A federal judge raked Interior Secretary Bruce Babbitt over the coals last month, when he held Babbitt in contempt of court in a lawsuit over unaccounted-for Indian money. Babbitt's department "engaged in a shocking pattern of deception of the court," said Federal District Court Judge Royce Lamberth. "I have never seen more egregious misconduct by the federal government."
At issue is lease money the department collects
from grazing, oil and gas, and timber operations on Indian
reservations. Thanks to the 1887 Dawes Act, the department is in
charge of distributing lease money to the tribes and individuals
who own the land. But a massive class-action lawsuit, led by
Browning, Mont., banker Elouise Cobell and the Boulder Colo.-based
Native American Rights Fund, claims the department has lost track
of tens of billions of dollars (HCN,
"They've mismanaged trust assets from
the beginning of time," said Cobell. "And by keeping information
away from people, they've been able to control them."
In November, Lamberth ordered Interior to find
the documentation for the accounts of five individual Indians and
their ancestors. The department promised the papers, but never
On Feb. 22, the judge held Babbitt,
his Assistant Secretary Kevin Gover and Treasury Secretary Robert
Rubin in contempt. He called on a "special master," similar to an
independent counsel, to keep tabs on Interior for the remainder of
the suit. The government must also cover Cobell's legal and
The Interior Department was
quick to point out that Babbitt inherited the accounting problems.
But the judge's message was clear: Babbitt will not be able to pawn
this problem off on the next Interior secretary. If he tries, he
could face criminal contempt charges.
hoping to exchange Babbitt's vertical pin stripes with broad
horizontal stripes," said Dennis Gingold, lead counsel in the
lawsuit. "He's playing fast and loose with the law."
Is Babbitt a whipping
Interior spokeswoman Stephanie Hanna says
Babbitt is taking the heat for a problem that started over a
century ago. "There have been 46 secretaries of the Interior who
have basically turned a blind eye to the problem. There's been 106
years of Congress that's failed to fix it," she said. "Babbitt is
the only secretary of the Interior who hasn't put it off."
To Babbitt's credit, there has been progress.
Last year, his department finished a five-year, $21 million effort
to reconcile trust funds belonging to tribes. It admitted that it
had lost track of about $2 billion and offered to negotiate
settlement payments with the tribes.
Interior put a bill before Congress aimed at ending the
fractionation of Indian land. Under inheritance codes set up by the
Dawes Act, when a landowner dies, the Bureau of Indian Affairs
keeps the land physically intact, but divides it on paper by giving
each heir an interest in it. With each passing generation, Indians
own smaller and smaller fractions of their land, and it becomes
harder and more expensive for the bureau to keep track of the many
Interior's bill would have set up a fund
to buy interest in land and consolidate ownership. Congress never
even gave it hearings.
Finally, Interior has put
together the first comprehensive plan to correct the problems with
the Individual Indian Money accounts owned by Cobell and 300,000
others. In January, soon after Judge Lamberth ordered Babbitt to
answer to contempt charges, the department asked Congress for $100
million this year to throw into the effort, a $60 million increase
over last year. Officials hope to have the trust management program
on track by 2000.
"I have made this my highest
priority," Babbitt told the Senate Committee on Indian Affairs in
early March. "I do not want to pass on to my successors what I
dragged its heels
Critics say that if Elouise
Cobell's lawsuit hadn't forced him to act, Babbitt would have
gladly handed this one off. "We've seen what Babbitt does with his
highest priorities. He's gone to bat for environmental causes, but
he's never even spoken publicly on this issue," said Native
American Rights Fund attorney Keith Harper. "Babbitt wants to look
like he's doing reform, but he doesn't want to pay the price."
At the Senate hearings in March, Osage Chief
Charles Tillman painted a picture of the Secretary stalling reform
and breaking promises: During his 1993 confirmation hearing, he
promised a reform plan within 60 days. The plan didn't materialize.
In 1993, Babbitt promised Congress he would comment on the pending
Indian Trust Management Reform Act. Congress sat on the bill for a
year in anticipation of Babbitt's comments, but they never came.
Then, when Congress went ahead without him, Babbitt did everything
in his power to undermine the act, said Tillman, who sits on the
board of the Intertribal Monitoring Association on Indian Trust
Then in January, Babbitt reorganized the
office of the Special Trustee, a position created by the 1994
Reform Act to oversee the cleanup of the trust records. Two days
later, Special Trustee Paul Homan resigned, saying Babbitt had
gutted his authority.
surrounded Homan, pounded him, and were eventually able to drive
him out of office," said Tillman. "With Mr. Homan's resignation,
there is not a single person in the chain of command on trust
reform who has a single day of experience running trust systems."
Without Homan, lead counsel Dennis Gingold
worries the effort to reform the trust accounts will backslide. The
only solution would be for Judge Lamberth to step in and oversee
the entire effort, says Gingold: "The Department of Interior should
not be managing trust funds anymore."
lawmakers are lining up to oppose Babbitt's reform plans. On March
5, Colorado Republican Sen. Ben Nighthorse Campbell amended an
Interior appropriations bill to prohibit Babbitt from spending
money on the reorganization that sparked Homan to
* Greg Hanscom,
* Keith Harper, Native American
Rights Fund, 202/785-4166;
* Stephanie Hanna,
Interior Department, 202/501-4633.