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INTHE UNITED STATES DISTRICT 
ELOUISE PEPION COBELL gt al., 
Plaintiffs, 
V. 
GALE A. NORTON, Secretary of 
the Interior, aA, 
Defendants. 
)
1 
No. 1:96CVO1285 
(Judge Lamberth) 
1 
) 
1 
)
1 
INTERIOR DEFENDANTS’ OBJECTIONS TO “INTERIM” REPORT 
OF THE SPECIAL MASTER REGARDING THE FILING 
OF INTERIOR’S EIGHTH OUARTERLY REPORT 
Interior Defendants respectfully submit the following Objections to the Interim Report of 
the Special Master Regarding the Filing of Interior’s Eighth Quarterly Report (“Interim Report”). 
INTRODUCTION 
On November 5,2002, the Court appointed Special Master Balaran to investigate whether 
Interior Defendants (“Interior”) “withheld information from the Court that should have been 
disclosed in the Eighth Quarterly Report.” November 5,2002 Order at 1. On April 21,2003, 
before his investigation was complete, and before he had given Interior officials a chance to be 
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heard, the Special Master filed his Interim Report, publicizing his not fully investigdted 
“findings.” By the Special Master’s own admission, the Interim Report is based on information 
“obtained outside of normal channels and to which the parties may have no familiarity.” Interim 
Report at 1, n. 1. Interior objects to the Special Master’s unauthorized and secret acquisition of 
evidence during his investigation, and to his reliance upon it in preparing his-Interim Report. 
Interior objects to the filing an interim report as unauthorized. Interim reports, based upon This is the background image for an Adobe Acrobat Capture page with image plus hidden text.  
incomplete investigations, are profoundly unfair to the persons being investigated. Interior 
objects to the preliminary conclusions of the Special Master that Interior withheld information 
from the Court that should have been disclosed in the Eighth Quarterly Report and that the 
information was withheld to deceive the Court about the accuracy of Interior’s previous quarterly 
reports. Neither charge is supported by the evidence in the Interim Report, let alone the evidence 
that the Special Master has failed to consider. 
Interior recommends that this investigation be terminated as unnecessary. If the 
investigation is to continue, the Special Master should not participate because he is tainted by his 
secret acquisition of evidence. No one to whom the secret evidence acquired by the Special 
Master has been communicated should participate in any further proceedings related to this 
investigation. 
BACKGROUND 
On August 30,2002, Native American Industrial Distributors, Inc. (“NAID”), a former 
Interior contractor, filed a motion to intervene in this case, alleging that its contracts with Interior 
had been terminated in retaliation for preparing information related to the Trust Asset and 
Accounting Management System (“TAAMS”) that Interior wished to conceal from the Court. 
On September 24,2002, the Court denied NAID’s motion to interycne I.on procedural grounds. 
On October 7 , 2002, Special Master Balaran wrote a letter to counsel for Interior 
indicating that the “Court directed me to investigate whether the Department of the Lnterior 
withheld any information provided by NAID.” October 7 , 2002 Letter from the Special Master at 
1 (attached as Exhibit A). In the October 7 letter the Special Master requested the 
“administrative records” for the Sixth, Seventh and Eighth Quarterly Reports. October 7 This is the background image for an Adobe Acrobat Capture page with image plus hidden text.  
Letter at 1. By letters of October 9 and 10, 2002, counsel for Interior informed Special Master 
Balaran that Interior was gathering and securing the documents requested in his October 7 Letter, 
but that Interior did not believe that the Special Master had authority to request them, without a 
written order from the Court authorizing his new investigation.’ October 9 & 10,2002 
Letters to Special Master Balaran (attached as Exhibit B). On November 5, 2002,2the Court 
issued an order authorizing Special Master Balaran to investigate NAID’s claims that 
information that should have been disclosed was concealed from the Court in the Eighth 
Quarterly Report. The November 5 Order further directed that “[alt the conclusion of his 
investigation, the Special Master shall file with the Court, with copies to defendants’ and 
plaintiffs’ counsel, his report and recommendation detailing his findings and conclusions.” 
November 5 Order at 1-2. 
Due to the voluminous nature of the collection of documents responsive to the Special 
Master’s October 7 r e q ~ e s t , ~ the Special Master indicated that he would like to examine the 
collection in camera to determine with more specificity which, if any, documents would be 
helpful in his investigation. Consequently, on December 10, 2002, the collection was made 
available for the Special Master’s in camera review. The Special Master’s assistant, Shana 
Greatman, amved at Interior and informed counsel for Interior, an_dthe assembled Interior a- 
1 Interior is unaware of any written record of the initial direction from the Court to Mr. 
Balaran referenced in his October 7, 2002 letter. It appears that the Court instructed Mr. Balaran 
to commence an entirely new investigation in an off-the-record communication. 
3 The handwritten date of the Order is “1 2-5-02,’’ but this is obviously a mistake, as the 
Ordcr was filed on November 5. 
y The collection is contained in three lateral filing cabinet drawers and nine banker’s boxes. 
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employees, including Associate Deputy Secretary James Cason, that the Special Master was busy 
on other issues, but that she would prepare an inventory of the document collection. Ms. 
Greatman took an hour and a half to finish her inventory and announced that the Special Master 
would review her inventory and then get in touch with counsel for Interior with a more targeted 
request for documents. 
Counsel for Interior received no further communication fiom the Special Master related 
to his NAID investigation until the end of January 2003, when he inquired about the status of his 
document requests. Interior’s counsel informed the Special Master by letter of January 29,2003, 
that Interior had been waiting for the more focused request from the Special Master. Letter 
of January 29,2003 (attached as Exhibit C). On January 31,2003, Interior’s counsel informed 
the Special Master that the entire collection would be copied and reviewed for privilege, and that 
it was anticipated that the collection could be given to him on February 14,2003. See Letter of 
January 31,2003 (attached as Exhibit D). 
When it became obvious that the February 14 date for production was unrealistic given 
the large volume of documents that needed to be reviewed for privilege, while Interior was 
simultaneously responding to other requests fiom then Special Master-Monitor Kieffer and 
Plaintiffs, the Special Master asked for, and was given, another opggrtunity to review the 
collection in camera. On February 27, 2003, the Special Master examined the collection of 
requested documents and decided that he wanted to have the entire collection produced to him.4 
Meanwhile, the Special Master sent a series of letters in late March and early April requesting 
The Special Master was accompanied by Mike Smith, an NAID employee, during the 
February 27, 2003 in camera inspection. 
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additional documents and information needed for his investigation. See Letters of March 25, . 
2003; April 2,2003; April 3,2003; April 4,2003 (attached as Exhibit E). With the exception of 
two of the four requests in the April 2,2003 Letter from the Special Maste? -and it is believed 
that most of the documents responsive to these two requests are contained in the collection of 
documents responsive to the initial October 7 request -the Special Master has been given all of 
the documents and information responsive to these supplemental requests. See Letters of April 
7,2003; April 8,2003; April 11,2003 (attached as Exhibit F). On April 4,2003, in the first of a 
projected series of productions, the Special Master was given a batch of documents - totaling 
2,3 10 pages -responsive to his original October 7 request. See Letter of April 4,2003 (attached 
as Exhibit G). 
On April 2 1, 2003, the Special Master filed his Interim Report. The Special Master 
reveals that his investigation is not complete and that he anticipates reviewing the balance of the 
documents that he has requested, taking oral testimony, and considering the comments of the 
parties to his Interim Report before he files a final report. Interim Report at 1 n. 1. The Special 
Master does not explain why he issued a preliminary report before his investigation was 
complete. 
In an extraordinary footnote, the Special Master discloses that his report relies upon -7 
“documentation obtained outside of normal channels and to which the parties may have no 
familiarity.” Id. The Special Master does not reveal in his Interim Report the source of his 
2 These two requests from April 2,2003 are relatud to the sunianiing process for which the 
Special Master indicates that he has not yet received documents. See Interim Report at 31 n.28, 
34 n.30. 
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authority to gather secret evidence or the source of his authority to rely upon this evidence in a 
report to the Court. Interior Defendants are unaware of any such authority. 
