- The Washington Times - Saturday, July 19, 2003

An appeals court panel yesterday overturned a ruling by a federal judge holding Interior Secretary Gale A. Norton in contempt for what he called the Interior Department’s “disgraceful” role in the mismanagement of billions of dollars in trust fund royalties for more than 350,000 American Indians.

The three-judge panel of the U.S. Circuit Court of Appeals for the D.C. Circuit said in a 31-page ruling that U.S. District Judge Royce C. Lamberth erred when he ordered contempt citations for Mrs. Norton and Neal McCaleb, then-assistant Interior secretary for Indian affairs, based on the conduct of their predecessors and without a finding that either had disobeyed a clear order of the court.

“Because Secretary Norton cannot be held criminally liable for contempt based upon the conduct of her predecessor in office, her contempt conviction cannot stand. She simply cannot be held criminally to account for any delay that occurred prior to her assuming office,” said the panel in a ruling written by Chief Judge Douglas Ginsburg.

“Moreover, the district court’s findings clearly indicate that in her first six months in office, Secretary Norton took significant steps toward completing an accounting,” Judge Ginsburg wrote.

The contempt citations were ordered in September in a 1996 lawsuit charging that the Interior Department mismanaged billions of dollars in Indian trust funds held in 350,000 individual accounts and 2,000 tribal accounts.

Judge Lamberth had ordered department officials to account for the funds, saying records provided to the court showed that the money was so severely mishandled that the government had no idea how much was missing nor where it could be found. The money came from oil, gas and timber royalties paid to the Indians but managed by the government.

He also accused the Justice Department of engaging in a cover-up in its representation of Interior, saying the department obstructed a legitimate inquiry into whether government attorneys had lied to the court. He said the conduct of the Justice Department attorneys in the case had made a “mockery of all that the Department of Justice stands for.”

In his contempt order, the judge said Mrs. Norton concealed documents, and made false and misleading statements. He said Interior had “indisputably proven” it was either unwilling or unable to competently administer the Indian trust fund.

Mrs. Norton was the first Bush administration Cabinet officer to be held in contempt.s

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