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Treasury must open records

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WASHINGTON, D.C. - U.S. Judge Royce Lamberth ordered that Department of Treasury documents relating to the trust fund lawsuit be opened and accountable to the public about late, misleading or false reports to the court.

Treasury had asked that the documents regarding an internal investigation be sealed, and plaintiffs in the Cobell vs. Norton lawsuit, with intervention from Dow Jones & Co., owners of the Wall Street Journal, filed motions opposing Treasury's request.

"Here we go again," said Elouise Cobell, lead plaintiff in the individual American Indian trust litigation. "This is exactly what we have been saying for years. The government's answer to court orders and congressional directives has been evasion, cover-up, destruction and delay. Today's ruling is another 2-by-4 between the eyes."

At the heart of the matter is untimely disclosure of the destruction of check records maintained by Treasury. Six lawyers were accused of failing to keep themselves informed of court orders, the main Treasury office took two years to be part of the proceedings and then did not actively search for documents and there were false and misleading representations to the court.

The documents Treasury wanted sealed were results of a panel report its actions in the case, as found by a special Cobell Panel, a letter to each of the counsel about their conduct and an analyzed report of professional model conduct.

The opened documents stated the lawyers did not knowingly conceal destruction of 162 boxes of potential evidence and destroy e-mail records as implied in court records.

"I find no evidence that any of the attorneys, individually or collectively, sought to withhold information from the Justice Department, the court or opposing counsel in order to achieve an advantage (or perceived advantage) in the litigation," said the letter signed by John E. Donoghue, deputy general counsel of the Department of the Treasury.

Treasury argued that the documents contained sensitive personnel issues. The attorneys in question went on record approving opening the documents.

Dennis Gingold, an attorney representing Cobell and thousand of plaintiffs, said the report was a whitewash to cover malfeasance by former high-ranking Treasury officials.

"The public's interest in being afforded access to the sealed documents can not be overstated," Judge Lamberth stated in his opinion.

The court ordered the Special Master to investigate circumstances that followed destruction of check documents. The investigative report found the six attorneys were complicit in not reporting the incident to the court in a timely manner.

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"This system is out of control," stated Alan Balaran, Special Master appointed by the court. In his report he wrote that the attorneys who did not notify the court violated professional ethics and were part of a "pattern of obfuscation" in the case.

The question for the court was whether the conduct of the government attorneys was part of "institutional shortcomings" and whether the government made any efforts to resolve the problems, including disciplinary procedures against the attorneys.

Lamberth said public confidence in government officials and in attorneys who are officers of the court is weakened by such actions. He added that concealing the efforts to correct the actions of the attorneys would only serve to further erode public confidence.

The records were ordered opened in the public interest, which Lamberth said outweighed any confidentiality interest of the Treasury. He said the public has a right to know what disciplinary actions were taken against the attorneys.

"Neither (Treasury or the Department of Interior) has provided any report whatsoever - under seal or otherwise - demonstrating that they have held any attorney accountable in any way whatsoever for any misconduct in this litigation," Lamberth stated.

Donoghue said in his letter to the court that the root cause of the delay in notification to the court and the plaintiffs' counsel was poor communication between the senior attorneys. He added that when it was discovered the documents were shredded, attorneys from the Financial Management System notified Banking and File attorneys of the problem. It wasn't until months later that Treasury notified the court of the mishap, which Donoghue said was troubling.

The attorneys will be schooled in better communications skills and will be subject to a mentoring program as part of professional development, Donoghue wrote in an Oct. 25, 2000, letter to the attorneys.

In late 1999, the government was ordered to reconstruct the trust fund accounts and reform the Individual Indian Money account system. Criticism by the Special Master began shortly after that and the 162 boxes of documents were destroyed in Hyattsville, Md., sometime before Jan. 28, 1999.

The class-action suit against the government for misapplying billions of dollars in individual trust fund monies is more than five years old. The trust fund accounts were created in 1887 to manage the lease payments to American Indian landowners for oil and gas production, grazing, logging and mining.

Plaintiffs in the case claim the money is lost or misapplied, but the government said it was only a matter of shoddy accounting and that the billions of dollars were not misspent or lost.

Two critical reports have been issued by the Special Master of late. The most recent report claims a $40 million computer accounting system does not work and the other report argues the government has not done anything to reconstruct the accounts.