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For Immediate Release: Feb 26, 2008
Contact: Kirsten Stade (202) 265-7337

SETTLEMENT IN WHISTLEBLOWER CASE OF INTERIOR LAWYER

Robert McCarthy Testified Against Government in Tribal Trust Accounts Trial


Washington, DC — The Office of the Solicitor, U.S. Department of the Interior, and Public Employees for Environmental Responsibility (PEER) and the Government Accountability Project, who represent Robert McCarthy, are jointly issuing the following statement concerning a global settlement that has been reached:

“Mr. Robert McCarthy and the Office of the Solicitor, U.S. Department of the Interior, have jointly come to an agreement that resolves all outstanding cases and controversies between them. Pursuant to the agreement, which is in the best interests of both parties and does not admit any liability or wrongdoing on the part of either party, Mr. McCarthy will end his government service effective February 16, 2008.”

Following his resignation from the Solicitor’s Office, Mr. McCarthy is preparing to assume his duties as the new Managing Attorney of the Oklahoma City Law Office for Legal Aid Services of Oklahoma. Prior to entering government service in 1999, Mr. McCarthy worked for low income legal aid programs for more than a decade, during which time he also directed Indian law clinics at law schools in Washington and Idaho.

On October 23, 2007 Mr. McCarthy was a key witness against the government and his own agency in the multi-billion dollar class action lawsuit Cobell v. Kempthorne. His testimony contradicted the Interior Department’s central defense that it can accurately account for income from leases it manages on behalf of 300,000 Indian landowners:

“Essentially fund collection was on the honor system. The agency depended entirely on the lessee to report how much money it owed, to report any increases because of cost of living increases, to report if it was a percentage of income rental where the lessee would get a percentage of income, they would depend entirely on the lessee to report how much income there was. They had no proactive way of invoicing payments even when they were in default. I saw files that were years in default and no action was taken to issue even default notices, let alone invoices.”

In “Findings of Fact and Conclusions of Law” issued on January 30, 2008, United States District Court Judge James Robertson ruled that Interior is incapable of providing a trust accounting to the Cobell plaintiffs. In his ruling against the government, Judge Robertson echoed McCarthy’s testimony, writing that “…using something like an honor system, Interior simply relied on lease holders to submit accurate, timely payments” (p. 17).

“We could not be happier for Robert McCarthy,” stated PEER Senior Counsel Paula Dinerstein.

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Read about the McCarthy case

See Judge Robertson’s decision in the Cobell case