Clinton Treasury Department
Caught Shredding Indian Files

(Editor's note: Is there nothing this administration won't do to cover up its own malfeasance? Is there no law it respects? Is there no one in the administration with the integrity to call a halt to this kind of behavior? Given the obvious answer to those three questions, we propose a third: Is anybody ever going to go to jail?)

WASHINGTON — In a case in which the Clinton administration's Interior Department is already in deep hot water, the Treasury Department may now be facing obstruction of justice charges.

Treasury shredded potential evidence in a multibillion-dollar lawsuit over American Indian trust funds, then covered it up for more than three months, a court-appointed investigator has concluded.

Clinton administration lawyers misled the federal judge overseeing the case, investigator Alan Balaran said in a report released Monday. In a strongly worded opinion released with the report, U.S. District Judge Royce Lamberth also accused government lawyers of making false statements to him.

``This is a system clearly out of control,'' Balaran wrote. He said the shredding and cover-up were ``part of a greater pattern of obfuscation'' by the government in the lawsuit over the mishandling of accounts for more than 300,000 Indians now worth about $500 million.

In February, Lamberth held then-Treasury Secretary Robert Rubin and Interior Secretary Bruce Babbitt in contempt of court for mishandling other records in the case. Workers shredded 162 boxes of Treasury Department documents possibly related to the lawsuit while Lamberth was holding hearings on the contempt issue —_ starting the day Treasury officials testified about destroying microfilm, the Treasury Department acknowledged later.

After ordering the shredding halted Jan. 28, Treasury Department lawyers waited more than 14 weeks before notifying the Justice Department and Lamberth in May, the department also has acknowledged.

In his Monday order, Lamberth wrote that he was ``deeply disturbed'' by the delay and by the fact that the government's assurances that records were being preserved ``turned out to be just as false as those false representations that led to the court's February contempt findings.''

The Treasury and Justice departments issued a joint statement Monday noting that Balaran's report was not a final court determination. The Treasury Department ordered an internal investigation of the incident in June, the statement said.

``In fairness to all concerned, we caution against drawing conclusions prematurely,'' the statement said, without explaining whether the departments took issue with anything Balaran wrote.

The Indians' lawyers said last month they would seek another contempt citation after Balaran found trust fund documents dumped into a shed with used tires and other debris on a North Dakota reservation.

Justice Department lawyers had joined five Treasury Department lawyers in asking Lamberth to delay releasing the report, saying it ``could result in severe and unfair damage'' to the Treasury lawyers' reputations. Lamberth rejected that request Monday.