Interior Secretary Faces Contempt Proceedings

A federal judge threatened Wednesday to begin contempt-of-court proceedings next week against Interior Secretary Gale A. Norton for filing what he called misleading and inaccurate reports with the court on her efforts to clean up the long-troubled Indian trust fund system.

U.S. District Judge Royce C. Lamberth said Norton and Assistant Secretary Neal McCaleb, who heads the department’s Bureau of Indian Affairs, would stand trial Monday for “committing a fraud on the court by misleading” the judge.

Lamberth said he would hold a preliminary hearing Friday to discuss the civil contempt trial and to determine what witnesses could testify against Norton and McCaleb. Interior Department lawyers are expected to try to head off the trial, or at least postpone it, on grounds that Norton is making progress on straightening out the century-old fund.

The trust fund, which is supposed to benefit about 300,000 tribal members, was established in the 1800s to hold and distribute fees from oil, grazing, drilling and logging leases on 54 million acres of Indian land. It has been plagued by problems since its inception.

A class-action lawsuit filed by Indian groups in 1996 led Lamberth two years ago to hold then-Interior Secretary Bruce Babbitt and then-Treasury Secretary Robert E. Rubin in contempt for failing to correct mismanagement of the trust fund, for failing to produce documents and for allowing destruction of files. The judge fined them $625,000, which the government paid.

Norton, who court officials said could receive up to six months in prison in addition to a fine, recently reorganized management of the fund and promised to consult with representatives of Native Americans and other interested parties. Indian groups long have complained about being kept in the dark about fund problems.

Native Americans have claimed in court that the government has squandered more than $10 billion in royalties owed them over many decades.

In response to Lamberth’s order, Interior Department spokesman Eric Ruff said Norton has taken great strides to improve the situation, including creation of a new office specifically dedicated to managing the funds.

Lamberth based much of his contempt order on a series of scathing reports submitted by a court monitor whom he appointed last May. Joseph S. Kieffer III, who assessed the Interior Department’s compliance with trust reform orders issued by the court in 1999, documented repeated falsehoods in what the department was telling the judge about its accounting and data cleanup efforts.