Interior Secretary Gale Norton said she was pleased with the D.C. Circuit Court of Appeals decision. “It is gratifying that our detailed and comprehensive plan to conduct a statutorily-managed historical accounting has been underscored,” she said in a written statement.
The ruling comes in the wake of several previous court orders and congressional mandates requiring the Interior Department to get more than a half-million Native landowner accounts in order.
The appeals court said Lamberth shouldn't have relied on the old record because too much had changed in 17 months.
“Instead of deferring to Interior's judgment about how best to execute the historical accounting, the district court set out in great detail how Interior must go about its job,” wrote Judge Stephen Williams. “Under these circumstances, the district court abused its discretion by reissuing the injunction.”
This was one of the few court rulings in which both sides agreed.
“We weren't surprised,” said Dennis Gingold, attorney for Native landowners. “But we weren't particularly worried either. We never wanted the injunction in the first place.”
The Nov. 15 appeals court ruling still requires a historical accounting. But it also gives the Interior Department approval to use accounting methods previously discredited by Native landowners.
“We all know they can't do an historical accounting from 1887 forward,” said Elouise Cobell of Browning. “But they're telling judges they can do other types of accounting.”
The department has been engaged in statistical sampling to prove it can account for billions of dollars said to be missing from a half-million land-based money accounts belonging to Native people. The sampling method is being used because the department can't do transaction-by-transaction accounting because of missing records and corrupted computer data.
“Interior's decision to use statistical sampling seems especially reasonable in light of information submitted to the district court after it issued the injunction,” wrote Williams.
Interior officials have been under fire since 1994, when Congress passed legislation requiring the department to live up to its financial responsibility in managing the trust funds, or Individual Indian Money accounts.
When the department failed to act, Cobell filed suit in 1996. Today Norton stands as the defendant in the largest class-action lawsuit ever filed against the U.S. government. The case is nearing its 10th year of litigation.
It has since become a battle of numbers spanning 118 years. That's when the federal government appointed itself to oversee all money transactions from land-based accounts belonging to Native landowners.
Natives earned cash from grazing leases and mineral payments; the department estimates $13 billion has passed through the accounts since 1887.
But Cobell's attorneys have said the government has done such a poor job managing the accounts that a historical accounting is now impossible.
“It is not disputed that the government failed to be a diligent trustee,” wrote Williams in last Tuesday's ruling. “In the two decades leading up to plaintiffs' ... lawsuit, report after report excoriated the government's management of the IIM (Individual Indian Monies) trust funds.”
Meanwhile, the Interior Department has been trying to convince the courts that it has the accounting fiasco under control. One of the reasons the appeals court reversed the lower court's accounting order last week had to do with cost.
Before Lamberth issued his detailed accounting order, the Interior Department estimated its cost for a five-year period at $335 million. They said Lamberth's plan would raise their costs upwards of $13 billion, making accounting costs higher than the value of the accounts.
Also, Congress had set spending limits on the historical accounting. At the current rate of appropriations, noted Williams, the accounting “would not be finished for about 200 years.”
Lamberth previously had spurned the department's call for statistical sampling.
“Because the district court's ban on statistical sampling reflected no deference to defendant's expertise or to their judgment regarding the allocation of scarce resources, the district court abused its discretion by including that provision in the injunction,” wrote Williams.
Cobell said the lawsuit against the department “could be over tomorrow,” if only Norton would admit her accounting experts can't do a historical accounting.
Their next legal motion will argue that point. Within the next 45 days, they will ask the court to rule that a historical accounting is legally impossible because of the department's faulty information technology systems.
On Sept. 19, the Interior Department released a “progress” report lauding its efforts to provide a historical accounting and for protecting computer account information.
“Interior's accounting experts have uncovered no evidence of fraud or widespread systematic error in the U.S. government's handling of the Individual Indian Monies accounts, and the few errors that have been found are generally small in monetary value,” wrote Norton in the report.
Additionally, no evidence exists to show that “historical records have been altered or that hackers have tampered with electronic records.”
Yet a government test of the computer security systems proved otherwise.
On Oct. 20, Lamberth ordered an Internet shutdown of the Interior Department's computer systems used for trust fund transactions. Interior officials asked the appeals court to hold off on the order and were granted the request.
Additionally, a Sept. 6 memo from the Interior Office of Inspector General, said a testing of department information technology systems, including the Bureau of Indian Affairs, Office of Surface Mining, Minerals Management Service, Office of Special Trustee and the Bureau of Land Management - departments that handle Native trust fund transactions - showed significant problems.
Inspector General Earl Devaney said internal computer systems checks allowed hackers “to masquerade as authorized users, roam around in the internal networks of some of the most sensitive of DOI systems, and most recently actually manipulate data.”
But Interior officials have failed to acknowledge the findings.
“The department and bureaus have, to date, expended considerable time and energy debating our findings, challenging our methodology, and impugning the credentials and integrity of our staff and contractors,” wrote Devaney.
Similar complaints have been consistently made, but “no one's ever listened to us,” said Gingold. The recent appeals court ruling will allow the Cobell lawyers to pursue enforcement of a federal regulation that states federal agencies and department's information technology systems must be proved secure.
“Unless systems are deemed to be trustworthy, none of the information in those systems and none of the reports based on the information Š can be used in a federal court,” said Gingold.
Reporter Jodi Rave can be reached at 523-5299 or at jodi.rave@lee.net
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