Judge slams Interior Secretary over American Indian funds

WASHINGTON — A federal judge Tuesday held Interior Secretary Gale Norton in contempt for failing to heed his order to fix oversight problems with a trust handling hundreds of millions of dollars in royalties from Indian land.

U.S. District Judge Royce Lamberth called the department's handling of the Indian money and the action of government attorneys in the case disgraceful, and found four specific instances where the department committed fraud on the court.

Norton is the third Cabinet officer that Lamberth has held in contempt over the trust fund. Former President Bill Clinton's Interior Secretary Bruce Babbitt and Treasury Secretary Robert Rubin were held in contempt in the case in 1999.

The government has acknowledged major problems with the trust fund. The Interior Department has spent more than $600 million since 1996 to comply with instructions from both Congress and Lamberth, but accounting problems persist.

In December the judge shut down most of the Interior Department's Internet connections because he said the agency could not ensure hackers wouldn't break in and steal money.

Norton inherited many of the problems with the trust fund. During a 29-day trial that ended in late February, she asked Lamberth for more time to make fixes. Lamberth was unmoved. On several occasions during the trial and since it concluded, he scolded Interior officials for foot-dragging and failure to comply with his orders.

In a 267-page opinion, the judge said the Interior Department not only failed to comply with his order to account for the money in the Indian accounts but lied to the court about its efforts to repair the trust and protect Indian money.

"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 (Indian) 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 Interior has been and continues to be an unfit trustee-delegate for the United States."

The contempt ruling also applies to Assistant Secretary for Indian Affairs Neal A. McCaleb.

The Interior Department did not immediately respond to the judge's ruling.