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September 17, 2002
COBELL v. NORTON: WEB ALERT

Court finds that Secretary Norton and Assistant Secretary McCaleb committed 4 counts of fraud and held them in civil contempt. Further, the Court found that Norton and McCaleb engaged in litigation misconduct by failing to initiate the accounting ordered by this Court.

Opinion: http://www.indiantrust.com/documents/2002.09.17_%20Contempt2Opinion.pdf

Order: http://www.indiantrust.com/documents/2002.09.17_Contempt2Order.pdf

Court has set a third contempt trial for Secretary Norton and Assistant Secretary McCaleb commencing December 18, 2002.

Court has found that plaintiffs have met the standard for appointing a receiver and that the appointment of a receiver is warranted and constitutionally permissible. The Court found that:

The Department of Interior’s administration of the Individual Indian Money (“IIM”) trust has served as the gold standard for mismanagement by the federal government for more than a century. As the trustee-delegate of the United States, the Secretary of Interior does not know the precise number of IIM trust accounts that she is to administer and protect, how much money is or should be in the trust, or even the proper balance for each individual account. Because of the Secretary’s systemic failure as a trustee-delegate, the federal government regularly issues payments to beneficiaries-of their own money-in erroneous amounts. In fact, the Interior Department cannot provide an accurate accounting to the majority of the estimated 300,000 trust beneficiaries, despite a clear statutory mandate and the century-old obligation to do so. As the Court observed more than two years ago, “[i]t is fiscal and governmental irresponsibility in its purest form.” Cobell v. Babbitt (“Cobell V”), 91 F.Supp.2d 1, 6 D.D.C. 1999).

Equally troubling is the manner in which the Department of Interior has conducted itself during the course of this litigation. In February of 1999, the Court held Bruce Babbitt, then Secretary of the Interior, and Kevin Gover, then-Assistant Secretary of Interior for Indian Affairs, in civil contempt for violating two of this Court’s discovery orders. Among other things, the Court found that almost immediately after proposing a clear and unambiguous order which the Court signed, “the defendants disobeyed that order and successfully covered up their disobedience through semantics and strained, unilateral, self-serving interpretations of their own duties.” Cobell v. Babbitt (“Cobell IV”), 188 F.R.D. 122, 140 (D.D.C. 1999). The defendants’ misconduct did not end there. Since holding then- Secretary Babbitt and then-Assistant Secretary Gover in contempt, the Court has had to sanction the Department of Interior for filing frivolous motions, enter several temporary restraining orders to prevent the Department from taking potentially adverse actions, and appoint both a Special Master (to oversee discovery) and a Court Monitor (to review the defendants’ trust related activities). Moreover, there are several motions currently pending before the Court regarding alleged misconduct by the Interior Department. In short, the Department of Interior has handled this litigation the same way that it has managed the IIM trust-disgracefully.

* * *

In February of 1999, at the end of the first contempt trial in this matter, I stated that “I have never seen more egregious misconduct by the federal government.” Cobell II, 37 F.Supp.2d at 38. Now, at the conclusion of the second contempt trial in this action, I stand corrected. The Department of Interior has truly outdone itself this time. The agency has indisputably proven to the Court, Congress, and the individual Indian beneficiaries that it is either unwilling or unable to administer competently the IIM trust. Worse yet, the Department has now undeniably shown that it can no longer be trusted to state accurately the status of its trust reform efforts. In short, there is no longer any doubt that the Secretary of Interior has been and continues to be an unfit trustee-delegate for the United States.

Over a two year period, the defendants successfully led this Court and the plaintiffs to believe that they were bringing themselves into compliance with the 1994 Act, and that they were taking steps that would one day provide the foundation for a historical accounting of the IIM trust accounts. In reality, as the Court chronicled in painstaking detail above, the Interior Department was experiencing so many difficulties in so many different aspects of its trust reform effort that the agency is still only at best marginally closer to discharging its fiduciary obligations properly than it was three years ago when the Court held the Phase I trial. Moreover, in terms of the historical accounting project, the Court’s findings make clear that the Department did virtually nothing during the eighteen month period following this Court’s Order of December 21, 1999. As a result of this fraudulent conduct, the defendants are in civil contempt of this Court.

Congress has mandated, the Court has ordered, and the beneficiaries have pleaded for meaningful reform of the IIM trust. This Court need not sit supinely by waiting, hoping that the Department of Interior complies with the orders of this Court and the fiduciary obligations mandated by Congress in the 1994 Act. To do so would be futile. I may have life tenure, but at the rate the Department of Interior is progressing that is not a long enough appointment. Accordingly, the Court has ordered relief today that it views as being absolutely necessary to getting both this case and trust reform back on track. In the meantime, Secretary Norton and Assistant Secretary McCaleb can now rightfully take their place alongside former-Secretary Babbitt and former-Assistant Secretary Gover in the pantheon of unfit trustee-delegates.




Cobell v Norton is a class action suit against the federal government regarding mismanagement of IIM [Individual Indian Monies] trust accounts (billions of dollars in oil, gas, coal, timber and other revenue derived from more than 11 million acres of land held in trust for the benefit of 500,000 current individual Indian trust beneficiaries)

This Site first became aware of this IMPORTANT lawsuit (for everyone) when an email with the following article arrived the first of March, 2001.

To subscribe to the Indian Trust mailing list, please click on the following link (if available) or paste it into your browser:
http://www.indiantrust.com/

Cobell v Norton Updates Page

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