Bush aide failed to stop fraud in fund for US tribes

A century-long struggle by native Americans claiming $10bn (£6.4bn) compensation has been boosted by a federal judge who ruled that a Bush cabinet member failed to correct faulty accounting procedures that have lost hundreds of millions of dollars of their money.

In a damning 267-page judgment US District Judge Royce Lamberth said he was "both saddened and disgusted" by the disgraceful conduct of the Interior Secretary, Gale Norton, and other officials in the department entrusted with overseeing the royalties earned from Native American lands. He found her in contempt of court and listed four examples where the department committed fraud against the court.

Ms Norton is the third cabinet member to be found in contempt by the court over the handling of the government's Indian trust fund. Bruce Babbitt and Robert Rubin, who were the interior and treasury secretaries under Bill Clinton, were held in contempt in 1999.

The fund was set up in 1887 against a backdrop of racism and paternalism when Congress took 90 million acres from native American tribes and gave the land to white homesteaders. The native Americans were left with small plots and the Interior Department was assigned to manage grazing, timber and oil and gas drilling on the land, and ensure the tribes received royalties.

The department's Bureau of Indian Affairs is supposed to collect rents from more than 11 million acres and then send regular cheques to up to 300,000 native Americans who own the land. But the records are a shambles. In report after report, the General Accounting Office, Congress's auditing arm, and various congressional committees have found shoddy accounting in a system that annually deals with $500m. The government does not, for instance, have current addresses for about 50,000 native American beneficiaries.

The ruling made on Tuesday came as part of a current lawsuit brought in a class action in 1996 by native Americans who said that for more than a century an untold amount of money meant for some of the nation's poorest people was lost, stolen or never collected.

The lead plaintiff is Louise Cobell, 56, a member of the Blackfeet tribe who lives on a tribal reservation at Glacier National Park in Montana. "For the first time we are going to make the government live up to the promises they told the Indian people," said Ms Cobell. "I find it very racist. If you just think about it, they have not given us proper accounting since 1887 on our fund."

She added: "We've got them on the run. The heavens are screaming for justice in this case, and now it's coming through for us."

Their lawyer, Dennis Gingold, believes up to $10bn might be paid out. "The court confirmed what we've been saying all along. The Secretary of Interior and Justice Department lawyers have been lying to the court and she continues to lie to the court," he said.

In his ruling Judge Lamberth wrote: "The agency has indisputably proven to the court, Congress, and the individual Indian beneficiaries that it is either unwilling or unable to administer competently the trust. Worse yet, the department has now undeniably shown that it can no longer be trusted to state accurately the status of its trust reform efforts. In short, there is no longer any doubt that the Secretary of Interior has been and continues to be an unfit trustee-delegate for the United States."