Trust Fund decision: endgame for Interior?


Once again the United States of America is reminded of its disgrace, via its Department of Interior, for how it has historically bungled trust assets belonging to American Indian people. Interior Secretary Gale Norton and Assistant Secretary for Indian Affairs Neal McCaleb are held "in contempt" by a federal court exasperated over the department's seeming inability to fix the fiasco of hundreds of millions of dollars, perhaps several billion, in missing Indian account funds. And once again, the question comes up: can the same department that messed it up, fix it up?

U.S. District Judge Royce Lamberth has cited members of a president's cabinet before (Clinton era Treasury Secretary Robert Rubin and Interior Secretary, Bruce Babbitt) and also former BIA Assistant Secretary Kevin Gover. Lamberth is clearly angered by the whole affair, and particularly about being misled and put off in a case that would appear to find no just solution, at least not in Interior's bureaucratic fold. Lamberth found Secretary Norton and Assistant Secretary McCaleb had committed 4 counts of fraud and had engaged in litigation misconduct for "failing to initiate the accounting ordered by this court."

The Sept. 17 decision follows years of litigation. The Interior Department has spent more than 0 million since 1996 to meet instructions from both Congress and Lamberth on how to fix the problems, but accounting difficulties persist. The whole history of this case has traveled a pathway of disrespect and disregard. Last December, Judge Lamberth shut down most of Interior's Internet connections, after an investigator was able to hack into its system and access agency accounts. It is said that its computer system password was an abbreviation of the word password. In that instance, Interior appeared to go way overboard by shutting down so many systems that it created long delays in payments meant for Native families.

The trust handles funds for about 300,000 American Indian people. It began to handle Indian finances in 1887 when Congress arbitrarily confiscated 90 million acres from Indian tribes and distributed the Indian land to white homesteaders. Indian families were left with allotments ranging from 40 acres to 320 acres. Interior was assigned to manage oil and gas drilling, grazing and timber on those lands. It was charged with insuring that Indian people received royalties from their remaining assets. A century of mismanagement has resulted in the loss of an untold amount of money meant for residents of some of the nation's poorest communities. The money was lost, swindled or never collected. Affected Indian people sued in 1996, claiming a loss of between billion and billion.

In an exclusive interview with Indian Country Today editors on Sept. 9, Secretary Norton pointed out the horrendous fractionated heirship policy the federal government imposed on tribes through the 20th century. She cited the bookkeeping nightmares that the perpetual forced subdivision of Indian family homesteads has caused. The secretary was right that far. Fractionated heirship is a quagmire of interference in American Indian family independence. But it is simply one more of the many headaches imposed by federal policies and laws. Responsibility for fixing the hundred-year-old problem of lost accounts is another thing, and someone in the federal bureaucracy certainly needs to take responsibility for this quintessential Indian case. As the case is now on Secretary Norton's watch, it is clearly her turn.

According the Lamberth's opinion, the secretary failed to heed Lamberth's request to be forthright in fixing the oversight problems with the department's handling of royalties from Indian land. The court lambasted both her and her department's grasp of its responsibility for managing the Indian funds, finding the evasive, rather than goodwill, action of government attorneys in the case disgraceful. In his strongly-worded opinion, Lamberth accuses the Interior Department of lying to him about progress in repairing the trust. "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.

"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."

Norton's best effort to overhaul the management of the trust funds hit a snag recently when the task force of tribal leaders she gathered to advise on the issue demanded that a panel outside the Interior Department supervise the department's management of the money. Interior balked at providing the proposed panel any powers, resisted the establishment of guiding principles, and accepted Justice Department rejections of tribal initiatives. There is little chance of accomplishing any reforms within the 107th Congress and most solutions appear to be headed in the direction of moving the whole fiasco out of Interior's supervision.

Lamberth directly warned Interior that he can authorize a shift of management on Indian funds. By putting the case in "receivership" Lamberth could oversee a clean analysis and solution-oriented initiative on the most shameful and horrendous of government boondoggle history.

The time is nearing for such independent action on this traumatic case.