Trust fund office sought at Treasury Department

FROM THE ARCHIVE

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WEDNESDAY, SEPTEMBER 19, 2001

Despite numerous steps taken by the Department of Treasury to improve its handling of the trust fund lawsuit, the agency should create an independent office to make sure it doesn't destroy documents affecting an estimated 300,000 American Indians throughout the country, a court investigator has concluded.

In a final report released last week, special master Alan Balaran commends the department for its "overwhelmingly positive response" to problems a federal court overseeing the Cobell v. Norton lawsuit has identified. Training sessions, meetings, special directives and various e-mails and internal memoranda have documented the Treasury's efforts, said Balaran.

But while Balaran concedes the system is no longer "out of control" as he opined in December 1999, he adds that the department will "never be able to guarantee that it is, in fact, protecting the universe of IIM records" since document destruction has occurred at the Federal Reserve. The Reserve is an independent agency that provides services to the Treasury but is not a party to the Cobell lawsuit.

Balaran's report appears to close a chapter in what the Treasury itself has called a "deeply embarrassing" incident. In 1999, employees at a facility in Maryland destroyed 162 boxes of documents related to the Individual Indian Money (IIM) accounts at the heart of the lawsuit.

Yet even though Treasury attorneys knew of the destruction almost as soon as it happened, the department did not disclose it to a federal court until months later. U.S. District Judge Royce Lamberth had already fined Secretary Robert Rubin and other ex-Clinton administration officials for failing to produce documents related to the case and the revelation of the mass destruction only added fuel to the fire.

To prevent the situation from happening again, the Treasury has taken a number of actions, which Balaran details in his report. But the Indian plaintiffs voiced objections when they discovered there was only light punishment for the lawyers involved in the coverup.

And although Lamberth has ordered all documents preserved, there have been reports of additional destruction at the Federal Reserve. To correct these, the Treasury had to issue a special directive to Reserve banks and branches, of which at least 29 have reported destroying records.

Due to this relationship, Balaran has expressed misgivings about the Treasury's abilities to protect IIM documents. The establishment of a "compliance officer" who will report quarterly to court will prevent mass destruction from occurring again, he said.

The departments of Interior and Treasury are already providing quarterly reports to Lamberth. The Interior, however, has failed to provide its latest update despite claiming progress under the leadership of Secretary Gale Norton.

The report is now more than two weeks overdue as government lawyers seek to delay its submission until early next month. Interior officials contacted yesterday had no indication of the status of the report.

Department of Treasury officials did not return calls for comment. Of the six lawyers involved in the destruction scandal, two have left the department while the others remain employed.

Get the Final Report:
FINAL REPORT OF THE SPECIAL MASTERREGARDING THE DELAYED DISCLOSURE OF THE DESTRUCTION OFUNCURRENT CHECK RECORDS MAINTAINED BYTHE DEPARTMENT OF THE TREASURY (9/14)

Relevant Links:
The Department of Treasury - http://www.ustreas.gov
Indian Trust: Cobell v. Norton - http://www.indiantrust.com