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# Table of Contents

[Page No.]{.underline}

**I. Overview 1**

**II. Summary of Program Changes 6**

**III. Appropriation Language and Analysis of Appropriation Language
NA**

IV\. Decision Unit Justification

A. Environment and Natural Resources Division 7

1\. Program Description 7

2\. Performance Tables 16

3\. Performance, Resources, and Strategies 19

a\. Performance Plan and Outcomes 19

b\. Strategies to Accomplish Outcomes 27

c\. Results of Program Assessment Rating Tool 38

V. Exhibits

A.  Organizational Chart

> B. Summary of Requirements
>
> C. Program Increases by Decision Unit

D.  Resources by DOJ Strategic Goal/Objective

E.  Justification for Base Adjustments

F.  Crosswalk of 2006 Availability

G.  Crosswalk of 2007 Availability

H.  Summary of Reimbursable Resources

I.  Detail of Permanent Positions by Category

J.  Financial Analysis of Program Increase

K.  Summary of Requirements by Grade

L.  Summary of Requirements by Object Class

> M. Status of Congressionally Requested Studies, Reports, and
> Evaluations NA

I. [Overview of the Environment & Natural Resources
Division]{.underline}

A. Introduction:

*[Environment and Natural Resources Division (ENRD)
Mission]{.underline}*: ENRD's mandate is to enforce civil and criminal
environmental laws and programs protecting the health and environment of
the United States and to defend suits challenging those laws and
programs. To accomplish this mission in FY 2008 the Division is
requesting a total of \$101,396,000, including 453 General Legal
Activities (GLA) funded positions, and 499 Full-Time Equivalents (FTE).
ENRD seeks a total enhancement of \$3,951,000, which includes funding
for 17 positions, (10 attorneys), and 9 FTE, and \$2,580,000 for
automated litigation support.

The additional resources requested in ENRD's FY 2008 Budget are needed
to defend the United States effectively in the "Tribal Trust" cases, a
series of multi-billion-dollar lawsuits alleging the United States has
breached its trust responsibilities to Indian Tribes by failing to
provide "full and complete" historical accountings of tribal trust funds
and non-monetary trust resources, failing to properly administer tribal
accounts that receive revenues from economic activity on Tribal lands,
and failing to manage properly tribal non-monetary trust resources, such
as timber, gas, oil, and other minerals. The United States has been sued
in approximately 104 cases filed by more than 80 Tribes in various
United States District Courts and in the United States Court of Federal
Claims. Two of the cases feature requests to certify classes of over 250
Tribal plaintiffs. If such requests are granted, the United States will
have been sued by more than 300 Tribes. In the 104 presently filed
cases, the Tribes claim that they are owed damages exceeding \$220
billion. Many of the currently filed cases are moving into the more
demanding stages of litigation (formal discovery, depositions, trial) or
alternative dispute resolution (ADR) processes, presenting new
challenges which require additional resources that ENRD does not
currently have.

More details appear on page 6, Summary of Program Changes Section, and
page 29, Program Increases by Item Section, contained in this
submission.

Beginning in FY 2007, electronic copies of the Department of Justice's
congressional budget justifications and Capital Asset Plan and Business
Case exhibits can be viewed or downloaded from the Internet using the
Internet address: <http://www.usdoj.gov/jmd/2008justification/>.

**ENRDetails** \-- *Did You Know* ...

The Environment and Natural Resources Division was created on November
16, 1909, when Attorney General George Wickersham signed a two-page
order creating "The Public Lands Division" of the U.S. Department of
Justice. He assigned all cases concerning "enforcement of the Public
Land Law," including Indian rights cases, to the new Division, and
transferred a staff of nine \-- six attorneys and three stenographers
\-- to carry out those responsibilities. As the nation grew and
developed, so did the responsibilities of the Division, which was
subsequently renamed three times. In 1933, the Division was called the
"Lands Division;" in 1965 the Division's name was changed to the "Land
and Natural Resources Division;" and in 1990 the Division acquired its
current name, the "Environment and Natural Resources Division."

**B. Issues, Outcomes, and Strategies:**

As the Nation\'s chief environmental litigator, ENRD supports the
Justice Department's Strategic Goal Two: Enforce Federal Laws and
Represent the Rights and Interests of the American People, and Strategic
Objective 2.5: Enforce federal statutes, uphold the rule of law, and
vigorously represent the interests of the United States in all matters
for which the Department has jurisdiction.

The Division initiates and pursues legal action to enforce federal
pollution abatement laws and obtain compliance with environmental
protection and conservation statutes. ENRD also represents the United
States in all matters concerning protection, use, and development of the
nation\'s natural resources and public lands. The Division defends suits
challenging all of the foregoing laws, and fulfills the federal
government's responsibility to litigate on behalf of Indian tribes and
individual Indians. ENRD's legal successes protect the federal fisc,
reduce harmful discharges into the air, water, and land, enable clean-up
of contaminated waste sites, and ensure proper disposal of solid and
hazardous waste. ![](media/image10.jpeg){width="1.0215277777777778in"
height="1.1875in"}

In affirmative litigation, ENRD obtains redress for past violations
harming the environment, ensures that violators of criminal statutes are
appropriately punished, establishes credible deterrents against future
violations of these laws, recoups federal funds spent to abate
environmental contamination, and obtains money to restore or replace
natural resources damaged by oil spills or the release of other
hazardous substances into the environment. ENRD also ensures that the
federal government receives appropriate royalties and income from
activities on public lands and waters.

By vigorously prosecuting environmental criminals, ENRD spurs
improvements in industry practice and greater environmental compliance.
Additionally, the Division obtains civil penalties and fines against
violators, thereby removing the economic benefits of non-compliance and
leveling the playing field so that companies complying with
environmental laws do not suffer competitive disadvantages.

In defensive litigation, ENRD represents the United States in challenges
to federal environmental and conservation programs and all matters
concerning the protection, use, and development of the Nation\'s public
lands and natural resources. ENRD faces a growing workload in a wide
variety of natural resource areas, including litigation over water
quality and watersheds, the management of public lands and natural
resources, endangered species and sensitive habitats, and land
acquisition and exchanges. The Division is increasingly called upon to
defend Department of Defense training and operations necessary to
military readiness and national defense.

Additionally, as referenced throughout our FY 2008 Budget, ENRD
continues to defend the federal government in lawsuits alleging the
United States has breached its trust responsibilities to Indian Tribes
by failing to provide "full and complete" historical accountings of
tribal trust funds and non-monetary trust resources, failing to
administer properly tribal accounts that receive revenues from economic
activity on Tribal lands, and failing to manage properly tribal
non-monetary trust resources. As a result of a statute of limitations
which expired December 31, 2006, ENRD has recently received a number of
new case filings. Approximately 86 of the 104 current cases were filed
after November 2005 (some 72 cases were filed in the last week of
December 2006 alone). Two of the cases feature requests to certify
classes of over 250 Tribal plaintiffs. If such requests are granted, the
United States will have been sued by more than 300 Tribes. To date, we
have settled two Tribal Trust cases. ENRD is engaged in formal
alternative dispute resolution (ADR) processes or informal settlement
discussions with the Tribes in 13 other cases. ENRD is actively
litigating approximately twenty of the Tribal Trust cases; and we are
only beginning to review the claims and understand the issues involved
in the 72 additional cases which were filed the last week in December
2006 (before the expiration of the statute of limitation requiring the
filing of such cases). For these Tribal Trust cases, regardless of
litigation posture, the Division is obligated to identify, locate,
review, scan, manage, and produce approximately 150 million pages of
documents relevant to Tribal Trust fund accounts, resources, and assets.
Consequently, we expect the Tribal Trust litigation to continue
indefinitely.

**C. Full Program Costs:**

The Division is one single Decision Unit. Its operations include both
criminal and civil litigating activities directly related to the
strategic goals and objectives of the Department of Justice. The
methodology used to allocate expenses is based on the percentage of
hours worked on criminal and civil cases. These percentages are then
used to allocate the expenses of the Division into the two areas of
criminal and civil litigating activities. These two areas of execution
correlate directly to Strategic Objective 2.5 under the Departmental
Strategic Goal Two: Enforce Federal Laws and Represent the Rights and
Interests of the American People.

