Treasury Department officials shredded 162 boxes of documents being sought in a lawsuit involving the mismanagement of Indian trust funds, covered up their actions for more than three months and lied to a federal court about it, court records show.
The document destruction was outlined in a report by court-appointed investigator Alan Balaran, released yesterday by U.S. District Judge Royce Lamberth - who four months ago ordered the government to pay $625,000 for the earlier "disobedience" of Interior Secretary Bruce Babbitt and then-Treasury Secretary Robert E. Rubin in withholding records in the case.
"This is a system clearly out of control," Mr. Balaran said in the report.
Justice Department lawyers, citing potential "severe and unfair damage" to the reputations of seven Treasury Department lawyers questioned in the shredding probe and the possibility of "eroding confidence" in the agencies involved, asked Judge Lamberth Friday to delay releasing the report. The judge denied the motion.
"It has already been almost seven months since this matter was brought to the court's attention. The court is unwilling to allow additional weeks - or months - to go by before this matter is placed on the public record," Judge Lamberth wrote.
The judge said in his five-page order making the Balaran report public the document destruction was authorized "on the very same day" Treasury officials were testifying before the court about their negligence in allowing the destruction of voluminous microfilm files that should have been preserved.
He also said that on that same day - Nov. 23, 1998 - Treasury and Justice Department lawyers were "repeatedly assuring the court that all necessary steps were being taken to preserve all relevant documents."
"Rather than coming forward at that time and making the necessary admissions, the Treasury officials deliberately decided not to tell Justice Department officials about the destruction, arrogating totally to themselves the decision that the documents were not related to this litigation, a decision that everyone involved now admits was wrong," the judge wrote.
Attorneys for the Indians told reporters yesterday the government's actions reflected a continuing pattern of "obfuscation, stonewalling and delay."
"It is clear from this latest event and the history of the case that the government continues to not take this case seriously, and that includes a lot of their employees across this agency," said John Echohawk, executive director of the Native American Rights Fund.
In a joint statement, the Treasury and Justice departments said they would "respond to the court as appropriate." The statement also said the departments were "disappointed" in some conclusions in the Balaran report, but was committed to "cooperating with the court to resolve all issues fully and fairly. …