Interior Secretary Off The Hook

A federal appeals court Friday threw out a contempt ruling against Interior Secretary Gale Norton for her agency's mismanagement of a trust fund for billions of dollars in royalties from American Indian land.

The U.S. Court of Appeals for the District of Columbia Circuit said Norton could not be held responsible for acts that occurred before she took office. As to the conduct during Norton's tenure, the court ruled it did not rise to the level of fraud against 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," Chief Judge Douglas Ginsburg wrote for a unanimous three-judge panel.

U.S. District Judge Royce Lamberth ruled in September that Norton and Assistant Secretary for Indian Affairs Neal A. McCaleb had failed to comply with his 1999 order to account for more than a century of proceeds from oil, gas, mining and timber royalties on Indian land.

Lamberth said the officials had committed "fraud on the court" by concealing the failures and misrepresenting their progress in fixing the management problems and protecting the Indian money.

In a 31-page opinion, the appellate court also threw out the contempt finding against McCaleb, holding that the lower court failed to specify "any specific act or omission whatsoever on his part."

The court also said the district court erred in appointing a special court monitor to oversee portions of the case over the objections of the Interior Department.

That monitor, Joseph S. Kieffer III, had harshly criticized the Interior Department's management of hundreds of millions of dollars of American Indian money. In April, the appeals court suspended the monitor, after oral arguments in the case.

"Regardless of whether the district court has any inherent authority to appoint an agent to monitor the conduct of a party in litigation before it, it was surely impermissible to invest the court monitor with wide-ranging extrajudicial duties over the government's objection," Ginsburg wrote for the three-judge panel.

"In this case, the district court's appointment of the monitor entailed a license to intrude into the internal affairs of the department, which simply is not permissible under our adversarial system of justice and our constitutional system of separated powers."