**ENRDetails** \-- *Did You Know* ...

The Environment and Natural Resources Division litigated the case
involving the largest fine ever obtained by the federal government,
environmental or otherwise. That case was the suit brought against Exxon
following the Exxon Valdez oil spill off the coast of Alaska in 1989,
and the fine was \$1.1 billion. On March 24, 1989, the Exxon Valdez
tanker hit Prince William Sound\'s Bligh Reef and spilled an estimated
11 to 30 million U.S. gallons of crude oil into the sea. As a result of
the spill, thousands of animals perished immediately, including and
estimated 250,000 sea birds, 2,800 sea otters, 300 harbor seals, 250
bald eagles, 22 orcas, and millions of salmon and herring eggs. The
disaster prompted the U.S. Congress to pass the Oil Pollution Act in
1990 to address issues associated with preventing, responding to, and
paying for oil pollution.

**D. Performance Challenges:**

*[External Challenges]{.underline}*

The Division has limited control over the filing of defensive cases,
which make up the majority of our workload. Court schedules and
deadlines drive the pace of work and attorney time devoted to these
cases. ENRD's defensive caseload is expected to increase in FY 2008 as a
result of numerous factors.

-   ENRD expects a number of challenges to the simplified energy
    development and permitting provisions of the 2005 Energy Policy Act.
    Based on ENRD's past experience -- in the 1970s and 1980s, the
    Interior Department conducted offshore oil and gas lease sales in
    nearly all coastal regions of the continental U.S. and in Alaska --
    we realize that sizeable, energized leasing programs result in
    sizeable increases in case-work.

-   The Division's defensive caseload involving the Tribal Trust
    litigation is also expected to increase substantially, with the
    filing of 72 new cases during the last week of December 2006.
    Currently, ENRD has 104 filed Tribal Trust cases on its docket.

-   Additionally, beginning in FY 2007, Indian and other federal water
    rights adjudications currently stayed for settlement negotiations
    are expected to resume.

The Division also will be responsible for handling cases that arise from
the Administration's focus in other environment arenas, such as white
collar environmental crimes. Prosecution of white collar crimes and
corporate fraud is one of the Attorney General's six stated priorities;
and casework involving the prosecution of corporations and corporate
executives may impose a greater-than-expected workload demand on the
Environment Division in FY 2008 and beyond. ENRD has realized a number
of legal victories in the area of white collar environmental crimes in
FY 2005 and 2006 (described in the Accomplishments section of this
Performance Budget), and we do not foresee any retreat in investigative
and litigative activity in the immediate future. Although we expect to
be faced with an increased workload in the area of white collar criminal
litigation, we are not seeking a program enhancement in this area for FY
2008 because we believe offsetting resource demands will allow us to
accommodate prospective needs from our base.

Absent the additional resources requested in this submission, the
Division will be required to reassign resources from other critical
activities to accommodate the increased defensive caseload. The
Environment Division has already implemented creative strategies to
accomplish more work within existing resources, including a program to
cross-train attorneys across specialty areas to enable managers to shift
workloads. Although these strategies have helped to address immediate
needs, the solution is best viewed as a temporary fix. Another option -
shifting resources from enforcement to defensive work - can lead to
disregard for the law in general, putting public health and safety, as
well as the nation's infrastructure and natural resources, at risk,
creating a false perception that the Administration is not interested in
enforcing environmental laws.
![](media/image4.jpeg){width="1.0527777777777778in"
height="1.1958333333333333in"}

***[Internal Challenges]{.underline}***

ENRD's overwhelming internal challenge is to ensure sufficient attorney
FTEs and dollars to carry out the increasing demands of our defensive
workload. The \$3,951,000 requested in FY 2008 for the Tribal Trust
program area addresses this challenge. However, ENRD will continue to
address these challenges by balancing available personnel and resources
against workload demands.

Another challenge involves maintaining adequate information technology
resources for our workforce. Like other litigating components, ENRD must
provide computer resources for our attorneys which meet the changing,
increasingly technological, demands of the legal industry. With the
introduction of new technologies and new requirements -- such as
e-filing, on-line document repositories, electronic trials, extranet
docketing systems, and the newly imposed (December 2006) "electronic
discovery" amendments to the Federal Rules of Civil Procedure -- we need
to continually provide our workforce with the necessary computer
hardware and systems to accommodate these business process challenges.

We have identified a number of software and system challenges which will
confront ENRD in FY 2008. For example, implementation of the
Department's Litigation Case Management System (LCMS) will be an
expensive and time-consuming effort in the upcoming fiscal years. ENRD
predicts that it may spend up to \$450,000 in base resources in FY 2008
to implement this required system. The Division will complete its
business process assessment and common data model planning by FY 2007.
In FY 2008, we will begin mapping data, prioritizing reports, building
conversion tools, migrating data, and cleaning up conversion/migration
discrepancies. This sizeable endeavor will require the effort and
attention of existing government employees as well as the specialized
expertise and supplemental labor of industry consultants and/or
contractor resources.

With the requested resources for Tribal Trust in FY 2008, ENRD believes
it can accommodate its foreseeable internal and external challenges.
Without additional resources, the Division will be poorly positioned to
defend federal financial interests in the Tribal Trust litigation as
well as in other important program areas.

**ENRDetails** \-- *Did You Know* ...

The Environment and Natural Resources Division, which is organized into
nine sections, has offices and/or personnel located in Washington, D.C.,
Anchorage, Denver, Sacramento, San Francisco, Seattle, Boston,
Albuquerque, Boise, Missoula, MT, Concord, NH, Newton, MA, and Sequim,
WA. With a staff of nearly 700 federal employees, ENRD has more than
5,700 active cases, and has represented virtually every federal agency
in courts all over the United States and its territories and
possessions.

**E. Program Assessment Rating Tool:**

During FY 2005, the Division was assessed through the Office of
Management and Budget's (OMB) Program Assessment Rating Tool (PART)
along with five other litigating components (Antitrust, Civil Division,
Criminal Division, Civil Rights Division, and Tax Division),
collectively named the General Legal Activities (GLA) Program. At the
end of the assessment, the GLA Program received the highest rating of
"Effective." In FY 2006, the Program initiated follow-up actions
focusing on continual improvement of business practices. More details
appear on page 38, Performance, Resources, and Strategies Section,
contained in this submission.

**II. Summary of Program Changes**

*[Tribal Trust]{.underline}*

The Division requests additional resources to defend Number range
CHAPTERthe United States adequately against claims that the Government
has failed to provide a "full and complete" historical accounting of
trust funds that it collected, managed, and disbursed, and of the trust
resources that it administered, on behalf of the Tribes, and that the
Government has mismanaged the Tribes' trust funds and non-monetary trust
resources, such as timber, gas, oil, and other minerals. Litigation
efforts for this initiative are directly linked with the Department's
Strategic Goal Two, Objective 2.5: Enforce federal statutes, uphold the
rule of law, and vigorously represent the interests of the United States
in all matters for which the Department has jurisdiction. Therefore, the
Division requests an increase of \$3,951,000 as indicated below:

+------+-----------+----+-------+----+----------+----------+--------+
| >    | **Item**  | ** | **    | *  | **Per    | **Li     | **T    |
|  **S |           | Po | Attor | *F | sonnel** | tigation | otal** |
| trat |           | s. | ney** | TE |          | S        |        |
| egic |           | ** |       | ** |          | upport** | **Req  |
| > Go |           |    |       |    |          |          | uest** |
| al** |           |    |       |    |          |          |        |
+------+-----------+----+-------+----+----------+----------+--------+
| 2.5  | Tribal    | 17 | 10    | 9  | \$1      | \$2      | \$3,9  |
|      | Trust     |    |       |    | ,370,584 | ,580,416 | 51,000 |
+------+-----------+----+-------+----+----------+----------+--------+

The Tribal Trust cases are factually and legally complicated cases and,
accordingly, have required substantial resources over the past several
years. We expect case-relevant events in FY 2008 to be highly demanding,
especially as these cases will be more mature and active. As a result of
a statute of limitations which expired December 31, 2006, ENRD has
recently received a number of new case filings. Approximately 86 of the
104 current cases were filed after November 2005 (some 72 cases were
filed in the last week of December 2006 alone). Two of the cases feature
requests to certify classes of over 250 Tribal plaintiffs. If such
requests are granted, the United States will have been sued by more than
300 Tribes. To date, we have settled two Tribal Trust cases. ENRD is
engaged in formal alternative dispute resolution (ADR) processes or
informal settlement discussions with the Tribes in 13 other cases. ENRD
is actively litigating approximately twenty of the Tribal Trust cases;
and we are only beginning to review the claims and understand the issues
involved in the 72 additional cases which were filed the last week in
December 2006. It is not unreasonable to expect virtually all of the
filed Tribal Trust cases to be in full-blown litigation by FY 2008.
Among other things, the Division is obligated to identify, locate,
review, scan, manage, and produce potentially hundreds of million pages
of documents relevant to Tribal Trust fund accounts, resources, and
assets in the Tribal trust litigation, regardless of the litigation
posture or context.

