Andersen and Indian Trials Show Two Faces of Justice | AccountingWEB

Andersen and Indian Trials Show Two Faces of Justice

After its aggressive prosecution of Arthur Andersen for matters involving alleged destruction of records related to the Enron audit, the Department of Justice (DOJ) showed the public a very different face in a case of missing records related to the American Indian trust fund.

The DOJ disagreed with a federal judge's decision to hold the Secretary of the Interior in contempt for failing to comply with a court-ordered request to produce records and resolve long-standing accounting problems associated with the trust fund.

The fund was set up in 1887 to handle proceeds from oil, gas and minerals extracted from 90 million acres of Indian lands that Congress appropriated from Indian tribes. The Indians say the fund was mismanaged and an untold amount of money meant for some of the nation's poorest residents was lost, stolen or never collected.

It is not clear whether the missing records were misplaced or shredded. Both the Interior Department's Bureau of Indian Affairs and the Treasury Department were ordered years ago, during the Clinton administration, to turn over various documents on trust accounts for the original plaintiffs. But only a small number of records have been produced.

As a result, according to the judge's opinion, the agency has been unable to provide an accurate accounting to the majority of the 300,000 trust beneficiaries. Making matters worse, the judge said, both DOJ attorneys and the Interior Secretary have lied to the court about the status of the trust fund reforms, resulting in four specific instances of fraud.

Unlike the Andersen case, no attempt was made to indict the entire Department of Justice and/or Interior despite "lying to the court" and "systemic failure." But the judge said he is considering stripping Interior of its oversight responsibility and appointing an outside trustee instead.

-Rosemary Schlank

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