'Disgraceful' management of trust account, judge charges

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Gale A. Norton, department of the Interior secretary, and Neal McCaleb, assistant secretary for Indian affairs, were ruled to be in contempt of court by a federal court judge on Sept. 17.

U.S. District Court Judge Royce C. Lamberth is presiding over the Cobell case, a demand for an accounting of Indian monies held in trust. Saying Norton and McCaleb had committed fraud on the court in four different ways, the judge also held them in contempt for failing to observe a 1999 court order to begin major reforms of the trust.

The Individual Indian Money (IIM) trust was set up in 1887, a time when many tribes were moved off of about 90 million acres of their land. They were granted royalties from the leasing of oil, mineral or access rights to a remaining 11 million acres. Royalties were put into the IIM trust, which is now generating about $500 million (US) a year for approximately 300,000 shareholders.

In 1996, Elouise Cobell, treasurer of the Blackfeet tribe in Montana, sued the government saying the fund had been mismanaged. The lawsuit claims that at least $10 billion has been lost or stolen.

In his 267-page opinion, the judge Lamberth blistered the government for its actions in this case.

"The Department of Interior's administration of the Individual Indian Money (IIM) trust has served as the gold standard for mismanagement by the federal government for more than a century. As the trustee-delegate of the United States, the secretary of Interior does not know the precise number of IIM trust accounts that she is to administer and protect, how much money is or should be in the trust, or even the proper balance for each individual account," the judge wrote. "In fact, the Interior department cannot provide an accurate accounting to the majority of the estimated 300,000 trust beneficiaries, despite a clear statutory mandate and the century-old obligation to do so. As the court observed more than two years ago, 'it is fiscal and governmental irresponsibility in its purest form.'

"Equally troubling is the manner in which the department of Interior has conducted itself during the course of this litigation. In February 1999, the court held Bruce Babbitt, then-secretary of the Interior, and Kevin Gover, then-assistant secretary of Interior for Indian Affairs, in civil contempt for violating two of the court's discovery orders

"Among other things, the court found that almost immediately after proposing a clear and unambiguous order that the court signed, 'the defendants disobeyed that order and successfully covered up their disobedience through semantics and strained, unilateral, self-serving interpretations of their own duties.'"

The judge said the new Bush administration officials have carried on the same behavior.

"The defendants' misconduct did not end there. Since holding then-secretary Babbitt and then-assistant secretary Gover in contempt, the court has had to sanction the department of Interior for filing frivolous motions, enter several temporary restraining orders to prevent the department from taking potentially adverse actions, and appoint both a special master (to oversee discovery) and a court monitor (to review the defendants' trust related activities). Moreover, there are several motions currently pending before the court regarding alleged misconduct by the Interior department. In short, the department of Interior has handled this litigation the same way that it has managed the IIM trust-disgracefully," he wrote.

The decision is of interest to Native people in Canada as well. Six Nations of the Grand River First Nation in Ontario has a similar court case against the Canadian government. The band filed suit in 1995 asking for an accounting of its trust monies. Lawyers representing the band have said the government has tried to stall progress in this case as well. And the Samson Cree Nation and Ermineskin Cree Nation in Alberta are also suing Canada over what they allege is missing money in their oil an gas revenue accounts.