ENRD expects that its Tribal Trust-related workload will, at a minimum,
double between now and FY 2008. To accommodate this increased caseload,
ENRD requests 10 attorneys, five paralegals, and two support staff. We
believe this mix of staffing will most efficiently address both the
volume and the nature of the pending workload.

Additional facts and information regarding the Tribal Trust Initiative
are included on page 29 in the Program Increases by Item Section
contained in this submission.

**IV. Decision Unit Justification**

**[A. Environment and Natural Resources Division]{.underline}**

  --------------------------------------- ---------- ------ --------------
  FY 2008 Request Summary                 Perm. Pos. FTE    Amount (\$000)

  2006 Enacted with Rescissions and       439        493    92,774
  Supplementals                                             

  2007 Estimate                           436        490    91,408

  Adjustments to Base and Technical       \-         \-     6,037
  Adjustments                                               

  2008 Current Services                   436        490    97,445

  2008 Program Increases                  17         9      3,951

  2008 Request                            453        499    101,396

  Total Change 2007-2008                  17         9      \$ 9,988
  --------------------------------------- ---------- ------ --------------

**1. [Program Description]{.underline}**

Number range CHAPTERAs stated in the Department of Justice Strategic
Plan, ENRD works to:

-   Investigate and prosecute environmental and wildlife crimes;

-   Pursue cases against those who violate laws that protect public
    health, the environment, and natural resources;

-   Defend U.S. interests against suits challenging statutes and agency
    actions;

-   Develop constructive partnerships with other federal agencies, state
    and local governments, and interested parties to maximize
    environmental compliance and stewardship of natural resources;

-   Act in accordance with United States trust responsibilities to
    Indian tribes and individual Indians in litigation involving the
    interests of Indians.

The Division focuses on both civil and criminal litigation regarding the
defense and enforcement of environmental laws and regulations. The
Division serves as the nation's environmental litigator and represents
many federal agencies in environmental litigation (e.g., the
Environmental Protection Agency, Department of Agriculture, Department
of the Interior, Department of Defense, and Department of Homeland
Security.)

As the nation's chief environmental litigator, ENRD strives to obtain
compliance with environmental and conservation statutes. To this end, we
seek to obtain redress of past violations that harmed the environment,
establish credible deterrence against future violations of these laws,
recoup federal funds spent to abate environmental contamination, and
obtain money to restore or replace natural resources damaged through oil
spills or the release of other hazardous substances. The Division
ensures illegal emissions are eliminated, leaks and hazardous wastes are
cleaned up, and drinking water is safe. Our actions, in conjunction with
the work of our client agencies, enhance the quality of the environment
in the United States and the health and safety of its citizens.

Civil litigating activities include cases where ENRD defends the United
States in a broad range of environmental litigation and enforces the
nation's environmental laws. The majority of the Division's cases are
defensive or non-discretionary in nature. They include claims alleging
noncompliance with federal, state and local pollution control and
natural resource laws. Civil litigating activities also involve the
defense and enforcement of environmental statutes such as the
Comprehensive Environmental Response, Compensation, and Liability Act
(CERCLA), the Clean Air Act (CAA), the Clean Water Act (CWA), the
National Environmental Policy Act (NEPA), and the Endangered Species Act
(ESA).

The Division defends Fifth Amendment taking claims brought against the
United States alleging that federal actions have resulted in the taking
of private property without payment of just compensation, thereby
requiring the United States to strike a balance between the interests of
property owners, the needs of society, and the public fisc. ENRD also
prosecutes eminent domain cases to acquire land for congressionally
authorized purposes ranging from national defense to conservation and
preservation. Furthermore, the Division assists in fulfillment of United
States trust responsibilities to Indian Tribes. ENRD is heavily involved
in defending lawsuits alleging the United States has breached trust
responsibilities to Tribes by mismanaging Tribal natural resources and
failing to properly administer accounts that receive revenues from
economic activity on Tribal lands. The effectiveness of our defensive
litigation is measured by percent of cases successfully resolved and
savings to the federal fisc. These results can be seen in the
Performance and Resources Table contained in this submission.

Criminal litigating activities focus on identifying and prosecuting
violators of laws protecting wildlife, the environment, and public
health. These cases involve issues such as fraud in the environmental
testing industry, smuggling of protected species, exploitation and abuse
of marine resources through illegal commercial fishing, and related
criminal activity. ENRD enforces criminal statutes designed to punish
those who pollute the nation's air and water; illegally store, transport
and dispose of hazardous wastes; illegally transport hazardous
materials; unlawfully deal in ozone-depleting substances; and lie to
officials to cover up illegal conduct. The effectiveness of criminal
litigation is measured by the percentage of cases successfully resolved.
These results can also be seen in the Performance and Resources Table
contained in this submission.

**ENRDetails** \-- *Did You Know* ...

One of the Division's largest and most resource-intensive matters
involves enforcement of the Clean Air Act's (CAA) New Source Review
(NSR) provisions against the nation's coal-fired Power Plants. As of
December 2006, ENRD has entered into eleven settlements to address NSR
violations at coal-fired power plants. The combined effect of the
settlements achieved will reduce emissions of harmful pollutants by more
than 975,000 tons each year through the installation and operation of
over \$5.6 billion worth of pollution controls. As a result of ENRD's
enforcement efforts since FY 2005, polluters of all types will spend
nearly \$15 billion in corrective measures to protect the Nation's
environment and the American people's health and welfare.

**ACCOMPLISHMENTS**

In FY 2006, the Division successfully litigated to judgment 691 cases
while working on a total of 5,745 cases and matters. The estimated value
of federal injunctive relief (i.e., clean-up work and pollution
prevention actions by private parties) as a result of cases litigated by
ENRD was \$4.15 billion. In addition, as a result of ENRD's affirmative
civil and criminal enforcement efforts, the Division has imposed \$368
million in civil penalties, cost recoveries, criminal fines and
restitutions in FY 2006. ENRD achieved a favorable outcome in 95 percent
of cases resolved.

**Civil Cases**

-   ***Number range CHAPTERTribal Trust Cases***

The extraordinarily complex and multifaceted *Tribal Trust Cases*
continue to command a large portion of ENRD's time and resources. In the
past year, the Division has undertaken a number of significant
activities, including discovery, trial, and settlement, to defend the
Government's interests against the 104 cases filed thus far, as well as
the hundreds of prospective tribal demands for historical accountings
and claims of trust mismanagement. For example, the Division recently
went to trial in the *Osage* case to resolve a test group of oil and gas
leases over a specified time period. Specifically, the trial encompassed
four of the Tribe's 1,800 leases and examined five selected months of
transactions for each. The trial, which was conducted in the Court of
Federal Claims, lasted eight days. We anticipate a decision from the
Court sometime this year. In *Crow Tribe of Indians v. Norton*, ENRD
settled the Crow Tribe's breach of trust claims for \$10 million. The
Tribe had estimated its potential damages at over \$500 million. As a
result of the settlement, the Tribe dismissed with prejudice and waived
all of its trust accounting and trust mismanagement claims that spanned
decades. Additionally, under the settlement terms, the Tribe agreed to a
number of precedent-setting conditions, including the acceptance of the
current balances of the Tribe's trust fund account as accurate and the
acceptance of the Interior Department's periodic statements of
performance as constituting the accountings required by
law.![](media/image11.jpeg){width="1.2097222222222221in"
height="1.1895833333333334in"}

-   ***Healthy Forest Initiative***

The Division continued its string of victories in defending the federal
government against challenges to projects designed to restore public
forest lands, improve wildlife habitat, and recover the value of damaged
timber on federal forest lands -- projects which implement President
Bush's Healthy Forest Initiative. Included in these victories are cases
challenging the *Biscuit Fire Recovery Project* at the Siskiyou National
Forest in southwestern Oregon, the largest such recovery project in the
nation. In the massive Biscuit fire, the Forest Service responded to a
2002 wildfire that burned millions of trees on nearly 50,000 acres of
ecologically-rich land. The Biscuit Project involved the salvage
harvesting of large trees in the area of the Northwest Forest Plan,
including within the Late Successional Reserves established by the Plan
to protect the remnant old growth ecosystem, the sole remaining such
system in the lower 48 states. The Project engendered six separate
lawsuits brought by environmental groups and industry groups
dissatisfied with the alternative chosen by the Forest Service. The
Division successfully defeated preliminary injunctions seeking to halt
the salvage harvesting, and later received separate judgments on the
merits upholding the Project in all respects. Similarly, in the *Snake
River Basin Water Rights Adjudication*, which covers over 87% of the
State of Idaho, ENRD won a decree of water rights on behalf of the
Forest Service preserving water supplies for firefighting and other
vital activities on the National Forests. These successes have enabled
the government to restore damaged forest areas, provide millions of
board feet of salvaged timber to the public, create jobs to the
dependent economic communities, and collectively represent a signal
achievement in accomplishing the goals of the President's Healthy Forest
Initiative.

