Judge: Treasury still in breach of trust fund

TUESDAY, OCTOBER 2, 2001

Words of praise from Indian beneficiaries and court investigator assigned to the Cobell v. Norton lawsuit have not been enough to prove the Treasury Department has satisfied its trust responsibilities, a federal judge has concluded.

The department is still in breach of trust to an estimated 300,000 American Indians throughout the country, U.S. District Judge Royce Lamberth said last Friday. Rejecting a motion filed by government attorneys during the Clinton administration, Lamberth refused to allow the Treasury to suspend quarterly reporting to his court.

Although Lamberth's decision has no immediate impact beyond the status reports, it asserts his continuing oversight of the government. In a landmark December 1999 ruling, Lamberth said he would give the Departments of Interior and Treasury one last chance to prove they could fix the broken trust fund.

In its defense, the Treasury argues that it has since corrected a system Lamberth's court once identified as "out of control." Management changes, training sessions and internal initiatives should prevent a "deeply embarrassing" incident like the destruction of 162 boxes of trust fund documents at a Treasury facility in Maryland from occurring again, the department asserted.

For the most part, special master Alan Balaran has agreed. Last month, the court investigator commended the department for its "overwhelmingly positive response" to the Cobell litigation. Previously, he had criticized the Treasury for waiting more than two years to become involved in the lawsuit even though it was a named defendant.

At the same time, Balaran has also suggested greater oversight of the department. He recommended the agency designate special office to ensure all necessary trust fund documents are retained.

Lawyers for the Cobell plaintiffs, too, have welcomed the Treasury's efforts, saying they "applaud" better cooperation with the court. They are also asking Lamberth to hold off on the trust fund office for now.

On appeal of the 1999 ruling, the government challenged Lamberth's five-year oversight of the trust fund. In February, an appeals court, while noting the unusual circumstances, said that Lamberth was well within his power to watch over a system so improperly handled that it "would be difficult to find a more historically mismanaged federal program."

In addition to Balaran, Lamberth has assigned court monitor Joseph S. Kieffer III to watch over the Interior. Both Balaran and Kieffer have been praised by the Cobell plaintiffs for their investigations and reports.

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