The Special Master has attached seventy-three exhibits to his Interim Report. The 
Special Master does not reveal the source and authenticity of many of these exhibits. Some may 
contain privileged information. The Special Master did not give Interior an opportunity to assert 
any privileges before he publicly released the documents, 
THE SPECIAL MASTER’S INTERIM FINDINGS 
The Special Master made many findings in his fifty-five page Interim Report. Some of 
these interim findings are not currently disputed by Interior.6 For example, Interior does not 
dispute that NAID was an Interior contractor who worked primarily on T A W S in 2001. See 
Interim Report at 5-7. Interior does not dispute that it decided to hire an independent consultant 
to evaluate, among other things, the effectiveness of TAAMS. See Interim Report at 13; Seventh 
Quarterly Report at 5, 27. Interior does not dispute that it hired EDS to conduct this evaluation. 
See id. Interior does not dispute that EDS drafted several lengthy reports related to its 
evaluations of and recommendations about TAAMS during October through December 2001, 
including an Observations Report, a For Comments Report, and an EDS Interim Report. See 
Interim Report at 13-20. These reports were mostly critical of TA;AMS and recommended that --=-- 
the Realty and Accounting portion of TAAMS be deferred (the title portion of TAAMS was 
recommended to continue). EDS Reports. Interior does not dispute that the TAAMS Project 
Because the investigation is not complete, Interior reserves the right to modify its position 
on which facts and conclusions are in dispute as additional facts become available. 
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Team’ provided comments on the EDS draft reports. See, e.g., Interim Report at 13-20. Some of 
the Project Team’s comments were incorporated or addressed in later drafts of the EDS reports. 
See id. at 19-20. Interior informed the Court that it had “engaged Electronic Data Systems 
Corporation (EDS) to provide an independent analysis of the TAAMS project and the associated 
BIA data cleanup effort.” Seventh Quarterly Report at 5 . Lnterior provided EDS reports to the 
Court. See Motion to Permit Filing Modified Form of Trust Reform Status Report for the Period 
Ending October 31,2001 (filed November 26,2001); Eighth Quarterly Report. Interior informed 
the Court that it was going to adopt many of EDS’s recommendations regarding TAAMS. See, 
s,Eighth Quarterly Report at 14, 15, 121. 
Interim Findinm in Dispute 
Many of the Special Master’s interim findings of fact are simply not supported by the 
evidence - including the secret evidence -provided in the Interim Report. The preliminary 
conclusions drawn from his inaccurate findings of fact are also mistaken, and unsupported. 
On pages 2 and 3 of his Interim Report, the Special Master presents his preliminary 
findings, the basis for which he then discusses in the body of the Interim Report. As noted 
above, the Special Master bases his preliminary findings not on the full documentary record, but 
primarily on documents that he obtained “outside of normal cham-els” and with which Interior 4-. 
“may have no familiarity.” Interim Report at 1 n.1. Moreover, the Special Master makes 
3 Throughout his report, the Special Master repeatedly refers to “NAD and the TAAMS 
Project Team” as if NAID had a status and role independent of the Project Team, and as if its 
views were deserving of attention and comment separate from those of the Project Team. This is 
misleading. NALD was a contractor hired by the BIA to assist the Project Team and it 
participated in the events described in the Interim Report as a member of the team. Accordingly, 
in this response, Lnterior will use the phrase “Project Team” to refer to the T M M S Project Team 
as a whole, including NALD. 
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preliminary findings about the motivation and intent of persons at Interior and EDS who were 
involved in the events described in the Interim Report without aslung any of those persons their 
versions of the events or what their motivation and intent was. 
Each of the Special Master’s preliminary findings is stated and discussed below. Interior 
has had only ten business days to prepare these objections while engaged in preparing for the 
Phase 1.5 trial, which began on May 1. Interior thus respectfully reserves the right to supplement 
its response as more information is gathered. This is Interior’s preliminary response to the 
Special Master’s preliminary findings. It is not intended to be a response to every fact, 
allegation, speculation or aspersion asserted by the Special Master; and Interior’s failure to 
comment on any particular assertion shall not be interpreted as agreement with that assertion. 
Preliminary Finding No. 1. 
“Interior withheld material information from the Court in the Status Report to the 
Court Number Eight ...to conceal infirmities in the TAAMS system and misleading 
and inaccurate representations in previous quarterly submissions.” Interim Report 
at 2. 
Interior denies this allegation. 
The Special Master identifies several pieces of information that he claims were withheld 
from the Eighth Quarterly Report for the purpose of concealing from the Court certain d-­ 
“infirmities in the TAAMS system” or certain “misleading and inaccurate representations in 
previous quarterly submissions.’’ Interim Report at 2 . First, in many cases, the information, or 
its substantial equivalent, that the Special Master claims was omitted was included in the Eighth 
Quarterly Report. Second, in those cases where the information was omitted, the information 
was not necessary to present an accurate description of the “steps taken” by Interior during the 
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reporting period to bring itself into compliance with its obligations. Third, there is no evidence 
that the information was deliberately withheld so as to mislead the Court as to the accuracy of the 
previous quarterly reports, which were the subject of contempt proceedings at the time the Eighth 
Quarterly Report was prepared and filed with the Court. The Special Master’s bottom line 
contention that Interior withheld information “to conceal adverse information that undoubtedly 
would have been introduced in the contempt trial that commenced on December 10, 1991,” 
Interim Report at 46, is inaccurate. 
In evaluating whether material information was withheld from the Eighth Quarterly 
Report, it is important to keep in mind the purpose of the quarterly reports. The Court ordered 
Interior to file quarterly reports for the purpose of “setting forth and explaining the steps” that 
Interior has taken to bring itself into compliance with its obligations to plaintiffs, as declared by 
the Court. Cobell v. Babbitt, 91 F. Supp. 2d 1, 59 (D.D.C. 1999). “Each quarterly report shall be 
limited, to the extent practical, to actions taken since the issuance of the preceding quarterly 
report.” Id. 
The Project Team, upon whose opinions the Special Master uncritically relies, was 
responsible for the implementation of TAAMS and had prepared the reports on TAAMS that 
were included in the previous quarterly reports. It is those reportsJhat were the subject of the 4- 
contempt proceedings and that the Court ultimately found misleading. 
The EDS assessment of TAAMS was sharply critical of the implementation effort led by 
the Project Team and recommended that sisnificant portions of that effort be deferred until 
Interior could better understand and document the business processes TAAMS was intended to 
serve. EDS ’s first report, the Observations Report, contained preliminary findings about the 
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status of TAAMS and the related BIA Data Cleanup Project. While the Project Team believed 
“[tlhe report contains several observations and findings that are not supported,” it subsequently 
acknowledged that EDS “does not identify any problems that we did not know about and make 
known to EDS to support their efforts.” Interim Report at 14, 16, 18. In other words, the Project 
Team agreed that EDS had, with their help, accurately identified the core problems that the 
implementation effort was facing. Its principal concern was that EDS “neither acknowledges nor 
gives credit for activities already begun to address problems”- &,the activities that the Project 
Team was undertaking to address the problems. Interim Report at 18. 
EDS’s second report, the For Comments Report, contained-forty-six recommendations on 
all aspects of the TAAMS/BIA Data Cleanup. While the Project Team did not believe that 
“[slufficient time was . . . allotted to fully review and reach consensus on comments to the 
report,” it nevertheless prepared a twenty-two page document giving its views on all forty-six of 
the recommendations. See Interim Report, Exhibit 28 at 1. EDS’s recommendations were based 
on and grew out of the findings in the Observation Report. The Project Team concurred with 
twelve of the recommendations; concurred with comment with thirty-one of the 
recommendations; and non-concurred with three of the recommendations. 
The principal recommendation in which the Project Team _n_on-concurredwas the d - 
recommendation to “Defer Realty and Accounting Functionality.” Interim Report, Exhibit 28 at 
1. This recommendation was the one that reflected most poorly on the implementation efforts of 
the Project Team and the one in which NAID had a direct financial interest. NAID surely 
understood that if this recommendation were adopted, the need for its services would be sliai-ply 
reduced. 
