26 February 2005

Federal Judge Orders Interior Dept to Fix Trust

How many times will they have to be told?


Judge Again Orders Indian Trust Fund Action
Seeing no progress in the long-running case, the jurist tells the Interior Department to account for billions in royalties tribes say they are owed.

By Henry Weinstein
Times Staff Writer
February 24, 2005

WASHINGTON — For the second time, a federal judge has ordered the Interior Department to account for billions of dollars in royalties that Indian tribes contend the government owes them.

The ruling Wednesday by U.S. District Judge Royce C. Lamberth came in the long-running case of the Indian trust fund, which was established more than a century ago to hold and distribute fees from oil, grazing, drilling and logging leases on 11 million acres of land west of the Mississippi River.

Lamberth told the department to return within 60 days with a detailed plan for a historical accounting of the trust.

He also ordered the department to issue subpoenas for records held by third parties to make sure those records would be preserved. The subpoenas would go to oil companies, timber firms and other companies that have done business on Indian land.

According to government reports, the trust fund has been plagued with problems since at least 1915. When the fund was set up in 1887, the government — saying it feared that the Indians would squander the money — took control of the royalty payments.

The fund is believed to generate about $500 million a year on behalf of more than 300,000 individuals, though lost or mismanaged records over the decades have made a complete accounting almost impossible.
Wednesday's ruling is the latest of many in which Lamberth has blasted the conduct of government officials, Democrat and Republican, for the way they have treated the Indians and responded to the lawsuit. It was filed by a group of Indians in 1996, two years after Congress ordered the Interior Department to account for the way the fund had been managed.

Lamberth has held several government officials in contempt for failing to turn over documents, including Bruce Babbitt, secretary of the Interior during the Clinton administration. In September 2002, Lamberth held Interior Secretary Gale A. Norton in contempt for failing to follow court orders, but that ruling was overturned on appeal 10 months later.

In his order Wednesday, Lamberth noted that elderly potential beneficiaries of the trust were dying "as the government fights — and refights — every legal battle."

"In this case, the government has not only set the gold standard for mismanagement, it is on the verge of setting the gold standard for arrogance in litigation strategy and tactics," he wrote.

Lamberth initially ordered a historical accounting in September 2003, giving the department four years to comply. The accounting, he said, would be used in a future trial to ascertain how much the federal government owes hundreds of thousands of Indians.

Government officials balked, saying it would cost about $335 million and take five years to complete even a rough accounting. Interior Department officials said it could cost up to $12 billion to do the comprehensive accounting Lamberth sought.

Members of Congress were unwilling to foot the bill for even the abbreviated accounting. In November 2003, hoping to buy time to develop a solution, lawmakers gave the department a moratorium on the work until Dec. 31, 2004.

On Dec. 10, the U.S. Court of Appeals for the District of Columbia vacated part of Lamberth's 2003 decision, saying it had no "legal basis'' while the moratorium legislation remained in effect.

The appeals court said Lamberth "may not micromanage court-ordered reform efforts and then subject defendants to findings of contempt for failure to implement such reforms.''

On Wednesday, Lamberth emphasized that "Dec. 31, 2004, has come and gone, and no legislative solution to the issues in this litigation is available or in the offing."

Consequently, he said, he was bound by the findings he made earlier and reissued the "historical accounting provisions" of his initial order. He emphasized that the appeals court had not contested the findings of fact and conclusions of law upon which his September 2003 ruling had been based.

Wednesday's ruling requires that the first phase of the accounting be completed by January and that the entire project be finished by January 2009. The Interior Department must "account for all assets held by the trust" since 1887, he said.

Dennis M. Gingold, the lead lawyer for the plaintiffs in the case, called Lamberth's action significant. "The judge has taken a bold step to resolve the case on the merits," he said.

"The judge is trying to get the case back on track," said Gingold's co-counsel, Keith Harper of the Native American Rights Fund. When Congress halted the accounting work in 2003, "it just put off the inevitable," Harper said.

In addition, Lamberth called a status conference for next week to discuss several outstanding issues in the case, including possible contempt charges against several government officials.

Further complicating the situation, the government's lead lawyer, Sandra Spooner of the Justice Department, formally withdrew from the case on Wednesday, as did two of her colleagues.

Interior spokesman Dan DuBray said the department was reviewing the ruling with Justice Department lawyers, but declined further comment.

Last week, James E. Cason, associate deputy secretary of the Interior Department, told the House Resources Committee that the department had spent nearly $3 billion on trust management reform during the last decade but did not have a plan to resolve the thorny issue.
Harper of the Native American Rights Fund told the committee that so many records had been lost that he doubted that an accurate accounting could be completed.

At that hearing, Rep. Richard W. Pombo (R-Tracy) expressed dismay at the prospect of the case dragging on. An aide said Wednesday that Pombo would introduce legislation this spring in an effort to resolve the problem.


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