Babbitt Pledges to Clean Up Indian Trust Fund Mess

Article excerpt

Interior Secretary Bruce Babbitt, facing a contempt citation by an angry federal judge and ordered to appear before a Senate committee under threat of a subpoena, promised yesterday to fix a $2.4 billion management mess involving Indian trust funds his department is supposed to protect.

Mr. Babbitt made the pledge at a meeting of the Senate Indian Affairs Committee and the Senate Energy and Natural Resources Committee, which he was compelled to attend when Sen. Ben Nighthorse Campbell, Colorado Republican, threatened to force his appearance with a subpoena.

"You'll be the judge. I will do my best," Mr. Babbitt said when asked what he would do about mismanagement of trust fund accounts by the department's Bureau of Indian Affairs (BIA). The bureau has been unable to produce accounting records or statements to verify how much cash has been collected.

But Sen. Larry E. Craig, Idaho Republican, said, "There should be no excuses," expressing the sentiment of GOP senators who said they doubt the mess could be cleaned up. "Why can't we be smart enough to hire the right people to do the job?"

The debate focused on a class-action lawsuit filed in 1996 by the Native American Rights Fund that accused the department's Bureau of Indian Affairs of mismanaging trust fund accounts. The Interior Department was named in the suit, along with Mr. Babbitt and Treasury Secretary Robert E. Rubin.

The two departments manage money from, among other sources, land settlements, royalties from minerals and other resources, and companies that use Indian land. An audit by the Arthur Andersen accounting firm said the BIA could not account for $2.4 billion in transactions involving the funds.

Special Trustee Paul Homan, a presidential appointee assigned to oversee the fund, resigned in January, saying Mr. Babbitt had stripped him of the authority he needed to do the job. …