A federal judge in Washington, DC, has ordered Interior Secretary Gale Norton to face a civil contempt trial for failure to comply with court orders to clean up the alleged mismanagement of royalty monies held and overseen by the agency in the Indian Trust Fund.

U.S. District Judge Royce C. Lamberth has ordered Norton and Neal McCaleb, assistant secretary of Interior for Indian Affairs, to show cause why they should not be held in contempt of court “in their official capacities” for violating court orders and for defrauding the court in matters relating to royalties in the trust fund. The contempt trial is scheduled to begin today (Dec. 10).

Interior holds about 56 million acres of land and several billions of dollars of royalties in trust for Indian tribes and other individuals. The Indian plaintiffs in the case argue that Interior has mismanaged royalties in the neighborhood of $10 billion, said one source familiar with the case. The royalties stem from oil and natural gas production on Indian lands, as well as other royalty-bearing activities such as mining and timber.

The trust mismanagement charges date back to almost the very start of the 130-year-old trust fund, and have been inherited by Norton from previous Interior secretaries who essentially allowed the problem to snowball over the years.

Specifically, Lamberth’s order calls on Norton and McCaleb to explain why the agency failed to comply with a court order to initiate an Historical Accounting Project for the fund, failed to disclose the true status of the Trust Asset and Accounting Management System (TAAMS) project between September 1999 and Dec. 21, 1999, and filed “false and misleading” quarterly status reports on TAAMS and other activities beginning in March 2000.

Norton last summer commissioned Electronic Data Systems Inc., an independent consulting firm, to review the agency’s management of the Indian Trust Fund. Last month, she unveiled plans to reorganize and consolidate the asset management functions of the Indian trust into a separate new organizational unit, the Bureau of Indian Trust Assets Management. It will report to a new assistant secretary, who will report directly to Norton.

In related action, Interior last week shut down its web page in compliance with a temporary restraining order (TRO) issued by Lamberth. The judge ordered the department to disconnect from the Internet its database systems that “house or provide access to” information on royalties held in individual Indian trusts, and to disconnect from the Internet all computers within the “custody and control” of the department, its employees and contractors that have access to the data.

Lamberth reportedly took this action out of security concerns about the systems that hold information on royalties derived from Indian lands, fearing that they could be easy prey for hackers. The TRO did not specify how long Interior’s web site was to remain down.

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