McCaleb to leave BIA amid trust fund upheaval

FRIDAY, NOVEMBER 22, 2002

RETIRING: Assistant Secretary Neal McCaleb at main Department of Interior in Washington, D.C. November 21, 2002.

Citing an increasingly "contentious and litigious environment," Neal McCaleb on Thursday announced he was resigning from his post as head of the Bureau of Indian Affairs.

McCaleb, 67, joined the Bush administration in July 2001 with the hopes of improving economic opportunities for American Indians and Alaska Native. But in a clear swipe at a group of plaintiffs seeking to reform management of billions of dollars of Indian funds, McCaleb said their six-year-old lawsuit was preventing him from achieving his priorities.

"Unfortunately, the litigation has taken first priority in too many activities, thus distracting attention from the other important goals that could provide more long-term benefits for Indian Country," he said in a statement released by the Department of Interior yesterday evening.

McCaleb, a former Oklahoma state legislator and politician, inherited a century-old problem known as the Indian trust. Funds the federal government manages on behalf of hundreds of tribes and more than 300,000 individual Indians are in such disarray that no one can account for them despite being charged by law to do so.

In September, a federal judge overseeing the individual accounts was so fed up with years of delays, obfuscation and game-playing that he held McCaleb and his boss, Secretary of Interior Gale Norton in contempt. A 267-page decision seared the Bush officials as "unfit" to manage the Individual Indian Money (IIM) trust, which was created in 1887 at a time when the government's policy was that Indians would disappear.

"The Department of Interior is truly an embarrassment to the federal government in general and the executive branch in particular," U.S. District Judge Royce Lamberth, who also held three Clinton administration officials in contempt, wrote.

McCaleb was visibly distraught in the days following the historic ruling. At an emotional meeting with tribal leaders later that month, he described the intense pressure he was under to meet the court's directives to account for Indian funds and fix the broken system.

"The last 12 days have been very difficult for me," he said. "I'm not accustomed to reading my name in the paper as being in contempt of court -- a fraud upon the court. I didn't lie to anybody. I'm not going to have that happen again if I can possibly prevent it."

It wasn't always that way for the eighth assistant secretary for Indian Affairs. In the midst of his contempt trial, during which he never testified, he told tribal leaders that the lawsuit -- filed by Elouise Cobell, a banker from the Blackfeet Nation of Montana, and other Indian leaders -- was a "blessing."

"It focused national attention on this issue," he said in late January. "Five years ago, nobody knew, so nobody cared outside of Indian Country. Now, they do."

But McCaleb lost a "golden opportunity" to make real change, charged Keith Harper, a Native American Rights Fund attorney representing the Indian plaintiffs. Like his colleagues, McCaleb was motivated by politics and a desire to undermine the rights of the beneficiaries, Harper said.

Top department officials "simply didn't do anything to advance the ball," he said last night. "Still today, they have nothing to show. One hundred years is long enough. We're not going to wait any longer."

Ron Allen, the outspoken chairman of the Jamestown S'Klallam Tribe, a small tribe in Washington with about 500 members, argued that McCaleb should be praised for tackling a "difficult challenge." "I really think Neal McCaleb was doing a fabulous job," he said.

"He probably got a little on the burnt-out side too quickly," he reasoned. Allen was one of two dozen tribal leaders who worked on a now defunct federal-tribal task force on trust reform.

McCaleb, who said he will retire by December 31, leaves his post amid increased scrutiny into his handling of the trust. A court investigator is probing allegations that he and other officials engaged in "concealment" by submitting a court report containing misleading information about a critical computer system.

Separately, he is being investigated for destroying internal e-mails in violation of his own policies and in contravention of court orders. McCaleb acknowledged the "misunderstanding" and hired computer experts to piece together the erased electronic records.

And just this week, government attorneys moved to appeal Lamberth's contempt decision and a group of decrees he issued on September 17. By January 6, 2003, the Interior is to submit: a plan to perform an historical accounting of all current and former IIM accounts, which number more than 500,000; a plan to bring itself into compliance with fiduciary obligations owed to the account holders; and a description of the standards by which the accounts will be administered.

It was not clear whether the appeal or McCaleb's resignation will delay the government's highly anticipated response to the court. The department won't consult tribes before submitting its plans although McCaleb last week said: "When we have something, we'll share it."

An Interior spokesperson did not return a request for comment. A BIA spokesperson declined to comment yesterday evening.

Relevant Documents:
McCaleb resigning from BIA (11/22) | Secretary Norton Statement (11/22)

Only on Indianz.Com:
McCaleb named to Indian Affairs post (April 18, 2001)
Reagan returns with new administration (April 18, 2001)
Tribal leaders have advice for McCaleb (April 18, 2001)
Biographical Sketch (April 18, 2001)
McCaleb pushes role as evangelist (July 19, 2001)
At BIA, McCaleb takes on the system (July 20, 2001)
Neal McCaleb in Review (July 23, 2001)

Relevant Links:
Indian Trust: Cobell v. Norton - http://www.indiantrust.com
Cobell v. Norton, Department of Justice - http://www.usdoj.gov/civil/cases/cobell/index.htm
Indian Trust, Department of Interior - http://www.doi.gov/indiantrust