-   **Number range CHAPTER*United States v. ExxonMobil Corp.***

As part of its Petroleum Refinery Initiative, ENRD reached a landmark
Clean Air Act settlement with ExxonMobil Corporation and ExxonMobil Oil
Corporation. This comprehensive enforcement action addressed all seven
domestic petroleum refineries owned by ExxonMobil, located in five
separate states. The seven refineries represent approximately 11 percent
of the total refining capacity in the United States. Under the
agreement, ExxonMobil will reduce harmful air emissions of nitrogen
oxide and sulfur dioxide by more than 53,000 tons, at a cost of
approximately \$537 million, as well as upgrade its leak detection and
repair practices. Additionally, the company will pay a \$7.7 million
civil penalty, and spend \$6.7 million on supplemental environmental
projects (SEPs) in communities around the refineries. The ExxonMobil
settlement is the 17^th^ in a joint DOJ-EPA initiative to reduce
pollution in domestic petroleum refineries nationwide. With the entry of
the settlement decree, more than 75% of the nation's domestic refining
capacity is now under federally enforceable orders to come into
compliance with the Clean Air Act.

-   **Number range CHAPTER*United States, et al. v. Washington Suburban
    Sanitation Commission (WSSC)***

The United States won a major Clean Water Act victory against the
Washington Suburban Sanitation Commission (WSSC), in an enforcement
action brought to reduce or eliminate sanitary sewer overflows (SSOs)
that have been occurring in the WSSC sewage collection system. WSSC is
the sewerage authority for Montgomery County and Prince George's County,
Maryland. Under the terms of the consent decree, which is anticipated to
lead to more than \$200 million in sewer system improvements over 14
years, WSSC will undertake injunctive measures to address the alleged
violations. Such measures include comprehensive inspection,
rehabilitation, and repair requirements and changes in the operation and
maintenance of its collection system. The settlement also requires WSSC
to perform supplemental environmental projects, valued at \$4.4 million,
that will prevent or reduce chronic sewage overflows to regional
waterways, including the Chesapeake Bay, and the Anacostia, Patapsco,
Patuxent, and Potomac Rivers. Additionally, under the terms of the
consent decree, WSSC is required to pay a \$1.1 million civil penalty,
divided equally between the United States and Maryland. Five citizens
groups intervened in this action and joined the consent decree.

-   ***United States v. General Electric Co.***

The Division continues to vigorously enforce Superfund laws under the
Comprehensive Environmental Response, Compensation and Liability Act
(CERCLA). For example, the U.S. recently lodged a consent decree with
General Electric (GE), requiring the company to perform a \$100 million
dollar dredging project to remove PCB-contaminated sediments from the
Upper Hudson River, as well as pay up to \$78 million in EPA's past and
future response costs related to the project. For approximately 30
years, ending in the 1970's, GE discharged large quantities of PCBs into
the river from two major manufacturing facilities in Hudson Falls and
Fort Edwards, New York. The contaminants posed environmental and health
threats to river wildlife and people who eat fish from the river. The GE
settlement decree involves two phases of remedial action -- the initial
dredging, which will culminate in a comprehensive evaluation in order to
assure the process was completed safely and effectively, followed by an
optional (pending results of Phase 1 dredging) \$400 million subsequent
clean-up.

-   ***Kerr-McGee Corporation v. United States***

Through the use of alternative dispute resolution (ADR), and with the
assistance of a court-approved mediator, the United States was able to
favorably resolve a CERCLA claim by Kerr-McGee Corporation (now Tronox,
LLC) seeking to force the United States to pay approximately 70 percent
of the cost of cleaning up contamination in groundwater at Kerr-McGee's
former perchlorate manufacturing facility in Henderson, Nevada. The U.S.
Navy owned the ammonium perchlorate plant for 10 years before Kerr-McGee
Chemical purchased the site in 1962. The company discontinued commercial
production of ammonium perchlorate and began initial remediation efforts
after perchlorate was detected in a spring that discharges to the Las
Vegas Wash. Kerr-McGee spent over \$120 million between 1998 and 2005 to
clean up the perchlorate contamination. The case was settled by entry of
a consent decree requiring the United States to pay a share of
approximately 20--24% of Kerr-McGee's cleanup costs.

-   ***U.S. v. W.R. Grace & Co.***

Number range CHAPTERIn an appellate matter, the Ninth Circuit affirmed a
judgment of \$54.5M in cleanup costs for a Superfund removal action
conducted by EPA to address widespread asbestos contamination in Libby,
Montana. Grace contended that EPA had improperly classified the cleanup
as a "removal action", rather than classifying the work as a "remedial
action", which is subject to stricter regulatory requirements. Grace
also asserted that there was no basis for exceeding the generally
applicable cap of 12 months and \$2 million for removal actions. The
Ninth Circuit unanimously affirmed the district court judgment awarding
all past costs, and a declaratory judgment for future costs. The Court
also held that EPA had properly determined to exceed the general
statutory limits of 12 months and \$2 million for removal actions,
stating that "considering the widespread and pervasive asbestos
contamination and the potential for further migration of asbestos fibers
. . . the EPA's decision to exceed the statutory cap was not arbitrary
and capricious." The Court determined that the substantial expenditures
and time required above the general limits was required "given the
urgency, magnitude, and long-standing nature of the problem. In a
separate but related matter, ENRD is prosecuting W.R. Grace for multiple
criminal environmental violations in the Montana District Court. The
criminal case against Grace is scheduled to go to trial in September
2007.

-   ***Indian Water*** ***Rights Cases***

ENRD has settled a number of major water rights adjudications over the
past several months. Perhaps the most comprehensive Indian water rights
settlement involved the *Gila River Adjudication*, which was largely
resolved, in substance, in December 2004 when Congress enacted the
Arizona Water Settlements Act ("AWSA"). The AWSA "authorized, ratified,
and confirmed" the framework for the settlement of the water rights
claims of the Gila River Indian Community to the Gila River. After
enactment of the AWSA, the Interior and Justice Departments spent almost
a year negotiating amendments to the Settlement Agreement, to ensure
that the Agreement did not conflict with the AWSA. In another matter,
*Lummi Nation v. State of Washington*, the Division forged an agreement
among the State of Washington, the Lummi Nation and numerous private
water users, to resolve a lengthy and contentious lawsuit involving the
right to groundwater underlying the Lummi Peninsula in the State of
Washington. The agreement allocates to the Lummi Nation the vast
majority of the groundwater, while protecting the ability of non-Indians
to draw from existing wells. The settlement in another water rights
case, *Arizona v. California,* concluded a 35-year-long original Supreme
Court jurisdiction case involving rights to water from the Colorado
River. The settlement resolved the water rights claims of the Quechan
Indian Tribe and resolved any disagreement about the location of the
Tribe's Reservation boundaries in Arizona.