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The TAAMS portion of the Eighth Quarterly Report, the accuracy or adequacy of which 
is challenged by the Special Master, was drafted by the Project Team (with NAID as the principal 
draftsman), not by other Interior officials. See Interim Report at 38, Exhibit 63. The Eighth 
Quarterly Report was presented to the Court during the contempt trial and was relied upon by the 
Court in deciding that the earlier quarterly reports were misleading. The Court noted that the 
Eighth Quarterly Report made “three important concessions.~’Cobell v. Norton, 226 F. Supp. 2d 
1,84 (D.D.C. 2002). First, it conceded that “the previous seven reports did not provide the Court 
with a sufficiently detailed or objective assessment of trust reform.” Id. Second, it 
“acknowledged that the Department now considers the HLIP, the plan by which trust 
management reform progress was measured and reported to the Court in the past, to be obsolete.” 
-Id. at 85. Third, it “noted that the Eighth Report ‘marks the beginning of the transition from a 
narrow, non-integrated, task oriented set of activities related to trust reform, to an integrated, goal 
focused approach to managing and accounting for trust assets.’” Id.(quoting Eighth Quarterly 
Report). 
The Special Master’s Interim Report paints the Project Team, and especially NAID, as the 
good guys who are seeking to tell the Court the truth about TAAMS, and certain unnamed 
Interior officials as the bad guys who are seeking to thwart that effort. While the Special Master -47 
does not hesitate to ascribe bad motives to the unnamed Interior officials without even taking 
their testimony, he is surprisingly silent about the possible motives of NAID. NAID, after all, 
lost a multi-million dollar contract as a result of Interior’s adoption of the recommendations of 
the EDS study and its current allegations of suppressed information should be viewed in that 
light. 
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An examination of each piece of information that the Special Master claims was withheld 
from the Eighth Quarterly Report does not support his conclusions. 
1. Interior “excluded the concerns raised by the draft December 2001 Risk 
Assessment.” Interim Report at 46. 
The Project Team did not recommend that “the concerns raised by the draft December 
2001 Risk Assessment” be included in the Eighth Quarterly Report, only to have someone else at 
Interior decide to exclude them. The Project Team, which drafted the TAAMS portion of the 
Eighth Quarterly Report, never suggested that the information from the Risk Assessment be 
included in the Eighth Quarterly Report. Interim Report, Exhibit 63. 
2. Interior “ignored 32 of the 47 comments offered by the TAAMS Team on 
October 23,2001 to the Observations Report.” Interim Report at 47. 
The Project Team did not recommend that their forty-seven comments on the EDS 
Observations Report be included in the Eighth Quarterly Report. Interim Report, Exhibit 63. 
Significantly, the November 30 draft of the Eighth Quarterly Report, which the Special Master 
endorses as satisfactory, did not include this information. 
3. Interior “never apprised the Court. ..that milestones in use for the first seven 
quarterly reports did ‘not accurately reflect the status of TAAMS at the current summary 
level.”’ Interim Report at 48. 
This criticism of the milestones “in use for the first seven quarterly reports” was not 
-4 -. 
omitted from the Eighth Quarterly Report. The Eighth Quarterly Report concedes the 
deficiencies of the milestones as reporting tools. Eighth Quarterly Report at 3-5, 7 . As noted 
above, the Court was aware of this concession and relied upon it in finding that the first seven 
quarterly reports were misleading. 
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4. Interior “never apprised the Court. ..that ...‘[tlhe EDS recommendation to 
defer all work on Realty and Accounting would disrupt current plans as described in this 
quarterly report.” Interim Report at 48. 
The obvious point that deferral of “Realty and Accounting” would result in some delay in 
the implementation of TAAMS was not omitted from the Eighth Quarterly Report. The Eighth 
Quarterly Report states: Consistent with EDS’s recommendation, “Interior. . . is deferring realty 
and accounting functionality until the business processes are documented and defined. This 
delay will enable full definition of requirements for the automated system and is in conformance 
with recommendations by both the General Accounting Office (GAO) and Congress.” Id.at 121. 
5. The “Court was never apprised.. .of the concern that ‘documented and fully 
traceable security requirements have not been developed to assure that the implemented 
security mechanisms are based on an engineered analysis of trust data needs, regional 
concerns, threat environment, or applicable laws;” that ‘[tlhree sites are not ready for 
deployment because their users have not completed the required security packages or 
passed initial screening;”’ and that ‘[olne site is not ready for deployment because the 
computers designated for TAAMS do not meet minimum requirements.’’’ Interim Report 
at 48. 
Security concerns about TAAMS were not omitted from the Eighth Quarterly Report. 
There is extensive discussion in the Eighth Quarterly Report, beyond even what the Special 
Master cites, of security issues involving TAAMS. Eighth Quarterly Report at 42,47,48, 123. 
EDS’s concerns about security were more serious than simply the fact that certain sites had “not 
completed the required security packages.” Interim Report at 48. =7 
Interior had also previously informed the Court about the security concerns of TAAMS 
when it filed the November 12,2001 EDS report entitied “Interim Information Assurance Report 
and Roadmap for TAAMS and BIA Data Cleanup,” on November 20,2001. Because this report 
contained sensitive security information, it was filed under seal. See Motion to File Portions of 
EDS Report Under Seal (filed November 20, 2001). 
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6. “Interior never apprised the Court the Interim Report was ‘a subjective 
assessment based on interviews with a wide audience with varying degrees of 
understanding of the true state of TAAMS.”’ Interim Report at 48. 
Although the January 10 outline of the TAAMS portion of the Eighth Quarterly Report 
that was prepared by NAID for the Project Team contained this comment, it was immaterial 
information, unnecessary for an accurate description of the “steps taken” by Interior to bring 
itself into compliance with its obligations during the reporting period. The “steps taken” were 
the completion of the EDS study and the adoption of its recommendations by Interior. Those 
steps were fully disclosed to the Court. Moreover, a detailed description of EDS’s assessment 
process was provided to the Court in EDS’s Interim Report, including the fact that information 
was gathered through interviews, which are necessarily somewhat subjective. EDS Interim 
Report at 36-37. 
7. “Interior undertook to conceal from the Court that ‘efforts were already in 
progress to develop and standardize business models and processes to the maximum extent 
possible but were hindered by lack of management support,’ and ‘efforts were already 
underway to improve the requirements determination and gathering process but were 
hindered by lack of management support.”’ Interim Report at 48-49. 
This criticism about the lack of management support for certain TAAMS initiatives was 
not omitted from the Eighth Quarterly Report. The Eighth Quarterly Report lists, under 
“Problems, Issues and Concerns,” the following: Inadequate resources, s,suitable staffing that 
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dedicated to the project; need for establishment of consistent project management; and lack of 
universal accountability and support for Trust Reform efforts. Eighth Quarterly Report at 123. 
The EDS Interim Report, which was filed with the Court, also comments on this problem. 
Indeed, it was recognition of this problem that underpinned EDS’s recommendation that a single 
executive sponsor be appointed for TAAMS. 
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8. “Noticeably absent.. .was the observation that EDS’ ‘recommendation to 
accelerate deployment of TAAMS title and defer realty and accounting functionality lacks 
vision and understanding.”’ Interim Report at 49. 
Although the January 10 outline of the TAAMS portion of the Eighth Quarterly Report 
that was prepared by NAID for the Project Team contained this comment, this information was 
immaterial and unnecessary for an accurate description of the “steps taken” by Interior during the 
reporting period to bring itself into compliance with its obligations. The “steps taken” were the 
completion of the EDS study and Interior’s adoption of its recommendations. Those steps were 
fully disclosed to the Court. Interior was not obliged to include in the Eighth Quarterly Report 
every comment and criticism about EDS’s study that it received from its employees and 
contractors in the course of its deliberations about whether to adopt EDS’srecommendations. 
There is no evidence that the information was deliberately withheld so as to mislead the Court as 
to the accuracy of the previous quarterly reports. This criticism of EDS’srecommendation, even 
if valid - which Interior does not concede -had nothing to do with the accuracy of previous 
quarterly reports. 
9. “Interior offered the pithy analysis of the Deputy Speciat Trustee” rather than 
NAID’s “detailed contribution to the ‘Comments on EDS & Special Trustee Observations’ 
section.” Interim Report at 50. 
NAID’s comments on EDS were omitted from the Eighth Quarterly Report. The January 
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10 outline of the TAAMS portion of the Eighth Report that was prepared by NAID for the 
Project Team contained “NAID’s ‘detailed contribution.”’ See Interim Report at 38. This 
information, however was not material. It was unnecessary information for an accurate 
description of the “steps taken” by Interior during the reporting period to bring itself into 
compliance with its obligations. The “steps taken” were the completion of the EDS study and 
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Interior’s adoption of its recommendations. Again, those steps were fully disclosed to the Court. 
