U.S. District Judge Royce Lamberth ordered the department to disconnect its Internet systems two weeks ago because the department had refused to work with a court-appointed monitor to patch security holes in its system that accounts for hundreds of millions of dollars a year in royalties from American Indian land.
"The effect of this action on your state, unfortunately, will be to forestall the processing and distribution of your state's share of federal mineral revenues until such time as we receive the court's permission to resume system operations," Minerals Management Service director R.M. "Johnnie" Burton wrote in a letter to the 36 governors.
The state payments averaged more than $91 million per month last year. In February, Wyoming alone received $39 million, New Mexico $27 million and California and Colorado each more than $5 million.
The order will also prevent American Indian landowners and Indian tribes from receiving their monthly royalty payments for oil, gas, timber and livestock activity on their land.
New Mexico Gov. Bill Richardson said Tuesday he was deeply concerned that Interior has not done enough to ensure its computer security and called on Interior Secretary Gale Norton to quickly solve the problem.
"New Mexico relies on these payments that total 8 percent of the state's entire annual budget to fund education," he said. "The failure of the federal government to deal with this problem has put the education of thousands of New Mexico schoolchildren at risk."
The Interior Department has asked Lamberth to allow the computers to be put back online. "Interior has invested substantial time, effort and funding in improving our information technology security," Interior Secretary Gale Norton told the court.
In addition to the mineral payments, 50,000 children attending 184 schools in 23 states run by the Bureau of Indian Affairs cannot gain Web access. Environmental groups have complained they cannot gather information to offer informed input on policy decisions.
The Interior Department "knowingly and willfully created this crisis," said Dennis Gingold, attorney for the Indian landowners. He said Interior could easily work around the Internet shutdown by using disks to plug in the necessary information, but they refuse to do it because they want to put pressure on the judge to lift his order.
"These are all just a bunch of corrupt people," he said.
The department may ask the U.S. Court of Appeals for the District of Columbia Circuit to issue an emergency order allowing the computers to go back online.
Lamberth is presiding in a class-action lawsuit, filed on behalf of more than 300,000 American Indians, alleging that since 1887 the department lost, stole or never collected tens of billions of dollars in royalties that should have been paid to Indian landowners.
By Robert Gehrke