-   ***TOMAC v. Norton***

Number range CHAPTERIn a D.C. Circuit Court of Appeals case handled by
ENRD, the circuit court affirmed the district court's grant of summary
judgment upholding the Secretary of the Interior's decision to take land
into trust for the Pokagon Band of Potowatami Indians. TOMAC, an
anti-casino group, had asserted that the Secretary violated NEPA by
failing to prepare an environmental impact statement ("EIS") for the
acquisition, that the Band does not qualify as a "restored" tribe within
the meaning of the Indian Gaming and Regulatory Act ("IGRA"), and that
the Congressional Act which restored recognition to the Pokagon Band
violates the non-delegation doctrine. The D.C. Circuit found that
Interior had taken the required "hard look" at the potential impacts of
the Tribe's planned casino and recreation complex in its Environmental
Assessment ("EA") and supplement to the EA to satisfy NEPA requirements.
The court also rejected TOMAC's assertion that the Band was not a
restored Tribe within the meaning of IGRA. Finally, the Court rejected
TOMAC's assertion that the Pokagon Act was an unconstitutional
delegation of legislative authority.

-   ***Wildlife and Endangered Species Act (ESA) Cases***

Number range CHAPTERIn several cases, ENRD successfully defended the ESA
through interagency consultation regarding activities permitted by
federal agencies. In *City of Santa Clarita v. Department of Interior*
the City of Santa Clarita challenged a Fish & Wildlife Service (FWS)
biological opinion associated with a proposed sand and gravel mining
project for the CEMEX Company to be permitted by BLM on federal lands
near Santa Clarita, California. The Court agreed with ENRD that FWS
correctly concluded that the mining operations, with mitigation, were
not likely to jeopardize the existence of the unarmored three-spine
stickleback, a threatened fish, and otherwise rejected plaintiff's
contention that FWS' "no jeopardy opinion" and "incidental take"
statement were arbitrary. In *EPIC v. USFWS & NOAA Fisheries*, ENRD
prevailed on a motion to dismiss, and on plaintiffs' motion for
preliminary injunction, where plaintiffs sought to compel FWS and NOAA
to revoke an "incidental take" permit for Pacific Lumber's timber
program, or to compel reinitiation of consultation. The Court agreed
with us that plaintiff's suit was in part barred by *Heckler v. Cheney*
(S.Ct. 1985) because, in essence, it sought to circumscribe agency
enforcement. The Court also agreed that recent oil spills added no new
information which was not already adequately considered in a recent
biological opinion, that FWS had reasonably assessed the species current
status, and that the Court should defer to the expert federal agencies
in such matters.

**ENRDetails** \-- *Did You Know* ...

It is not unusual for some ENRD litigation to span several decades. For
many complex cases involving Indian territorial rights or federal water
rights, cases are [expected]{.underline} to last for a decade or more.
One example of a long-standing open case in the Environment Division is
*U.S. v. Truckee River General Electric Company*. The Truckee River case
was filed in March 1913, and remains open today. This case, filed during
the Woodrow Wilson administration, concerns the Orr Ditch and water from
the Truckee River and Lake Tahoe. The suit was brought by the U.S.
Reclamation Service (predecessor to the Bureau of Reclamation) to
quantify and clarify (adjudicate) water rights of upstream users in
Nevada. Although there have been partial resolutions in the *Truckee
River* adjudication, it remains an open and active case on ENRD's
docket.

**Criminal Cases**

-   ***Vessel Pollution Cases***

ENRD's Vessel Pollution Initiative is an ongoing, concentrated effort to
prevent ships from illegally discharging pollutants into the oceans,
coastal waters, and inland waterways. Over the past year, the Division
has won a number of successes resulting in criminal fines, mandated
community service projects, and probationary sanctions. In *U.S. v. MSC
Ship Management Ltd.*, the defendant -- a Hong Kong-based container ship
company -- pled guilty to charges that it engaged in conspiracy,
obstruction of justice, destruction of evidence, false statements and
violations of the Act to Prevent Pollution from Ships (APPS). As a
result, MSC Ship Management paid \$10.5 million in penalties, the
largest fine in which a single vessel has been charged with deliberate
pollution. An MSC ship engineer was sentenced to serve a one-year term
of probation. In *U.S. v. Wallenium Ship Management Ltd.*, a Singapore
shipping company pled guilty to conspiracy to violate APPS for failure
to maintain an oil record book, making false statements and writings,
and obstructing a government proceeding. Under the plea agreement, the
company has agreed to pay a \$5 million fine with an additional \$1.5
million payment devoted to community service projects. Wallenium will
also serve a three-year term of probation and implement an environmental
compliance plan.

-   ***McWane Cases***

![](media/image12.jpeg){width="0.9451388888888889in"
height="1.0694444444444444in"}

The Division has successfully prosecuted several companies owned by
McWane, Inc., a Birmingham-based company that has been cited by the U.S.
Occupational Health and Safety Administration (OSHA) hundreds of times
since the mid-1990s. In *U.S. v. McWane, Inc.*, the company was
sentenced to pay a \$5 million fine, serve a five-year term of
probation, and perform community service projects valued at \$2.7
million, for substantive Clean Water Act (CWA) violations, making false
statements and obstruction of justice. Several McWane corporate
executives were additionally sentenced to various lengths of home
confinement and probation, over \$125,000 in cumulative individual
fines, and hundreds of hours of community service. In *U.S. v. Pacific
States Cast Iron Pipe Company*, a Utah division of McWane, Inc., the
company pled guilty to making false statements and was sentenced to pay
a \$3 million fine plus serve a three three-year term of probation. In
*U.S. v. Atlantic States Cast Iron Pipe Company*, a Trenton-based McWane
subsidiary, the company itself, along with four corporate officials,
were found guilty of committing flagrant abuses of environmental and
worker safety laws. The charges in the *Atlantic States* case included,
among others, the regular discharge of oil into the Delaware River,
concealing serious worker injuries from health and safety inspectors,
and maintaining a dangerous workplace that contributed to multiple
severe injuries and the death of one employee at the company's plant.
The *Atlantic States* trial, which lasted nearly 7 months, was the
longest environmental criminal trial litigated by the federal Government
in U.S. history. Atlantic States and the convicted individuals each face
a maximum penalty of five years in prison, and a fine of \$500,000.

-   ***United States v. Robert Lucas, et al.***

ENRD reported a number of successes over the past year involving
protection of citizens from criminal Clean Water Act violations. In
*U.S. v. Lucas*, several individual defendants and two companies were
found guilty on 40 counts arising from their development of a large
tract of wetlands known as Big Hill Acres in southern Mississippi. They
were further convicted of conspiracy and mail fraud for selling home
sites on this property to hundreds of families despite numerous warnings
from public health officials that the illegal septic systems they were
installing in saturated soil were likely to fail, and could cause
contamination of the property and the drinking water aquifer. The named
defendant Lucas was sentenced to serve nine years in prison, followed by
three years supervised release, and to pay a \$15,000 fine.
Co-defendants Robbie Wrigley and M.E. Thompson, Jr., were each sentenced
to serve 87 months in prison, followed by three years supervised
release, and to pay a \$15,000 fine. Big Hill Acres, Inc., was ordered
to pay a \$4.8 million fine and sentenced to serve five years'
probation. Consolidated Investments, Inc. was sentenced to serve five
years' probation and is required to pay a \$500,000 criminal fine.

-   ***United States v. Dov Shellef dba Poly Systems, Inc., el al.***

The Environment Division recorded a major victory in the prosecution of
illegal sales of ozone-depleting chemicals in the *Dov Shellef/Poly
Systems* case. Dov Shellef, an individual doing business as Poly System,
Inc. and Polytuff USA, Inc., along with corporate executive William
Rubenstein, were sentenced after being convicted at trial of 87 counts
for conspiring to defeat the excise taxes on ozone-depleting chemicals,
money laundering, wire fraud, and a variety of tax violations. The
defendants represented to manufacturers that they were purchasing
CFC-113 for export, inducing the manufacturers to sell it to them
tax-free. The defendants then sold the product tax-free in the domestic
market without notifying the manufacturers or paying the excise tax.
Shellef was ordered to serve 70 months' incarceration and Rubenstein was
sentenced to 18 months' imprisonment. Both individuals will be held
jointly and severally liable for just under \$1.9 million in restitution
for the taxes due on domestic sales of trichlorotrifluoroethane, the
ozone-depleting chemical commonly referred to as CFC-113, or Freon. This
was the first criminal case involving CFC-113.

