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Subject: Judge To Investigate Babbitt
Date: Mon, 11 Jan 1999 17:02:06 EST

Judge To Investigate Babbitt

.c The Associated Press

By PHILIP BRASHER

WASHINGTON (AP) -- A judge threatening to hold Interior Secretary Bruce
Babbitt in contempt for his department's failure to hand over Indian trust
records for a lawsuit is looking into Babbitt's recent moves against the
officials in charge of the accounts.

As a contempt hearing opened Monday, U.S. District Judge Royce Lamberth
announced he would subpoena former Special Trustee Paul Homan to testify about
Babbitt's actions.

Homan, a presidential appointee, quit last week after Babbitt ordered a
reorganization of the trust office, which is in charge of cleaning up nearly
$3 billion in funds held for tribes and individual Indians. Homan, a former
bank executive and federal bank regulator, wasn't consulted about the overhaul
and accused Babbitt of undermining his authority.

``Don't you think Mr. Homan's resignation flies in the face of the secretary's
contention that he's acting in good faith?'' the judge asked government
lawyers.

The Interior Department is being sued over its admitted decades-long
mismanagement of the Indian trust funds, and the government lawyers said
Babbitt's reorganization of the trust office showed he was dealing with the
problem. His actions included reassigning the top recordkeeping official.

``If you've got a football team that isn't winning, sometimes the coach has
got to go,'' said Justice Department lawyer Phillip Brooks. ``The secretary is
entitled to pick his coach, because he's in trouble here and he's entitled to
try and fix it.''

Lamberth last month lost patience with delays in producing canceled checks and
other account records for the lawsuit's five lead plaintiffs and he ordered
the contempt hearing for Babbitt and Treasury Secretary Robert Rubin.

The hearing is expected to take a week. It isn't clear whether Babbitt, who
appears to be the judge's main concern, will be forced to testify.

The funds include 300,000 accounts held by individual Indians worth $500
million and another 2,000 tribal accounts. The lawsuit focuses on the
individual accounts.

The special trustee's office is responsible for handling the money and
improving the accounting system. Leases and other records necessary for
reconciling the accounts are scattered around the country in various Bureau of
Indian Affairs offices.

Homan was appointed to his post in 1995 under a set of congressionally ordered
reforms.

In a letter to the judge, the trust office's advisory board said Homan's
departure would ``undoubtedly curtail progress on the reforms.''

AP-NY-01-11-99 1701EST

Copyright 1998 The Associated Press.  The information  contained in the AP
news report may not be published,  broadcast, rewritten or otherwise
distributed without  prior written authority of The Associated Press.

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