Interior was not obliged to include in the Eighth Quarterly Report every comment and criticism 
on EDS’s study that it received from its employees in the course of its deliberations about 
whether to adopt EDS’s recommendations. There is no evidence that the information was 
deliberately withheld so as to mislead the Court as to the accuracy of the previous quarterly 
reports. NAID’s criticism of EDS’s study, even if valid -which Interior disputes -had nothing 
to do with the accuracy of previous quarterly reports. If anything, it emphasized the positive 
about the TAAMS implementation effort in the same way that the Court found so objectionable 
in its findings about the accuracy of the previous seven quarterly reports. Even at the late date of 
January 10,2002, two months after Interior had adopted EDS’s deferral recommendation, NAID, 
by seeking to include its criticism of EDS in the Eighth Quarterly Report, was still trying to 
convince people that if Lnterior would just give it more money and time it could succeed in 
implementing TAAMS. 
It should be noted here that the rest of the Special Master’s preliminary findings are 
dependent on his claim that material information was deliberately withheld from the Eighth 
Quarterly Report to deceive the Court. As no material information was withheld from the Court 
for that purpose, the rest of the Special Master’s preliminary findings are moot. His charge from 
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the Court was to ascertain whether “Interior withheld information from the Court that should 
have been disclosed in the Eighth Quarterly Report,” not to examine the peripheral issues that are 
the subject of his other preliminary findings. Interim Report at 1-2. Interior will nonetheless 
briefly comment on each of them. 
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Preliminary Finding No. 2. 
“Interior’s last-minute attempt to substitute the November 12 Interim Report 
generated by [EDS] for the High Level Implementation Plan (HL1P)-driven Eighth 
Quarterly Report, generated by NAID and the TAAMS Project Team, was part of 
this plan.’’ Interim Report at 2. 
Interior denies this allegation. As noted above, there was no plan or effort to conceal 
from the Court TAAMS ’s infirmities or allegedly misleading and inaccurate representations in 
previous quarterly reports. An effort was made to substitute the November 12 EDS Interim 
Report for the regular HLP-driven quarterly report because Interior believed that EDS’s Interim 
Report would provide the Court with a current, comprehensive, and detailed report on the status 
of TAAMS by an independent third party. As the EDS Interim Report was critical of TAAMS, 
and at odds with some of the information about TAAMS provided in previous quarterly reports, 
it was hardly the sort of report that Interior would want to file with the Court if its purpose had 
been to conceal TAAMS infirmities or the inaccuracy of previously quarterly reports. Indeed, the 
“(HLIP)-driven” report “generated by NAID and the TAAMS Project Team” on November 30 
presented a rosier picture of TAAMS and thus would have been more suitable to present to the 
Court if Interior had been acting with the motive ascribed to it by the Special Master. In other 
words, contrary to the Special Master’s allegation, it is obvious that Interior’s purpose in seeking 
to substitute the EDS report for the regular quarterly report was nBfo conceal information about 
TAAMS from the Court, but, rather, to reveal all that it knew as a result of the EDS study, even 
though that information presented a somewhat different picture of T A M S than had been 
reported in previous quarterly submissions. 
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Preliminary Finding No. 3. 
“[Nleither the Final January Eighth Quarterly Report, nor the Interim Report upon 
which it relied, was designed to provide the Court with a candid assessment of the 
TAAMS effort. Rather, they were contrived to present a gilded portrait of the 
TAAMS system and avoid adverse consequences arising from contempt proceedings 
pending at the time.” Interim Report at 2. 
Interior denies this allegation. Both the Interim Report and the Eighth Quarterly Report 
were specifically designed to give the Court a clearer picture about TAAMS. Rather than present 
a “gilded portrait,” both documents present facts so critical of TAAMS that they justify the 
decision to put the implementation of major components of it on hold. 
As noted above, EDS was hired to do an independent study-of TAAMS so that senior 
Interior officials could get answers to their questions about its true status. Over the course of 
several months, EDS conducted over eighty interviews of people with knowledge about TAAMS 
and reviewed thousands of pages of documents. A list of the interviewees and a list of the 
documents reviewed are attached as Exhibits H and I, respectively. In addition, EDS solicited 
and received substantial comments from the Project Team and others on the two reports that 
formed the basis of its Interim Report. 
The Special Master seeks to discredit this process, and the EDS Interim Report it was 
based upon, by asserting (without ever giving EDS a chance to be heard) that EDS lied about the 
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process it followed in generating its reports. See Interim Report at 52-53. The Special Master’s 
assertions are simply wrong. First, the Special Master claims, based upon deposition testimony 
of an EDS employee, that EDS did not interview Interior employees when performing its 
TAAMS assessment. See Interim Report at 52. But as is clear even from the quotation included 
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in the Interim Report, the EDS testimony referred to the AS-IS business modeling work sessions, 
not the TAAMS assessment. Interim Report at 53 & Exhibit 70. 
Second, the Special Master claims that EDS did not interview “key stakeholders.” See 
Interim Report at 5 1-52. Again, as the material quoted in the Interim Report makes clear, the 
Special Master was relying on testimony about the AS-IS process, not the TAAMS assessment. 
A list of the “key stakeholders” interviewed in the TAAMS assessment is attached as Exhibit J. 
Third, the Special Master claims that EDS did not “independently determine the 
invitation list of who went to these meetings” to be interviewed. Interim Report at 53. Again, 
the Special Master is relying on testimony about the AS-IS process, not the TAAMS assessment. 
Finally, the Special Master claims that “EDS’s representation that it ‘utilized objective 
references for its reviews such as EDS’ Project Management Health Check PLUS’ is 
unsupported.” Interim Report at 53. While this representation may be “unsupported” in the 
limited record the Special Master examined, that does not mean that it is unsupportable. To 
determine that, the Special Master should give EDS a chance to be heard. Interior does not have 
sufficient information on Project Management Health Check PLUS at this time to comment. 
With respect to the design of the Eighth Quarterly Report, the Report itself explains in 
detail the need for changes in Interior’s reporting format and the changes that were adopted for 
-47 
the first time in the Eighth Report. See Eighth Quarterly Report at 3-5. The Department had 
concluded that the HLP-driven reporting format had “become increasingly disconnected from 
the overall objectives of trust reform” and that reports based on the HLIP milestones did “not 
reflect the true status of trust reform.” Id.at 4. Interior noted that: 
the format of the HLIP did not encourage reporting on lack of success or the need 
for additional resources or efforts. In contrast, [the 8‘hReport] covers matters in 
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addition to the status of the subprojects. Subproject managers have been asked to 
discuss obstacles, resource needs, and whether they know at this time the fill 
extent of the endeavor required. These matters are important for an accurate 
picture of the state of trust reform. 
-Id. at 5. 
The Special Master does not even attempt to explain his assertion that this new reporting 
format is somehow not “designed to provide the Court with a candid assessment of the TAAMS 
effort.” Interim Report at 2. He just makes the bafd, unsupported claim. He is wrong. 
Preliminary Finding No. 4. 
The findings of EDS about TAAMS were “unsupportable” and prepared by an 
organization “with a fledgling grasp of the complexities-of the TAAMS system.” 
Interim Report at 2. 
Interior denies this allegation. It is a misstatement of the facts by the Special Master that 
recklessly tarnishes EDS’s reputation in an effort to discredit Interior and that is refuted by the 
documents the Special Master cites in his Interim Report. The Special Master notes that the 
TAAMS Project Team stated, with reference to EDS’s findings in its Observations Report, that 
EDS did “not identify any problems that we did not know about and make known to EDS to 
support their efforts.” Interim Report at 18. This demonstrates that EDS’s core findings about 
the problems with TAAMS were essentially accurate (indeed, according to the Project Team, the 
problems identified were apparently based on information providemy the Team). In addition, as 
the Special Master notes, the TAAMS Project team stated that “[dlespite the flaws in [EDS’s For 
Comments report,] the TAAMS review team concurred with the majority of the 
recommendations.”8 Interim Report at 39. It should be noted that this is a bit of an 
4 It is worth noting here that NAID, in a pleading filed with the Court, claimed that the 
assertion that “the TAAMS review team concurred with the majority of the recommendations” is 
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understatement. Of the forty-six recommendations mads by EDS, the Project Team concurred 
with twelve, and concurred with comment on an additional thiryt-one, for a total of forty-three 
concurrences. Interim Report, Exhibit 28, at 2-22. As all of the recommendations were based on 
and grew out of EDS’s findings, it is difficult to understand how the Special Master can assert 
that the findings of EDS about TAAMS were “unsupportable.” EDS must have got something 
right or the Project Team presumably would not have concurred in 93% of EDS’s 
recommendations. 