-   ***United States v. Beau Lee Lewis***

ENRD continues to enforce laws protecting wildlife, and the Division has
realized several important successes in this area over the past year. In
*U.S. v. Beau Lee Lewis*, the individual defendant was convicted of six
felony violations of conspiracy and smuggling statutes in a retrial of
charges connected with his importation of more than 300 protected
reptiles and amphibians into the U.S. in FedEx containers. In 1998,
Lewis was indicted for trafficking in some of the most rare and
endangered reptiles in the world. The endangered species traded by Lewis
and his co-conspirators include the Komodo Monitor (also called the
Komodo Dragon), the world's largest lizard, the Plowshare Tortoise,
believed to be the rarest tortoise species, the Chinese Alligator, the
False Gavial, and the Radiated Tortoise. These animals can bring upwards
of \$30,000 a piece on the black market. Lewis was convicted and
sentenced to serve 23 months' imprisonment, followed by three year's
supervised release, with special conditions related to wildlife
possession.

**ENRDetails** \-- *Did You Know* ...

President William Howard Taft appointed the Division's first AAG, Ernest
Knaebel, in 1911. Mr. Knaebel began his service to the Department of
Justice as a U.S. Attorney in Colorado. Immediately prior to assuming
his AAG duties, Knaebel was a Special Assistant to the Attorney General.
After his tenure as AAG ended in 1916, Ernest Knaebel became the 11^th^
Reporter of Decisions for the U.S. Supreme Court. Mr. Knaebel was the
longest-serving Reporter of Decisions, with his work spanning four
decades, from 1916 to 1944. The Reporter of Decisions of the United
States Supreme Court is the official charged with editing and publishing
the Court\'s decisions both when announced and in the bound volumes of
the United States Reports.

2.  **[Performance and Resources Table]{.underline}**

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height="6.315277777777778in"}

**[Performance and Resources Table (Cont.)]{.underline}**

![](media/image14.wmf){width="9.797222222222222in"
height="4.238194444444445in"}

**[Performance Measure Table]{.underline}**

![](media/image15.wmf){width="9.79861111111111in"
height="3.5368055555555555in"}

**3. [Performance, Resources, and Strategies]{.underline}**

> The Environment and Natural Resources Division contributes to the
> Department's Strategic Goal Two: Enforce Federal Laws and Represent
> the Rights and Interests of the American People. The decision unit's
> resources specifically address the Department's Strategic Objective
> 2.5: Enforce federal statutes, uphold the rule of law, and vigorously
> represent the interests of the United States in all matters for which
> the Department has jurisdiction. The Division focuses on both civil
> and criminal litigation within this strategic objective. An
> explanation by litigating activity follows.

**Criminal Litigating Activities**

***A. Performance Plan and Report for Outcomes***

> Vigorous prosecution remains the cornerstone of the Department's
> integrated approach to ensuring broad-based environmental compliance.
> It is the goal of investigators and prosecutors to discover and
> prosecute criminals before they have done substantial damage to the
> environment (including protected species), seriously affected public
> health, or inflicted economic damage on consumers or law-abiding
> competitors. The Department's environmental protection efforts depend
> on a strong and credible criminal program to prosecute and deter
> future wrongdoing. Highly publicized prosecutions and tougher
> sentencing for environmental criminals are spurring improvements in
> industry practice and greater environmental compliance. Working
> together with federal, state and local law enforcement, the Department
> is meeting the challenges of increased referrals and more complex
> criminal cases through training of agents, officers and prosecutors,
> outreach programs, and domestic and international cooperation.

**Performance Results**

**I. [Performance Measure]{.underline} - Percent of Criminal
Environmental Cases Successfully Resolved \[ENRD Only\]**

-   ***FY 2006 Target: 85%***

-   ***FY 2006 Actual: 94%***

-   ***FY 2006 ENRD Resources Expended: \$10.3 million***

> [Discussion:]{.underline} FY 2006 proved to be a particularly strong
> year for criminal enforcement in ENRD's Environmental Crimes Section
> (ECS). Through the end of the fiscal year, the Environmental Crimes
> Section successfully litigated several guilty verdicts through jury
> trials and pleas. Successes include two major international shipping
> companies which agreed to pay fines of \$10.5 million and \$5 million,
> respectively, and also perform community service and serve various
> terms of probation. The \$10.5 million plea is the largest fine ever
> imposed on a single vessel which has been charged with deliberate
> pollution. In another case, involving McWane Inc.'s Atlantic States
> Cast Iron Pipe Company, ENRD secured guilty verdicts against the
> company and several officers of the company. The company was sentenced
> to pay a \$5 million fine, serve a five-year term of probation, and
> perform community service projects valued at \$2.7 million for
> substantive Clean Water Act (CWA) violations, making false statements
> and obstruction of justice. Several McWane corporate executives were
> additionally sentenced to various lengths of home confinement and
> probation, over \$125,000 in cumulative individual fines, and hundreds
> of hours of community service. The *Atlantic States* trial, which
> lasted seven months, was the longest environmental criminal jury trial
> ever litigated by the federal Government.
>
> To date, FY 2007 has proven to be equally fruitful from a criminal
> perspective. Under ECS's Vessel Pollution Initiative, the Division
> secured an agreement to pay over \$37 million from Overseas
> Shipholding Group (OSG) after pleading guilty to 33 felony counts
> related to deliberate vessel pollution from nine ships and false
> pollution log entries from three additional ships. OSG is a U.S.
> corporation headquartered in New York and is one of the largest
> publicly traded tanker companies in the world. ECS has also logged a
> plea agreement with Sinclair Tulsa Refining Company, which plead
> guilty to two felony Clean Water Act violations for deliberately
> manipulating wastewater discharges at its Tulsa refinery. In
> conjunction with its plea, Sinclair will make a community service
> payment of \$500,000 which will be paid into an environmental fund.

[FY 2006 Performance Plan Evaluation:]{.underline} Based on the
end-of-the-fiscal-year performance data, we exceeded our original goal
by 9 percent for FY 2006.

> [FY 2007/2008 Performance Plan:]{.underline} Considering our past
> performance, we have increased our targets to 90 percent of cases
> successfully litigated in FY 2007 and FY 2008, respectively. ENRD
> targets are set lower than the actual performance so that there is no
> incentive to ramp up prosecutions or lawsuits against insignificant
> targets for "easy" wins solely to meet higher targets. Such an
> approach would do a disservice to the public by steering litigation
> away from more complicated problems facing the country's environment
> and natural resources. The past 7 years of data demonstrates that our
> targets, set at achievable levels, have not deterred high performance
> as shown in the actual successes.
>
> [Public Benefit:]{.underline} The Division continues to produce
> successful criminal prosecutions relating to environmental statutes.
> These successes ensure compliance with the law and lead to specific
> improvements in the quality of the environment of the United States,
> and the health and safety of its citizens. Additionally, ENRD has had
> numerous successes in prosecuting vessels for illegally disposing of
> hazardous materials into United States waterways. These successes have
> improved the quality of our waterways and promoted compliance with
> proper disposition of hazardous materials. Also, the Division has
> successfully prosecuted numerous companies for violations of
> environmental laws which endangered their workers. Our successes lead
> to safer workplaces and fewer lives lost to hazardous conditions.

**II. [Performance Measure]{.underline} - \$ Awarded in Criminal
Environmental Cases \[ENRD Only\]**

-   ***FY 2006 Target: In accordance with Department guidance, targeted
    levels of performance are not projected for this indicator.***

-   ***FY 2006 Actual: \$70.4 million***

> [Discussion:]{.underline} Additional criminal successes in FY 2006
> include a guilty verdict in a Clean Water Act enforcement action
> against a Mississippi home builder. In *United States v. Robert
> Lucas*, the developer was sentenced to serve nine years in prison for
> violating the CWA by illegally filling in wetlands, and for conspiracy
> and mail fraud for selling homes to hundreds of families despite
> warnings from public health officials that the illegal septic systems
> installed in saturated soil were likely to fail.
>
> [FY 2007/2008 Performance Plan:]{.underline} Not Applicable. In
> accordance with Department guidance, levels of performance for FY 2007
> and FY 2008 are not projected for this indicator. Many factors affect
> our overall performance, such as proposed legislation, judicial
> calendars, etc. The performance of the Division also tends to realize
> spikes and valleys when large cases are decided. Therefore, we do not
> project annually, but our goal is to improve overall performance over
> a 5-year span.
>
> [Public Benefit:]{.underline} The Division continues to obtain
> criminal fines from violators, thereby removing economic benefits of
> non-compliance and leveling the playing field for companies that
> comply with environmental laws. Additionally, our prosecution efforts
> deter others from committing crimes and promote adherence to
> environmental and natural resource laws and regulations. These efforts
> result in the reduction of hazardous materials and wildlife violations
> thereby improving the quality of the United States' waterways,
> airways, land, and wildlife resulting in improved public health and
> safety.

