Associated Press Writer

WASHINGTON — A federal judge should hold new contempt hearings against government officials in a case involving mismanagement of billions of dollars of American Indians’ money, a court-appointed investigator recommended Wednesday.

The judge should decide whether current and former Interior Department officials improperly punished a worker who alleged improper handling of records involved in the case, investigator Alan Balaran recommended.

Justice Department lawyer Phillip Brooks, who handles the case for the government, declined comment Wednesday.

If U.S. District Judge Royce Lamberth agrees to hold a contempt trial, it would be the second in the nearly five-year-old lawsuit, brought on behalf of more than 300,000 Indians with trust accounts managed by the Department of the Interior. The accounts hold proceeds from oil-drilling, timber-cutting, grazing and other uses of the Indians’ land.

Lamberth held former Interior Secretary Bruce Babbitt and former Treasury Secretary Robert Rubin in contempt of court and fined them more than $600,000 in 1999 because of problems in turning over documents.

The government admits that the accounts have been mismanaged for more than a century, with much of the money due the Indians lost, stolen or never collected.

But federal lawyers appealed Lamberth’s 1999 ruling that would force reforms to the system and require the government to account for how much money was lost.

The Indians asked for the new contempt sanctions last year, claiming Interior officials retaliated against a Bureau of Indian Affairs employee who gave sworn testimony in the case and reportedly lost a job opportunity.

Government lawyers contend there was no retaliation.

Balaran has repeatedly cited Interior and Treasury department officials for violating court orders, including waiting for months to notify Lamberth about the inadvertent destruction of records and keeping files in a trash heap on a North Dakota reservation.

In a letter to Brooks, Balaran wrote that witnesses told him government lawyers "publicly call into question my ability to read. . . liken my investigations to those undertaken by television characters. . . (and) insist that I have never practiced law."

Lamberth has not indicated when he will decide whether to hold another contempt trial.