WASHINGTON — A federal appeals court on Friday threw out a contempt citation against Interior Secretary Gale A. Norton in connection with her handling of a trust fund containing royalties for Native Americans.
In September, U.S. District Judge Royce Lamberth cited Norton for failing to take court-ordered steps to fix the 116-year-old system for managing mineral and timber royalties on lands assigned by the government to individual Indians.
But the U.S. Court of Appeals for the District of Columbia Circuit found that Lamberth had erred in his application of the law, in part because he held Norton in contempt for actions that largely occurred before she took office.
"Because Secretary Norton cannot be held criminally liable for contempt based upon the conduct of her predecessor in office, her contempt conviction cannot stand," the three-judge panel said in a unanimous ruling.
The ruling stemmed from a 1996 lawsuit filed by Elouise Pepion Cobell and four other named plaintiffs on behalf of hundreds of thousands of Indians they say have been deprived of billions of dollars through the decades because of mismanagement of the trust fund and fraud.
In its ruling, the appeals court did not challenge the ongoing case before Lamberth that is expected to decide how the government must proceed in conducting an accounting of the trust fund and in reforming the system.
The appeals court also dismissed a monitor who had been appointed by the district court in 2001 to oversee Interior Department efforts to reform the trust fund. The department had objected to the appointment.
"In this case, the district court's appointment of the monitor entailed a license to intrude into the internal affairs of the department, which simply is not permissible under our adversarial system of justice, and our constitutional system of separated powers," the appeals court stated.
The Bush administration said the appeals court decision vindicated Norton and would allow the department to direct more of its attention on reforming the royalty system, which was established in 1887.
"This ruling today is a victory for the American Indians and Alaskan Natives we serve," said Dan DuBray, a spokesman for the Interior Department. "Now, the department is focused not on the scorched-earth tactics of the plaintiffs' attorneys but on the real work that needs to be done."
A lawyer for plaintiffs in the case minimized the importance of the ruling.
"All this does is get the fraud off the back of the secretary," said Dennis Gingold. The ruling reinforces the plaintiffs' larger case, he added.
The Interior Department and the plaintiffs have widely different opinions about how the accounting of the trust fund should be conducted and how the system should work in the future. For instance, the plaintiffs want a thorough study of every account that has existed since 1887. The department argues that it should be required to conduct only a more limited investigation of accounts that were open as of 1994.
Also, the plaintiffs want an independent receiver to manage the trust fund, but Norton wants the Interior Department to retain control.
Threatened with a contempt ruling, Norton and other top department officials had spent much time and energy focused on the Indian trust fund issue since taking office.
Members of Congress stressed that the court's ruling should not give the Interior Department an excuse to put the problem on the back burner.
Senate Minority Leader Tom Daschle (D-S.D.) said that "it is long past time to correct the federal government's shameful mismanagement of Indian trust assets."
"It is regrettable," Daschle said, "that the Interior Department seems to be more concerned about fighting for themselves than in fighting for Native Americans."