Interior did not hire EDS because EDS purported to have a “grasp of the complexities of 
the TAAMS system.” Interim Report at 2. Senior officials hired EDS to do an independent 
review of the status of TAAMS because they were concerned about the quality of the information 
that they were getting from the persons who purported to have a grasp of the complexities. 
Moreover, by the time EDS prepared its Interim Report, EDS did, in fact, have a firm grasp of 
the complexities. It had studied TAAMS for over four months, during the course of which it 
interviewed over eighty people, reviewed thousands of documents, and sought and received 
feedback on both its findings and its recommendations before publishing its Interim Report. 
EDS’s grasp of the complexities after completing its assessment process is amply demonstrated 
by the fact that it was able to formulate forty-six specific recommendations about practically 
-. 
every aspect of TAAMS/BLA Data Cleanup, 93% of which were concurred in by the TAAMS 
Project Team, whose credentials on the subject of TAAMS the Special Master views as 
impeccable. 
“blatantly false.” NALD’s Motion For Temporary Restraining Order at 8 (filed August 30, 2002). 
The assertion, however, is a direct quote taken from the outline NAID prepared for the Project 
Team of the TAAMS portion of the Eighth Quarterly Report. Iiiterim Report at 39. 
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Preliminary Finding No. 5. 
“When NAID and the TAAMS Project Team repeatedly exposed ‘inaccurate’ 
representations in draft versions of the Eighth Quarterly Report, Interior modified 
the reporting process and substituted NAID’s particularized findings for the more 
vague observations of EDS.” Interim Report at 3. 
Interior denies this allegation. The basic drafts of the TAAMS portion of the Eighth 
Quarterly Report were prepared by the Project Team (with NAID itself as the principal 
draftsman), not by someone else on whose drafts the Project Team was then asked to comment, 
and whose inaccuracies it repeatedly exposed. As the Project Team did not repeatedly “expose 
inaccurate representations in the draft versions,” it follows that Interior did not “modify its 
reporting process” or replace NAID’s findings with those of EDS as a result of those exposures. 
Interior modified its reporting process for the reasons stated on pages 3-5 of the Eighth 
Quarterly Report. Interior had become convinced that the HLIP-driven reporting system had 
served its purpose and was no longer facilitating fully accurate reporting on the “true status of 
trust reform.” Eighth Quarterly Report at 4. Further, it is wrong to charge that in place of 
“NAID’s particularized findings” (Interim Report at 3) “Interior offered the Court a list of 12 
‘Problems, Issues and Concerns.”’ Interim Report at 49. That list, which the Special Master 
characterizes as “the more vague observations of EDS” (Interim Report at 3), is taken directly 
from the outline of the TAAMS portion of the Eighth Quarterly REport that was prepared by 
NAID for the Project Team. See Interim Report, Exhibit 63. 
Preliminary Finding No. 6. 
“When NAID and the TAAMS Project Team criticized the first EDS report as 
‘lacking vision and substance,’ Interior accelerated the production of the EDS 
Interim Report to preempt inclusion of similar comments.” Interim Report at 3. 
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Interior denies this allegation. The Project Team did not criticize “the first EDS report,” 
which was the Observations Report issued on October 10,2001, as “lacking vision and 
substance.” Nor did the Project Team criticize the second EDS report, which was the For 
Comments Report issued on October 31, 2001, as “lacking vision and substance.” Instead, it 
criticized just one of the forty-six recommendations in the second EDS report as “lacking in 
vision and understanding.” Interim Report at 39. 
The EDS Interim Report was published just two days early -November 12 instead of 
November 14 -and this did not prevent EDS from receiving or taking into account the comments 
of the Project Team. EDS had a lengthy teleconference with the Project Team on November 8 to 
discuss their concerns about the For Comments Report, and the Project Team submitted twentytwo 
pages of comments on the report on that date. Those comments, as explained above, were 
overwhelmingly favorable and concurred in 93% of EDS ’s recommendations. 
Thus, the Special Master is wrong in asserting that the “acceleration” of the issuance of 
the Interim Report “ensured the 22 pages of comments emerging from the Phoenix conference 
would not be incorporated in the Interim Report or reflected in the Final January Eighth 
Quarterly Report.” Interim Report at 47. EDS had four days to take them into account when 
preparing its Interim Report, and Interior, through the instrumentality of the Project Team, had 
-4-7 
over two months to consider whether it was necessary or appropriate to have them reflected in 
the Eighth Quarterly Report. The two day “acceleration” of the issuance of EDS’s Interim 
Report had no bearing whatsoever on that decision. 
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Preliminary Finding No. 7. 
%terior attempted to substitute an incomplete EDS report for one thoroughly 
reviewed and commented upon by NAID and other TAAMS experts.” Interim 
Report at 3. 
Interior denies this allegation. Interior sought the Court’s permission to substitute the 
Interim Report of EDS for the regular quarterly report because it wanted the Court to have in its 
entirety a current, comprehensive and detailed assessment of TAAMS by an independent third 
party that had no vested interest in TAAMS. Senior officials at Interior wanted to make a full 
disclosure to the Court of what they had learned from EDS about the status of TAAMS so they 
would not be accused (as the Special Master now ironically does) of hiding criticism of TAAMS 
from the Court. 
Moreover, the Project Team had an opportunity to review and comment on the two EDS 
reports that were used as the basis for the EDS Interim Report. It is thus wrong for the Special 
Master to seek to leave the impression that the proposed quarterly report was “thoroughly 
reviewed and commented on” by the Project Team while EDS’s report was not. The Project 
Team produced fourteen pages of comments on the Observations Report and, although the 
Project Team would have preferred to have more time to comment on the For Comments Report, 
it nonetheless produced twenty-two pages of comments on it. The bottom line of those 
-4= 
comments was that the Project Team concurred with 93% of the report’s recommendations. In 
addition, the Project Team participated in a teleconference with EDS and others on November 8 
that lasted several hours. 
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Preliminary Finding No. 8. 
“When the Court rejected this subterfuge, the agency filed a Final January Eighth 
Quarterly Report omitting all criticism of the TAAMS project, EDS, and previous 
quarterly submissions.” Interim Report at 3. 
Interior denies this allegation. As explained above, the attempt to file EDS’s Interim 
Report with the Court in place of the regular quarterly report was not a subterfuge designed to 
hide criticism of TAAMS from the Court. Rather, it was an attempt to share with the Court in its 
entirety a current, comprehensive and detailed assessment of TAAMS by an independent third 
party that had no vested interest in TAAMS. 
The Special Master is wrong in asserting that the Eighth Quarterly Report omitted “all 
criticism of the TAAMS project.” The Eighth Report listed thirteen “Problems, Issues and 
Concerns” with TAAMS. Eighth Quarterly Report at 123. In addition, it included critical 
observations about TAAMS by EDS, the Special Trustee and the Deputy Special Trustee. Id.at 
124-127. Moreover, Interior provided the Court with EDS’s Interim Report, which contains 
sixty pages of Detailed Findings about the status of TAAMS and the related BIA Data Cleanup 
Project. 
The Special Master is also wrong in asserting that the Eighth Quarterly Report omitted all 
criticism of “previous quarterly submissions.” As the Court recognized in its September 17, 
- 
2002 opinion on the contempt charges, the Eighth Quarterly Report conceded that “the previous 
seven reports did not provide the Court with a sufficiently detailed or objective assessment of 
trust reform.’’ Cobell, 226 F. Supp. 2d at 84. 