**B. Strategies to Accomplish Outcomes**

> The Division will continue efforts to obtain convictions and to deter
> environmental crimes through initiatives focused on laboratory fraud,
> chlorofluorocarbon (CFC) smuggling, vessel pollution, transportation
> of hazardous materials and worker safety. ENRD will also continue to
> prosecute international trafficking of protected species of fish,
> wildlife, and plants with a host of international treaty partners.
>
> International trade in wildlife is second in size only to the illegal
> drug trade, and our criminal prosecutors work directly on these cases,
> as well as assist United States Attorneys Offices and share ENRD
> expertise nationwide with state and federal prosecutors and
> investigators. We will focus on both interstate trafficking and
> poaching cases on federal lands, and seek to ensure that wildlife
> conservation laws are applied uniformly and enforced across the
> country, seeking consistency in the United States' position in these
> criminal prosecutions and a vigorous enforcement program that serves
> as an international role model.
>
> ENRD has partnered with other federal agencies, such as EPA, to pursue
> litigation against criminal violators of our nation's environmental
> policies. Egregious offenders are being brought to justice daily. The
> Division has worked collaboratively to identify violators who pose a
> significant threat to public health. By prosecuting criminal
> violations of regulations, ENRD is forcing compliance and discouraging
> continued disregard for public health.

**ENRDetails** \-- *Did You Know* ...

The longest trial in U.S. history involving environmental crimes was
litigated by the Environment and Natural Resources Division from
September 2005 through April 2006. The nearly seven-month long jury
trial involved New Jersey cast iron pipe manufacturer, Atlantic States
Cast Iron Pipe Co. (a subsidiary of McWane, Inc.), and five company
officials who were charged with violating environmental and worker
safety laws. Five of the six defendants were found guilty of the
charges, which included the regular discharge of oil into the Delaware
River, concealing serious worker injuries from health and safety
inspectors, and maintaining a dangerous workplace that contributed to
multiple severe injuries and the death of one employee at the plant.

**Civil Litigating Activities**

***A. Performance Plan and Report for Outcomes***

> The Department enforces environmental laws to protect the health and
> environment of the United States and its citizens, defends
> environmental challenges to government programs and activities, and
> represents the United States in all matters concerning the protection,
> use, and development of the nation\'s natural resources and public
> lands, wildlife protection, Indian rights and claims, and the
> acquisition of federal property.

**Performance Results**

**I. [Performance Measure]{.underline} - Percent of Civil Environmental
Cases Successfully Resolved \[ENRD Only\]**

-   ***FY 2006 Target:***

> ***85% Affirmative; 75% Defensive***

-   ***FY 2006 Actual:***

> ***97% Affirmative; 93% Defensive***

-   ***FY 2006 ENRD Resources Expended: \$82.1 million***

> [Discussion]{.underline}: The Division enjoyed numerous successes
> during FY 2006. ENRD's continuing Clean Air Act enforcement efforts
> resulted in five consent decrees under ENRD's Petroleum Refinery
> Initiative. The five enforcement actions concerned ExxonMobil Corp.,
> ConocoPhillips Co., Valero Energy Corp., Sunoco Refinery, Inc., and
> Chalmette Refining LLC. These five settlements require the
> installation of controls that will reduce air pollutant emissions by
> over 150,000 tons per year at a cost of over \$2 billion dollars to
> the companies. The companies will also pay over \$20 million in civil
> penalties and perform environmental service projects valued at over
> nearly \$30 million. With these additional settlements, the Division
> will have addressed more than 80 refineries comprising approximately
> 76% of the nation's total refining capacity.
>
> ENRD's Environmental Defense Section (EDS) has continued its vigorous
> defense of various provisions in the Clean Water Act (CWA), and in FY
> 2006 obtained a number of favorable resolutions in its assigned cases.
> For example, in *Citizens Coal Council v. EPA*, petitioners challenged
> effluent limitations guidelines and new source performance standards
> for subcategories within the coal mining industry. The Division
> successfully sought *en banc* reversal from the Sixth Circuit Court of
> Appeals of a prior adverse panel decision in which the court had held
> that EPA incorrectly applied statutory factors in settling effluent
> limitations. The Sixth Circuit further upheld EPA's use of *best
> management practices* in lieu of numerical effluent limitations in its
> treatment of discharges from coal mines.
>
> Moreover, the Division's successes are highlighted by litigation
> related to administration of the Northwest Forest Plan. ENRD helped
> secure a favorable decision in *ONRC v. Allen*, a challenge to a
> biological opinion authorizing two years\' worth of timber sales in an
> area of Oregon. Plaintiffs raised a number of arguments about effects
> on the northern spotted owl and its habitat. The Ninth Circuit
> remanded for further proceedings on several narrow questions, but did
> not rule for plaintiffs on any issue. This is one of two Ninth Circuit
> cases the Division has handled that involve challenges to the
> administration of the Northwest Forest Plan. Had they succeeded,
> certain plaintiffs\' arguments could have had nationwide implications.
>
> The first quarter or FY 2007 has been marked by notable civil
> litigation successes as well. In December 2006, the United States
> District Court for the Southern District of Indiana entered a consent
> decree resolving violations of the Clean Water Act by the City of
> Indianapolis. The Consent Decree requires the City to undertake
> extensive work to reduce or eliminate illegal discharges from its
> sanitary sewers and overflows from the portions of its sewer system
> where storm water and sanitary sewage are combined. Number range
> CHAPTERUnder the consent decree, the City will implement a Long Term
> Control Plan on a twenty-year schedule at an estimated cost of \$1.86
> billion. In addition, the City will perform a pollution reduction
> supplemental environmental project (SEP) valued at \$2 million and pay
> a civil penalty of \$1,177,800, of which \$588,900 will go to the
> United States and the other \$588,000 will go to Indiana. The
> injunctive relief provided under the settlement will ultimately reduce
> the volume of Indianapolis' combined discharges by over 90 percent, or
> an average of 7.2 billion gallons per year out of its current average
> of 7.9 billion gallons per year.
>
> [FY 2006 Performance Plan Evaluation]{.underline}: Based on
> end-of-the-fiscal-year performance data, we exceeded our Affirmative
> and Defensive goals by 12 percent and 18 percent, respectively for FY
> 2006.
>
> [FY 2007/2008 Performance Plan:]{.underline} Considering our past
> performance, we aim to reach 85 percent Affirmative and 75 percent
> Defensive (average of 80%) as our rates of cases successfully
> litigated for FY 2007 and FY 2008. ENRD's targets are set lower than
> the actual performance so that there is no incentive to ramp up
> prosecutions or lawsuits against easy targets solely to meet an
> "ambitious" goal. This sort of easy approach would do a disservice to
> the public by steering litigation away from more difficult problems
> facing the country's environment and natural resources. The past 7
> years of data demonstrates that our targets, set at achievable levels,
> have not deterred the high performance as shown in the actual
> successes.
>
> The successes delineated in the "Accomplishments" section of this
> document demonstrate the Division's effectiveness at defending the
> nation's environmental laws. By receiving full base funding in FY
> 2008, ENRD hopes to maintain our success rates while effectively
> defending the United States. If ENRD cannot offer a strong defense,
> the Executive Branch's ability to enforce regulatory compliance or
> defend policy challenges may be seriously impaired. For example, the
> Division's efforts on behalf of Indian Tribes have been successful to
> date. However, if ENRD is forced to fully litigate the growing number
> of cases with limited resources, the resulting impact would be delays
> in resolution and unnecessary expenditures against the federal
> coffers.
>
> [Public Benefit:]{.underline} The success of the Department ensures
> the correction of pollution control deficiencies, reduction of harmful
> discharges into the air, water, and land, clean-up of chemical
> releases, abandoned waste, and proper disposal of solid and hazardous
> waste. In addition, the Department's enforcement efforts help ensure
> military preparedness, safeguard the quality of the environment in the
> United States, and protect the health and safety of its citizens.

