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Washington, DC — A key witness against the federal government in a multi-billion dollar class action lawsuit this week will be one of its own attorneys, according to Public Employees for Environmental Responsibility (PEER). The pivotal testimony will contradict the Interior Department’s central defense that it can accurately account for income from leases it manages on behalf of 300,000 Indian landowners.

Palm Springs Field Solicitor Robert McCarthy is expected to testify on Tuesday, October 23, 2007. He is being called as a witness by the plaintiffs, based on his detailed disclosures documenting “gross mismanagement” of leases by Interior potentially costing Indian landowners millions of dollars every month. The Palm Springs area generates nearly a quarter of all the agency’s Indian trust revenues.

The litigation, Cobell v. Kempthorne, was filed back on June 10, 1996, in the U.S. District Court for the District of Columbia. The court ruled in 1999 that the secretaries of Interior and Treasury had breached their trust obligations to the Indians and ordered Interior to give a complete accounting of all trust funds. The trial, which began on October 10, 2007, will determine whether Interior can provide a fair and accurate accounting and whether it has corrected the fiduciary breaches the court had previously found.

Mr. McCarthy is likely to impeach much of the testimony presented by the government, particularly from James (Jim) Cason, an associate deputy Interior secretary, who testified last week that the agency found no “systemic” errors and that accounting problems “tend to be small, tend to be few, tend to be on both sides of the ledger, and tend to net out against each other.” By contrast, Mr. McCarthy will testify that —

  • He briefed Mr. Cason in 2005 about numerous cases of significant mismanagement and violations of laws, including missing records and failure to collect or account for Indian lease income;
  • Interior officials routinely charged tribal members fees far in excess of those allowed by federal regulations, sometimes as high as $60,000, for transactions that by law may not result in fees more than $500, despite testimony by Cason that Interior does not charge for its management of Indian leases, aside from a “handful” of minor administrative fees; and
  • The electronic system that Interior now uses to track lease payments and transactions has been described by the agency itself as “a data base of misinformation.”

“To the extent that the government is relying upon the credibility of Jim Cason, it is in trouble,” stated PEER Executive Director Jeff Ruch, noting that Cason was brought into Interior by now-imprisoned former Deputy Secretary Steve Griles. “In July, an Interior audit confirmed Robert McCarthy’s charges but the agency continues to ignore repeated verifications that crippling weaknesses still exist.”

On August 9, 2007, one day after Mr. McCarthy notified the agency that he had been identified as a potential witness in the Cobell case, the Solicitor’s Office issued a proposal to fire him, allegedly for disclosing confidential information to a reporter back in April. Two months later, the agency has yet to make a decision on the proposed termination. In that matter, McCarthy is being represented by PEER and the Government Accountability Project, both non-profit groups specializing in whistleblower protection.

Normally a government attorney would be barred from testifying against his or her agency but the fiduciary relationship creates a special duty of loyalty for a lawyer to protect the interests of the beneficiaries of the trust, in this case the Indians, against malfeasance of the trustee, the Interior Department for which Mr. McCarthy still works.


Read about Robert McCarthy and the recent audit confirming his charges

View the government web site displaying testimony from the Cobell case

See the plaintiff web site


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