While it is true that the Eighth Quarterly Report does not include comments prepared by 
the Project Team criticizing portions of EDS’s assessment of TAAMS, that is not an appropriate 
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basis for criticizing Interior. Quarterly reports are required to report the steps taken by Interior 
during the relevant quarter to bring itself into compliance with its obligations, as declared by the 
Court. Interior reported that it had employed EDS to do an independent assessment of TAAMS, 
gave the results of that assessment and explained which of EDS’s recommendations it had 
adopted. Interior was not required to report every objection or criticism that was made in the 
course of its deliberations about whether to accept the recommendations of the EDS study. As 
explained more fully in the response to the Preliminary Finding No. 1 above, the Special 
Master’s suggestion that this deliberative information was improperly withheld from the Court is 
wrong.g 
Curiously, the Special Master (Interim Report at 45) takes an argument from a document 
filed on November 15,2001 - the Consolidated Opposition to Plaintiffs’ August 27, 2001 and 
October 19,2001 Motions for Orders to Show Cause Why Interior Defendants and Their 
Employees and Counsel Should Not Be Held in Contempt - and reaches the conclusion that the 
argument conflicted with a document not filed until two months later, January 16, 2002 -the 
Eighth Quarterly Report. The argument from the Consolidated Opposition addressed Plaintiffs’ 
motions, which themselves addressed events that necessarily had occurred prior to October 19, 
2001, when their last motion was filed. Defendants’ argument f a 3 7 characterized the record and 
responded to Plaintiffs’ pending motions: 
[wlhile any review can -with the benefit of hindsight -reveal problems that DO1 
might have better foreseen or communications that might been more clearly 
worded, this is quite different fiom suggesting that alleged defects in the 
submissions warrant contempt. In fact, the plain language of DOI’s submissions 
communicated the major problems encountered with TAAMS development in a 
manner that was accurate and in keeping with the Court’s order. 
Consolidated Opposition at 43. 
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DISCUSSION 
I. THE SPECIAL MASTER HAS NO AUTHORITY TO ISSUE AN INTERIM 
REPORT 
Interior objects to the filing of an interim report by Special Master Balaran. Special 
masters are not granted the authority to issue preliminary reports in Fed. R. Civ. P. 53, the rule 
governing the appointment and powers of special masters.” 
Absent express authority in Rule 53, a special master’s powers are conferred, and 
circumscribed, by the order appointing him. Fed. R. Civ. P. 53(c). The Special Master’s 
premature explication of the documents, and secret evidence, gathered thus ,far is not authorized 
by the November 5 , 2002 Order.’’ To the contrary, the November 5 Order directs that “[alt the 
conclusion of his investigation, the Special Master shall file with the Court, with copies to 
defendants’ and plaintiffs’ counsel, his report and recommendation detailing his findings and 
conclusions.” November 5 Order at 1-2 (emphasis added). The Special Master, by his own 
admission, has not concluded his investigation. He still intends to review additional documents 
and take oral testimony. hterim Report at 1 n. 1. 
i i ~ Rule 53(e)(5) permits a special master to prepare a draft report and submit such a report 
to counsel for the parties for comment before filing with a court. Interior believes that it would 
have been inappropriate to submit to the parties any draft of an interim report before the 
investigation was concluded. However, for reasons unknown to Interior, the Special Master did 
not even follow Rule 53(e)(5). Instead, he filed his preliminary report with the Court and then 
invited comment from the parties. Interim Report at 1 n. 1. 
ili The authority to issue interim reports is also not expressly authorized in any of the other 
appointment orders regarding Special Master Balaran. Orders of Fcbruary 24, 1999, August 
12, 1999, and September 17,2002. 
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It is thus unclear how the Special Master concluded that he possessed authority to issue 
an “interim” report prior to the conclusion of his investigation.” The only purported authority 
cited by the Special Master for filing an interim report is a Note published in 1991 in the New 
York University Law Review. See Interim Report at 1 n. 1. Curiously, the Special Master does 
not reveal that the excerpt from this Note quoted in his Interim Report purporting to authorize 
comments on interim reports relates to the Note author’s proposed new Federal Rule of Civil 
Procedure (denominated by the author as Rule 53.1) to govern the activities of special masters. 
-See Note, Rule 53, Inherent Powers, and Institutional Reform: The Lack of Limits on Special 
Masters, 66 N.Y.U. L. Rev. 800, 846 (1991).13 In addition, the interim reports to be authorized 
by the Note’s proposed rule are solely limited to reports on the status of the investigation. Id.at 
846. The interim reports contemplated by the Note’s author are not intended to contain 
preliminary findings and conclusions. See id. 
In any event, the author does not suggest that special masters have the authority currently, 
in the absence of adoption of his proposed rule, to issue interim reports, especially where no such 
authority is granted in the order of reference. Indeed, the Note reiterates that the authority of 
special masters is constrained by their order of reference. Id-at 805 (the order of reference 
defines “the boundaries of her activities”). To our knowledge, the law review author’s Rule 53.1 
-47 
1y He may have simply decided to issue an interim report on his own. Alternatively, the 
Court may have directed the Special Master to issue an interim report at this time in an ex parte 
“logistical” meeting with the Special Master (seeCobell v. Norton, 237 F. Supp. 2d 71, 89-90 
(D.D.C. 2003)). In any event, there is no record of any such order, or the reasons for it. 
lli The Special Master inaccurately cites to page 843 of the Note for the quotation provided 
in the Interim Report and incorrectly identifies the author as “Jerry” DeGraw, rather than James. 
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is not currently in effect in the D.C. Circuit. The Special Master thus cannot have been conferred 
any power by that proposed rule. 
Moreover, even if the Special Master had some implied power to issue preliminary 
findings and conclusions in an interim report, Interior is unaware of what caused the Special 
Master to issue his Interim Report now. The Special Master does not explain in the Interim 
Report why he suddenly issued a preliminary report before the conclusion of his inve~tigation.’~ 
In the first of many seauiturs in his Interim Report, he suggests that the “report is ‘interim’ 
because the Special Master, not having received the bulk of the discovery he has repeatedly 
requested, has been constrained to utilize documentation obtained outside normal channels.” 
Interim Report at 1 n. 1. The lack of requested document^,'^ if true, might serve as an 
explanation, in part, for why his investigation is incomplete. It does not explain why he decided 
to issue an interim report now containing interim findings and conclusions about the subject of 
the incomplete investigation. 
Interior objects to the filing of an interim report and asks the Court not to consider any 
portion of the Interim Report. 
-4- 
i!i It is especially ironic that a Special Master who has not issued a final report for an 
investigation that is apparently complete (seeInterior Motions to release IT security report) feels 
compelled to issue an interim report on an incomplete investigation. 
The history of the Special Master’s document requests, his opportunities to view 
documents in camera, and the status of productions to him, are described in detail above. 
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11. THE SPECIAL MASTER HAS NO AUTHORITY TO RELY UPON SECRETLY 
OBTAINED EVIDENCE 
Interior also objects to the Special Master’s acquisition of, and reliance upon, evidence 
obtained “outside of normal channels and to which the parties may have no fami1iarity.”l6 
Interim Report at 1 n. 1. Interior does not believe that Special Master Balaran had the authority to 
gather evidence ex parte during this investigation and objects to any finding or conclusion in his 
Interim Report that was based upon such evidence. 
Interior recognizes that the Court believes that a special master who is conducting an 
investigation in an “institutional reform” case is authorized to acquire secret evidence and meet 
secretly with witnesses. See Cobell, 237 F. Supp. 2d at 80-81. But the Court cites no authority 
from the D.C. Circuit for such an expansive view of a special master’s powers, and Interior is 
unaware of any. Rule 53 does not contain any such authority. Instead, the Court relies upon 
decisions from other jurisdictions and upon law review article^.'^ See id. 
The Special Master claims that he was “constrained” to use secretly acquired evidence 
because he has not received all of the documents he has requested. Interim Report at 1 n. I. As 
discussed above, the Special Master has been given a large volume of responsive documents and 
was given the opportunity to view the entire collection in camera. Interior does not believe that 
the Special Master has authority to gather, and rely upon, secret evidence; but if Interior is 
wrong, then the Special Master had the authority to obtain evidens-from “outside of normal 
channels” (Interim Report at 1 n. 1) even if he had received all of the documents requested from 
Interior. The status of document production is thus not relevant to the issue of the Special 
Master’s authority to acquire secret evidence in this investigation. 
