Norton cited for contempt in Indian case

WASHINGTON, Sept. 17 (UPI) -- A federal judge held Interior Secretary Gale Norton and a top aide in contempt Tuesday for their management of the Indian trust fund and their alleged lack of cooperation in a civil lawsuit.

The action was nothing new -- Interior secretaries in the Reagan and Clinton administrations were also cited for their response to the same civil suit challenging the government's management.

In a memorandum accompanying his contempt order, U.S. Judge Royce Lamberth said the "Department of Interior has handled this litigation the same way it has managed the (trust fund) -- disgracefully."

Lamberth said Norton and Neal McCaleb, assistant secretary for Indian affairs, committed a "fraud on the court" by submitting "false and misleading" quarterly reports on the fund.

At issue in the case is the government's handling of hundreds of millions of dollars in royalties from land held in trust for the tribes. Interior is supposed to administer the trusts and distribute the money.

A federal appeals court ruled last year that the "federal government does not know the precise number of (Individual Indian Money) trust accounts that it is to administer and protect. At present, the Interior Department's system contains over 300,000 covering an estimated 11 million acres, but the department is unsure whether this is the proper number of accounts."

Not only does it not know the proper number, the appeals court ruled, Interior also "does not know the proper balances for each IIM account, nor does Interior have sufficient records to determine the value of IIM accounts."

As a result, "the government regularly issues payments to trust beneficiaries in erroneous amounts -- from unreconciled accounts -- some of which are known to have incorrect balances."

In his contempt order Tuesday, Lamberth sets a May 1 trial date for further action against the government resulting from the contempt citation, and orders the Interior Department once again to secure the trust fund records and come up with new standards for administering the funds, as well as a historical accounting of the funds.

Lamberth also orders Norton and McCaleb to show cause why they should not be cited for additional civil contempt for allegedly destroying e-mail involving the case.

The case has been a rocky one for the government.

In 1999, a special master appointed by Lamberth found that officials destroyed 162 boxes of materials relevant to the case and then tried to cover it up.

Interior devotes a Web page to the trust fund reports at doi.gov/indiantrust/.

On the Web page, Interior officials say they are doing their best to reform the system and are consulting with tribal members on how to do so.

There was no immediate word on whether the government would appeal Tuesday's contempt citation.