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Judge Holds Interior Secretary in Contempt Over Indian Trust

John J. Fialka, Staff Reporter
The Wall Street Journal, September 18, 2002

WASHINGTON -- A federal judge here held Interior Secretary Gail Norton and another agency official in contempt of court for what he termed a continuing failure to reform the error-prone trust-fund system that handles more than $300 million a year for individual Indians.

Judge Royce C. Lamberth indicated that his next action may be to take over the trust fund by putting it under a court-appointed receiver. He asserted that the Department of Interior's reform effort is only "marginally closer" to its objective than it was three years ago, when he held Ms. Norton's predecessor, Bruce Babbitt, in contempt.

In a frequently scathing 267-page opinion, Judge Lamberth asserted that Ms. Norton had followed a series of practices to mislead the court that he traced back to Mr. Babbitt. He added that Ms. Norton didn't change course until the plaintiffs in the class-action lawsuit moved to cite her for contempt.

The judge's ruling finds Ms. Norton and Neal McCaleb, assistant secretary for Indian Affairs, in civil contempt. The move doesn't carry criminal penalties, but it requires the government to pay legal fees for the Indians' lawyers. In an accompanying order, the judge said he also will hold a trial over what accounting system will be used to measure trust-fund losses, a matter that had been previously left to the Interior to decide.

Robert D. McCallum Jr., an assistant attorney general of the Justice Department, which is defending Interior, argued that the facts in the case don't justify contempt against Ms. Norton or Mr. McCaleb. Justice, he said, is considering "all of the options for appeal."

Rep. J.D. Hayworth (R. Ariz.), who is co-chairman of a congressional caucus on Indian matters, called the findings "unfair."

"To subject Secretary Norton to this sort of judicial jawboning is unnecessary," he said, asserting that Ms. Norton was "devoting extraordinary attention" to the reform effort.

The trust fund was created in the 1800s by Congress to help Indians who owned individual plots of land keep track of their income from grazing leases, mining and other outside uses. Because there were no banks on reservations, the system grew to more than 300,000 individual accounts.

Since 1996, plaintiffs have been suing for an accounting of the funds, which are kept in the U.S. Treasury, asserting that thousands of records are missing, damaged, tampered with or destroyed. Dennis Gingold, lead attorney for the Indian plaintiffs, said they are prepared to use a historical accounting system to show more than $100 billion in losses and resulting damages.

Earlier, after holding Mr. Babbitt in civil contempt, Judge Lamberth concluded that he had never seen "more egregious misconduct by the federal government." In Tuesday's phone-book-size opinion, he corrected himself. "The Department of Interior has truly outdone itself this time."

John J. Fialka, Staff Reporter
Judge Holds Interior Secretary in Contempt Over Indian Trust
The Wall Street Journal, September 18, 2002

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