Trust fund accounting tests federal judge

FROM THE ARCHIVE

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WEDNESDAY, MARCH 13, 2002

A federal judge has accepted Secretary of Interior Gale Norton's request to drop historical accounting arguments made during the Clinton administration but questioned the government's truthfulness on the controversial matter.

In an order signed last week and filed in federal court on Monday, U.S. District Judge Royce Lamberth gave permission for Norton's current legal team to withdraw three motions affecting the scope of the historical accounting. Citing significant "developments," the attorneys claimed the Bush administration no longer wanted to limit its obligations to 300,000 American Indians who still don't know if their trust account balances are correct.

But Lamberth didn't buy their explanation. Although he agreed to drop the arguments, he doubted why they were advanced at all.

"While the court disagrees with defendants' contention that intervening matters have made it appropriate to withdraw these motions (since that position presupposes that the motions were appropriate in the first instance), it will nonetheless grant defendants leave to withdraw the motions," he wrote on March 8.

The decision highlights a particularly troublesome area of a case that has dragged on more than five years. Although charged by federal law and ordered by Lamberth's court to do so, the Department of Interior has failed to start an accounting of the Individual Indian Money (IIM) trust.

Yet both the Clinton and Bush administrations have resisted the effort, albeit to different degrees. Norton's former defense team -- whom she fired last October -- only wanted to examine trust records dating back to 1994, or alternatively, to the 1950s.

Norton's Office of Historical Trust Accounting (OHTA) has widened its scope but not by much. Even though the IIM trust was created in 1887, the department is looking back to "at least" 1938, according to a court document filed last month.

The obstinance has tested Lamberth's patience. In the order filed this week, he took Norton's attorneys to task for not recognizing his December 1999 ruling on the accounting and warned that the government's behavior "will remain part of the record" in the case.

A 1994 trust reform law, Lamberth wrote, "requires defendants to provide plaintiffs an accurate accounting of all money in the IIM trust held in trust for benefit of plaintiffs, without regard to when the funds were deposited."

The order also speaks to Lamberth's forthcoming finding in Norton's contempt trial. Of the five charges she and Assistant Secretary Neal McCaleb face, two are related directly to the failure to provide an accounting to the Indian beneficiaries.

A finding is expected in the coming weeks. Fines and potential jail time have been requested by attorneys representing the account holders.

The OHTA is expected to release a plan for a plan for the accounting in June. The office has asked third-party accounting firms for assistance and intends to award a three-year contract for the effort.

Relevant Documents:
Historical Accounting Memorandum and Order (3/11)

Relevant Links:
Indian Trust, Department of Interior - http://www.doi.gov/indiantrust
Indian Trust: Cobell v. Norton - http://www.indiantrust.com
Trust Reform, NCAI - http://130.94.214.68/main/pages/
issues/other_issues/trust_reform.asp