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Interior Secretary Is Held in Contempt Over Indian Fund

Court: Judge says Norton is 'unfit,' assails her for not fixing a problem with royalty payments.


WASHINGTON — A federal judge on Tuesday called Interior Secretary Gale A. Norton an "unfit" government representative and held her in contempt for failing to follow his order to fix the system that has deprived Native Americans of billions of dollars in royalties.

Norton has acknowledged major problems with the trust fund, which was established in 1887 to manage mineral and timber development on lands apportioned to individual Indians and distribute royalties from them.

But in his 267-page opinion, U.S. District Judge Royce Lamberth declared her effort to solve them a "deceitful and disingenuous" failure.

"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 ... trust," Lamberth wrote.

"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 the Interior has been and continues to be an unfit trustee-delegate for the United States," Lamberth added.

The Justice Department, which is arguing the case for the Interior Department, disagreed with Lamberth's decision. "We ... are evaluating it to consider all the options for appeal," said Robert D. McCallum Jr., assistant attorney general in charge of the civil division.

The trust collects oil, gas, coal, timber and grazing royalties from more than 11 millions acres of land west of the Mississippi River for about 300,000 Indians.

Government officials decided to take control of these funds more than a century ago because they feared the Indians would squander the money.

In an effort to distribute the funds to their rightful owners, Lamberth appointed a "master monitor" to oversee the department's efforts to account for the funds. He also ordered Norton to come up with a plan to fix the system by January and scheduled a trial for May to determine how to conduct an accounting of the government's debts to individual Indians.

The judge also told the department to cover legal fees for the case.

Norton inherited the problems from the Clinton administration, whose Interior and Treasury secretaries, Bruce Babbitt and Robert E. Rubin, were also held in contempt by Lamberth for failing to make good on the debt to Native Americans.

Babbitt and Rubin were not punished personally and neither has Norton.

Lamberth found four specific instances of fraud committed by the Interior Department. In one, he charged that the department pretended to gather information about how to do a historical accounting of the money owed the individual trustees.

In fact, he said, the department always intended to account for the funds through a statistical sampling.

Lamberth called it an "unconscionable scheme" and criticized the department's lawyers for playing a key role in it.

"The court is very disappointed that attorneys, particularly those that worked for the government, would engage in such subterfuge," he said.

The plaintiffs were ecstatic about the ruling and expressed confidence that the department would have to give them a much greater say in the resolution of this decades-old fiasco.

The lead attorney for the plaintiffs, Dennis Gingold, said he believed the strict timeline in the judge's decision set the stage for payments to the beneficiaries as early as next year.

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