Judge removed after scathing order

By Chris Casteel
Published: July 12, 2006

Overseer of Indian trust accounts to change over bias against government, court rules.

The federal judge who presided for 10 years over a contentious Indian trust fund case was removed by a U.S. appeals court on Tuesday.

The decision came a year after U.S. District Judge Royce C. Lamberth issued a scathing order in the case, saying the Interior Department’s actions were “shot through with bureaucratic blunders, flubs, goofs and foul-ups, and peppered with scandals, deception, dirty tricks and outright villainy — the end of which is nowhere in sight.”

Interior attorneys brought the appeal, saying they no longer believed Judge Lamberth could impartially oversee the case.

The U.S. Court of Appeals for the District of Columbia Circuit agreed. Justices said Lamberth, in his July 2005 order, suggested Interior officials were racist and made other statements that “go beyond criticizing Interior for its serious failures as trustee and condemn the department as an institution.”

Besides ordering that the case be assigned to another judge, the appeals court reversed Lamberth’s order disconnecting parts of the Interior Department from the Internet and a separate order requiring the department to warn Indian trust account holders about the reliability of financial information.

While ruling that Lamberth had overstepped his bounds, the appeals court did not condone the Interior Department’s actions in the long-running dispute over the management of some Indians’ money, including that of an estimated 53,000 Oklahomans with individual trust accounts.

“To be sure, Interior’s deplorable record deserves condemnation in the strongest terms,” the decision states.

The appeals court said assigning a new judge presented an opportunity for “a fresh start.”

Elouise Cobell, the lead plaintiff in the classaction lawsuit filed by Indian trust account holders in 1996, said, “We are disappointed that the Indian trust case has been reassigned because this will end the truly heroic efforts of a sincere and devoted jurist, the Honorable Royce C. Lamberth, to remedy the century of abuse of Indian people by the Department of Interior.”

She said the decision to reverse Lamberth’s or- der to disconnect trust fund information from the Internet will be appealed to the U.S. Supreme Court.

But Cobell also sought to find a silver lining on the day of defeats for her and the other plaintiffs, saying the appeals court had upheld the central allegation in the case — that the Interior Department failed in its obligation as a trustee to the individual Indian account holders.

Tina Kreisher, communications director for the Interior Department, said, “We are pleased with the Court of Appeals’ rulings. At Interior, we take our Indian trust responsibilities seriously. We have been undertaking the accounting of Indian trust accounts — this will continue.”

Lawmakers want settlement

The Cobell case involves government management of funds put into trust accounts for individual Indians who receive payments for oil and gas, grazing, timber and other leases; other individual accounts also are part of the litigation.

A key issue, still unresolved, is how the Interior Department should conduct an “historical accounting” of up to 500,000 accounts to determine how much money they should hold. Some of the accounts date to the late 19th century; some have balances of just a few cents.

In the past few years, Congress has approved more than $100 million to reform the trust accounting system.

Many lawmakers have become frustrated with the case and the collateral issues, such as Internet security. Some have blamed Lamberth for the slow pace.

Legislation was introduced in the House and Senate last year to settle the case, but there has been little movement toward a resolution.

In open court and in written orders and decisions, Lamberth was a harsh critic of the Interior Department and has held a number of officials in contempt, including former Bureau of Indian Affairs Director Neal McCaleb, an Oklahoman. The appeals court that removed Lamberth on Tuesday overturned the contempt citation of McCaleb and those of others.

After the order last July, in which Lamberth said the Interior Department was “the morally and culturally oblivious hand-me-down of a disgracefully racist and imperialist government that should have been buried a century ago,” the department asked the appeals court to reassign the case.

In its decision Tuesday, the appeals court said, “As the litigation proceeds, the government must remember that although it regularly prevails on appeal, our many decisions in no way change the fact that it remains in breach of its trust responsibilities.

“In its capacity as trustee and as representative of all Americans, the government has an obligation to rise above its deplorable record and help fashion an effective remedy.”