, stolen or never collected.

Specifically, Norton will have to show that her office has complied with Lamberth's 1999 order that the Interior Department piece together how much is owed to 300,000 Indians who sued the agency claiming it has squandered more than $10 billion in royalties during more than a century.

Norton also must prove that she did not file false or misleading reports about the status of the accounting and the department's current system of tracking the Indian royalties.

Dennis Gingold, the attorney for the Indians in the class action suit, praised Lamberth's decision to hold a trial.

"It confirms everything we've said about the unfitness of the Secretary of Interior to continue to manage the Indian trust," he said.

Hours before Lamberth acted, a department official told Indian leaders meeting in Spokane, Wash., that Norton would begin discussions with them in December about management of the trust fund

In 1999, Lamberth held former Interior Secretary Bruce Babbitt and former Treasury Secretary Robert Rubin in contempt and fined them $600,000 for failing to produce documents in the case.

At an Oct. 30 hearing, Lamberth scolded the Interior Department's lawyer and advised the lawyer to "throw yourself on the mercy of the court," rather than defend conduct he called "so clearly contemptuous."

Interior spokesman Eric Ruff said strides have been taken to improve the management of the trust fund and comply with court orders since Norton took office, including the creation of a new office specifically dedicated to trust fund management.

"Such progress is evidence of the department's commitment and determination to resolve the Indian trust issue," Ruff said in a statement.

Lamberth has scheduled a hearing for Friday to determine who may be needed to testify at the Dec. 3 contempt trial.

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