In quoting from an article in the Columbia Law Review to support the proposition that 
special masters in “institutional reform” cases can have additional powers not granted to ordinary 
special masters, the Court omitted the author’s description of the types of institutions that 
qualified for institutional refonn as “various social institutions.” Compare Cobell, 237 F. Supp. 
2d at 80 with Specid Project, The Remedid Process in Itutittitional Reform Litigation, 78 
Colum. L. Rev. 784, 788 (1 978). Obviously, Interior is not a mere “social institution.” It is part 
of a branch of government co-equal with the judiciary. 
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However, even if “institutional reform” masters could be granted such powers, a case 
cannot become an “institutional reform” case - and thus eligible for appointment of a superspecial 
master with exceptional ex uarte powers -merely because a court chooses to label it as 
such. Interior respectfully disputes the Court’s finding that this is an “institutional reform” case. 
The Court’s jurisdiction here is derived from the Administrative Procedure Act, 5 U.S.C. 4 706. 
-See Cobell v. Norton, 240 F.3d 1081, 1095-97 (D.C. Cir. 2001). Interior is unaware of any 
“institutional reform” jurisdictional grant in the AF’A. 
Moreover, even if this case were generally an “institutional reform” case, the 
investigation being conducted by Special Master Balaran here cannot be classified as 
“institutional reform.” The Special Master is investigating whether Interior improperly withheld 
information from a report submitted to the Court. This has nothing to do with “institutional 
reform.” 
It also appears that the Court views the Special Master as an “agent” with the Court as his 
“principal.” See 237 F. Supp. 2d at 89 (“the Court, as principal” consulted with its “agents,” the 
two special masters). An agent obviously cannot have greater powers than his principal. The 
Court surely would not go out and secretly gather evidence on its own outside the presence of 
counsel about whether information was improperly withheld from the Eighth Quarterly Report. 
r - z 
If the Court does not have this power, it is difficult to comprehend how the Court’s “agent,” 
Special Master Balaran, can have such power. 
To the extent that Interior’s consent is needed for the Court to authorize the Special 
Master to engage in the ex parte acquisition of evidence during this investigation, no such 
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consent has been given. Interior vigorously disputes the authority of the Special Master to obtain 
secret evidence. 
However, even if the Court had authority to grant ex Darte powers to a special master, the 
Court did not expressly grant Special Master Balaran such powers in the November 5,2002 
Order of reference authorizing this investigation. Such extraordinary power should not be 
inferred. 
It would be especially improper to infer ex parte powers so casually in a case where 
Special Master Balaran already wears-manyhats. While he is acting as a roving investigator, 
secretly gathering information about the Eighth Quarterly Report, he is also acting in an 
adjudicative fashion on other matters in this case. Currently before the Special Master for his 
report and recommendation are: (1) Treasury Defendant’s Motion for Determination that it 
Purged Contempt (filed May 1,2001); (2) Defendant’s Motion for Protective Order (filed July 
13,2001); (3) Treasury’s Motion for a Treasury Department Document Retention Order (filed 
July 9,2001); (4) Treasury’s Motion for Reconsideration of Special Master’s Order Granting 
Plaintiffs an Enlargement of Time (filed July 23, 2001); ( 5 )Plaintiffs’ Motion to Compel 
Production of Documents (filed May 8,2002); and (6) Interior Defendants’ Motion for a 
Protective Order Regarding Confidential Information (filed March 7,2003). 
-4-. 
It is beyond dispute that the Special Master has secretly gathered evidence here and that 
he has relied upon that evidence in his Interim Report. What is unknown, and perhaps 
unknowable, is how much additional secret evidence the Special Master has obtained, and 
perhaps relied upon in forming his conclusions, but which was not included in the Interim 
Report. For example, some of the documents attached as exhibits to the Interim Report 
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seemingly came fi-om NAID employees.” See, e.g., Interim Report, Exhibit 31 (“Mike Smith” 
computer file name and “4/9/2003” along the bottom of the document); Exhibit 35 at 5, 8 (“user 
name: Michael Smith”); Exhibits 41, 44,46, 49, 50, 58 (Jerry L. Moran emails); Exhibit 55 (fax 
to Jerry Moran). The source of other exhibits is unclear. See, ex., Interim Report, Exhibits 2-5, 
9-11, 17, 22,27,42-43,45, 57,62,64,69. 
The documents obtained ex Darte by the Special Master obviously did not magically 
appear in his hands. Somebody gave them to him in secret, perhaps upon request, and may have 
secretly given other information to the Special Master that was then relied upon in drafting the 
Interim Report - or perhaps influenced some of his conclusions. If oral testimony was taken by 
the Special Master during his investigation, Fed. R. Civ. P. 53(e)(1) requires the master to file 
with any report “a transcript of the proceedings and of the evidence and the original exhibits.” 
The Special Master did not file a transcript of any ex Darte proceeding in which he may have 
secretly gathered evidence. This secret information was obtained without the knowledge of 
Interior Defendants and without affording them an opportunity to comment upon it or to crossexamine 
any witness regarding evidence relied upon by the Special Master before it was reflected 
in the Interim Report.” 
LY It is unclear if these documents were improperly taken from Interior by NADD employees 
when their contract expired. Perhaps the Special Master should investigate whether NALD 
improperly removed documents, including any that contain IIM data, rather than rely upon those 
documents during this investigation. 
Also, the Special Master did not give Interior an opportunity to object to the exhibits 
attached to his Interim Report before publicly filing them. The exhibits obtained ex parte may 
contain information protected by the deliberative process privilege or other confidential 
information. Interior reserves the right to assert any such privilege after it is given an opportunity 
to determine the source and authenticity of the documents and has more time to examine them. 
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In any event, because the Special Master relied upon secretly acquired information, his 
findings and conclusions in the Interim Report cannot be accorded any deference. See Cobell, 
237 F. Supp. 2d at 83 (“well-established rule that, to the extent that a special master’s report 
relies upon infomation obtained from one-sided communications, it cannot be accorded the 
same level of deference as reports based upon evidence obtained during a more formalized 
proceeding”). The Special Master’s findings cannot be reviewed upon a clearly erroneous 
standard. See id. 
As discussed throughout this Objection, NAID’s claims are meritless and Interior does 
not believe this investigation is necessary or appropriate. If the Court disagrees and wants the 
investigation to continue, it cannot be conducted by Special Master Balaran because he has been 
tainted by his ex uarte activities. The Court should instruct any future special master to conduct 
the balance of his or her investigation in the open, without resorting to the secret acquisition of 
documents or testimony that Interior is unable to address until after it has been relied upon by the 
special master and publicly disclosed. 
111. THE SPECIAL MASTER’S INTERIM CONCLUSION THAT INFORMATION 
WAS WITHHELD FROM THE EIGHTH QUARTERLY REPORT IS 
UNSUPPORTED 
One of the structural difficulties in responding to the Special Master’s interim findings 
-4- 
that information was withheld from the Eighth Quarterly Report is that the Court’s November 5 
Order is ambiguous and vague about the purposes of this investigation: 
The Court wishes to ascertain whether there is any validity to NAID’s contention that the 
Department of the Interior withheld information from the Court that should have been 
disclosed in the Eighth Quarterly Report; and is directing the Special Master to 
investigate whether hterior engaged in any such concealment. 
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November 5 Order at 1. This Order gives the Special Master no standards to use in determining 
whether information “should” have been disclosed to the Court. Surely the Court is not 
suggesting that every comment, every thought, every criticism that crosses the desk of 
decisionmakers at Intenor regarding IIM trust matters must be disclosed to the Court. The 
Quarterly Reports are meant to inform the Court of the steps taken by Interior to bring itself into 
compliance with its trust obligations. Interior hired EDS to evaluate, among other things, the 
effectiveness and feasibility of TAAMS. EDS conducted its review and issued reports about its 
findings. After reviewing EDS’s reports and all available information, Interior officials decided 
to defer further use of TAAMS Realty and Accounting systems. Interior kept the Court informed 
of all of these things. 
What the Special Master has found, at most, is that Interior did not inform the Court that 
some people -Interior employees and consultants like NAID hired to work on TAAMS -did not 
unanimously agree with all of EDS’s findings and recommendations. The Special Master does 
not point to any evidence that the criticisms from NAIO and others were ignored by Interior 
decisionmakers or EDS personnel. The Special Master concludes, based on nothing identified in 
his report (and thus possibly from unidentified sources), that the mere fact that not all of the 
Project Team comments were included in subsequent EDS reports or in the Eighth Quarterly 
-4- 
Report must mean that Interior “withheld” this information. Preparing a report that includes 
some information and excludes 
was “withheld.” 
other information does not mean that the omitted information 
As discussed extensively above, many of the Special Master’s findings are strikingly 
inaccurate. Information that he claims was withheld from the Court was disclosed, either directly 
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or with substantially equivalent information. The Special Master does not reveal to the Court 
that the Project Team drafted the TAAMS sections of the Sixth and Seventh Quarterly Reports. 
It is difficult to understand how their later comments surrounding the Eighth Quarterly Report, 
about the very same issues, can be relied upon uncritically by the Special Master. 
Interior does not have an obligation to provide the Court with all of the predicate 
information that Interior decisionmakers weighed when selecting a course of action. There is 
simply no obligation to provide to the Court in the Quarterly Reports every piece of information 
in Interior’s files. Interior opted to get an outside analysis of T W S and informed the Court 
about this decision. Interior opted to follow the EDS recommendations and informed the Court 
about this decision. Nothing in the NAID criticism of the EDS report makes any information 
provided to the Court untrue or misleading. 
The Special Master’s findings that Interior withheld information from the Court in the 
Eighth Quarterly Report that should have been disclosed are not supported by any evidence in his 
Interim Report. 
IV. THE SPECIAL MASTER’S INTERIM CONCLUSION THAT INFORMATION 
WAS WITHHELD FOR IMPROPER PURPOSES IS UNSUPPORTED 
As discussed above, no documents and no testimony (of record) identified in the Interim 
Report indicate that Interior was concealing information from the Court. The Special Master 
notes the existence of various comments by the Project Team critical of the EDS reports and the 
absence of some of these comments from the Eighth Quarterly Report. From this absence the 
Special Master presumes that any omission must have been for improper reasons. This 
presumption, in the absence of direct evidence, is inappropriate. It would seem that a neutral 
judicial official should presume that no improper action occurred unless he finds evidence of it; This is the background image for an Adobe Acrobat Capture page with image plus hidden text.  
he should not presume improper action simply because he has not yet found evidence of 
impropriety. 
The Special Master does not find that the decision to seek an outside review of TAAMS 
was improper. The Special Master does not find that the vast bulk of the extensive EDS reports 
about TAAMS were false or inaccurate.’’ The Special Master does not make the claim that every 
comment Interior ever receives must be included in a submission to the Court. The Special 
Master’s findings could be easily dismissed if it were not for his conclusion that the reason the 
Project Team comments were not inchded was because Interior was seeking to mislead the 
Court. This ominous charge is unsupported and incongruent with the nature of the Project Team 
comments. 
The basic premise of the NAD allegations which led to the November 5 Order 
authorizing this investigation was that NAID prepared negative comments about TAAMS and 
that Interior somehow concealed this negative information from the Court in the Eighth Quarterly 
Report, in an effort to make it look like TAAMS was working. What the Special Master’s 
Interim Report reveals is that NAID, a TAAMS contractor, prepared critical comments about an 
EDS report that was critical of TAAMS and that some, but not all, of these comments were 
included in the Eighth Quarterly Report. 
-5 
The EDS report was critical of TAAMS and recommended dropping the Realty and 
Accounting portion of it. NAD employees must have realized that if TAAMS were eliminated, 
NAID might lose its job. NAID’s comments, critical of the EDS report, are thus understandable. 
Tellingly, the Special Master omits from his Interim Report that for thirty-one of the EDS 
recommendations, although the Project Team had comments, they concurred with the 
recommendation, and concurred without comment on twelve other recommendations. 
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.-.- 
What makes the Special Master’s conclusion about the motives of Interior so misguided is that 
the Project Team comments were supportive of TAAMS as a workable system. In its estimation, 
with a little more fimding and time, TAAMS could be made to work. If, as the Special Master 
suggests, Interior were trying to mislead the Court during the then-pending contempt 
proceedings, it is difficult to comprehend why Interior would deliberately omit comments that 
indicated that some of the TAAMS employees and contractors at Interior still believed TAAMS 
could work. As the Court will recall, the specifications at the contempt trial that related to 
TAAMS charged Interior with misleading the Court into believing that TAAMS was more 
effective than it really was. The Project Team comments would have bolstered Interior’s 
defense, not harmed it. Interior had no incentive to conceal these comments from the Court.*’ 
What the Special Master has really concluded in his Interim Report is that he disagrees 
with Interior’s management decision to defer operation of TAAMS, as recommended by EDS. 
This attack on Interior’s decisionmaking is improper. It is also not supported by any evidence 
identified in his Interim Report. 
It is perhaps understandable that the people at NAID, and the Interior employees that had 
worked so hard to make TAAMS succeed, would be disappointed about a recommendation that 
TAAMS be deferred.2’ It appears, however, that more than just pride in one’s work could have 
rr 
been behind NAID’s criticism of the EDS reports, and behind the way in which the NAID 
a The Special Master’s conclusions are also belied by the extraordinary amount of 
information and sworn testimony about the operations of T A M S and Interior’s decisions 
regarding TAAMS that were supplied to the Court at the contempt trial and elsewhere in this 
case. 
a Many of the people who worked so hard for such a long time tryins to make TAAMS 
work undoubtedly believed that it would work with additional funding and additional time. 
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comments were eventually brought to the Court’s attention. Its comments were essentially that if 
more money were spent on TAAMS (& more money paid to NAID), then TAAMS might be 
made to work. If implementation of TAAMS were deferred, NAID surely realized that the 
services of a contractor hired to work on TAAMS would no longer be necessary.23 
Support for this proposition can be found in a letter that NAD sent to Interior. Letter of 
August 1, 2002 (attached as Exhibit K). In this letter from NAD’s attorneys, NAID threatened 
to bring to the Court’s attention that some of its comments about TAAMS had not been included 
in submissions to the Court, unless Interior agreed to renew its contract. See August 1,2002 
Letter at 2. If NAID truly believed that the Court had been deceived or that NAID’s TAAMS 
comments had been deliberately suppressed, it should have immediately brought its concerns to 
the Court. NAID did not say that Interior should disclose NAID’s comments to the Court or that 
NAID would be forced to do so. Rather, NAID informed Interior that if it allowed “the contract 
to expire without immediate senior-level intervention, DO1 will leave the company no choice but 
to intervene in the Cobell case to seek judicial relief.” Id.at 2. This letter can certainly be 
interpreted as a threat, a threat that NAID camed out. The letter was sent to Interior on August 1, 
2002. NALD’s Motion to Intervene, which first brought NAID’s contentions to the attention of 
the Court, was filed on August 30,2002. It is puzzling that the Special Master did not consider 
-7 
the motives of NAID employees making the critical comments about the EDS report and did not 
After interior completes its systems re-engineering process, the utility of the TAAMS 
Realty & Accounting software can be re-evaluated. At that time, an informed decision regarding 
future investment can be made. 
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explore the manner of, and motives behind, NAID’s effort to bring its claims to the Court’s 
CONCLUSION 
For these reasons, Interior Defendants object to the Special Master’s Interim Report. 
Interior requests a hearing pursuant to Fed. R. Civ. P. 53(e)(2) before any part of this Interim 
Report is adopted by the Court. 
Dated: May 7,2003 Respectfully submitted, 
ROBERT D. McCALLUM, JR. 
Assistant Attorney General 
STUART E. SCHIFFER 
Deputy Assistant Attorney General 
J. CHRISTOPHER KOHN 
Director 
Deputy Director 
D.C. Bar No. 261495 
JOHN T. STEMPLEWICZ 
Senior Trial Attorney 
Commercial Litigation Branch 
Civil Division 
P.O. Box 875 
Ben Franklin Station 
Washington, D.C. 20044-0875 
(202) 5 14-7194 
9 It is surprising that the Special Master apparently did not even consider the notion that 
NAID’s efforts in bringing this matter to the Court might be the foundation for a contract claim 
against Interior. 
40