[]{.mark}

**II. [Performance Measure]{.underline} - Costs Avoided and \$ Awarded
in Civil Environmental Cases \[ENRD Only\]**

-   ***FY 2006 Target: In accordance with Department guidance, targeted
    levels of performance are not projected for this indicator.***

-   ***FY 2006 Actual: \$803 million avoided; \$270 million awarded***

> [Discussion:]{.underline} In FY 2006, Number range CHAPTERENRD
> litigated to judgment several other large sewage cases in various
> locations across the U.S. In January 2006, the District Court for the
> District of Hawaii entered a consent decree resolving Clean Water Act
> violations resulting from discharges along major roadways, at
> construction sites, and at three airports. The consent decree requires
> the State of Hawaii to undertake comprehensive corrective measures --
> at an estimated cost of \$60 million -- over the next five years, as
> well as pay a \$1 million civil penalty and perform \$1 million in
> environmental community service projects. In June 2006, the District
> Court of Idaho entered two consent decrees resolving stormwater
> violations related to road building projects. Under the terms of the
> Idaho decrees, defendants will pay nearly \$900,000 in civil penalties
> and undertake various actions to better train their employees. In
> August 2006, the District Court for the Northern District of Texas
> entered a consent decree in *U.S. v. City of Dallas*, settling the
> City's violations of the CWA by failing to adequately staff and
> implement its storm water management program. The decree requires the
> City to undertake comprehensive injunctive relief, pay a civil penalty
> of \$800,000 and spend \$1.2 million on environmental projects.

[]{.mark}

[]{.mark}

> Through the first quarter of FY 2007, ENRD has already realized a
> number of civil environmental enforcement successes. In December 2006,
> the U.S. District Court for the Western District of Michigan entered a
> consent decree resolving Clean Air Act claims against CEMEX
> Corporation, St. Mary's Cement, Inc., and St. Barbara Cement, Inc.
> relating to particulate matter emissions at one of Michigan's largest
> cement manufacturing facilities. Under the proposed consent decree,
> current plant operators -- St. Mary's and St. Barbara -- will install
> a new baghouse costing approximately \$11 million in order to
> eliminate the violations and perform a major emissions reduction
> supplemental environmental project valued at \$1.45 million. Former
> operator CEMEX will pay a civil penalty of \$1.4 million under the
> consent decree.
>
> [FY 2007/2008 Performance Plan:]{.underline} Not Applicable. In
> accordance with Department guidance, levels of performance for FY's
> 2007 through 2008 are not projected for this indicator. There are many
> factors that affect our overall performance, including proposed
> legislation, judicial calendars, etc. The performance of the Division
> tends to realize spikes and valleys when large cases are decided.
> Therefore, we do not project annually, but our goal is to improve
> overall performance in a 5-year span.
>
> []{.mark}

**III. [Efficiency Measures]{.underline}**

> **1) Total Dollar Value Awarded per \$1 Expenditures**
>
> **\[Affirmative / ENRD Only\]**
>
> **2) Total Dollars Saved the Government per \$1 Expenditures
> \[Defensive / ENRD Only\]**

-   ***FY 2006 Target: \$75 awarded; \$16 saved***

-   ***FY 2006 Actual: \$75 awarded; \$14 saved***

> [Discussion:]{.underline} The Division had an outstanding FY 2006 in
> its efforts to secure commitments by polluters to take action to
> remedy their violations of the nation\'s environmental laws. Actions
> taken by the Division in Federal courts resulted in over \$4.1 billion
> in settlements and court ordered injunctive relief. Additionally, the
> Division saved the government more than \$800 million in defensive
> litigation. Number range CHAPTERThese successes, and the Division's
> enforcement work generally, have produced significant gains for the
> public fisc, public health, and the environment. The Division
> routinely saves the American taxpayer hundreds of millions of dollars
> -- many times the Division's annual budget.
>
> [FY 2007/2008 Performance Plan:]{.underline} Considering the Number
> range CHAPTERexemplary record in protecting the environment, Indian
> rights, and the nation's natural resources, wildlife, and public
> lands, the Division established ambitious targets through FY 2008. The
> out-year performance goals were set at approximate target levels.
> Thus, the Division will monitor future year performance levels and
> make the necessary adjustments to reflect actual performance levels.
> The Division anticipates continued successes through Number range
> CHAPTERvigorous enforcement which generally will produce settlements
> and significant gains for the Number range CHAPTERpublic and the
> public fisc.

[]{.mark}

[]{.mark}

> [Public Benefit:]{.underline} The Division's efforts to defend federal
> programs, ensure compliance with environmental and natural resource
> statutes, win civil penalties, recoup federal funds spent to abate
> environmental contamination, ensure military preparedness, and ensure
> the safety and security of our water supply, demonstrate that the
> United States' environmental laws and regulations are being vigorously
> enforced. Polluters who violate these laws are not allowed to gain an
> unfair economic advantage over law-abiding companies. The deterrent
> effect of the Division's work encourages voluntary compliance with the
> environmental and natural resource laws, thereby improving the
> environment, the quality of our natural resources, and the safety and
> health of United States citizens.

**B. Strategies to Accomplish Outcomes**

> As our environment changes, so do the actions we take to preserve the
> health and life of those residing within the borders of the United
> States. Environmental groups and other interested parties challenge
> Administration policies every year. ENRD is responsible for defending
> federal agencies carrying out Administration policies every day. The
> Division has realized some remarkable successes to date. In an effort
> to continue our successful record of litigation, the Division has
> sought new and creative ways to utilize our limited resources. ENRD
> has adopted a policy of "porosity" whereby specialized attorneys are
> provided an opportunity to work on cases outside of their expertise to
> gain perspective and depth. This policy has resulted in more
> flexibility to shift workloads between attorneys when they become
> overburdened. Although cross-training staff grows our workforce's
> skills and abilities, it does not address long-term caseload issues.
>
> The Division works collaboratively with client agencies towards
> adjudications and settlements. These alternative methods of resolution
> are less contentious and save the government expenses associated with
> full-blown litigation. Water rights adjudications, reclamations, and
> inverse takings cases are typically handled in settlement mode versus
> litigation mode. Settlements have the best outcome, and reach the
> largest number of people. In order to continue achieving successful
> settlements, ENRD must remain committed to collaborative negotiations
> with all interested parties. If a policy shift occurs, ENRD will be
> forced to take a more aggressive litigation stance, which would be
> costly without demonstrating added value for the Federal Government.
>
> The Division's Environmental Enforcement Section is turning its
> attention to air toxic pollutants, mineral processing plant violations
> of RCRA, and industry practices that result in toxic emissions in
> violation of the Clean Air Act. EPA has been performing inspections of
> industries previously protected under the Bevel Amendments, but no
> longer exempt from the statutory requirements. To date, EPA has found
> 100 percent non-compliance in these inspections. Numerous resulting
> case referrals are expected, with ENRD prosecuting as many as our
> resources will allow.

**ENRDetails** \-- *Did You Know* ...

The Environment and Natural Resources obtained its largest-ever civil
penalty in 2003 \-- \$34 million \-- through a settlement with Colonial
Pipeline Company. The Clean Water Act charges against Colonial alleged
multiple violations totaling 1.45 million gallons of spilled oil from
the company's 5,500 mile pipeline in five states. Atlanta-based Colonial
Pipeline is the largest-volume pipeline transporter of refined petroleum
products in the world, moving an average of 83 million gallons of
petroleum products each day through an underground pipeline that
stretches from Port Arthur, Texas, to Linden, N.J., passing through
Louisiana, Mississippi, Alabama, Georgia, Tennessee, South Carolina,
North Carolina, Virginia, the District of Columbia, Maryland, and
Pennsylvania. The government maintained that pipeline corrosion,
mechanical damage, and operator error in seven spills resulted in the
release of approximately 1.45 million gallons of oil and other petroleum
products into the environment, including numerous rivers, streams, and
wetlands. Oil spills from the pipeline damaged a variety of aquatic
systems. In one spill alone, more than 950,000 gallons of diesel fuel
spilled into the Reedy River in South Carolina, killing 35,000 fish and
other species of wildlife, and dispersing more than 34 miles downstream.

[Further Strategies to Accomplish Outcomes]{.underline}

The Department will continue to focus on tribal land and water claims,
as well as issues pertaining to jurisdiction on Indian trust lands.
Increased resources are necessary to execute a solid defense in Tribal
Trust cases where the Federal Government's liability is in the hundreds
of billions of dollars. In addition, we will continue to resolve cases
that establish jurisdiction for law enforcement authorities over member
and nonmember Indians, as well as non-Indians inside reservation
boundaries, which is essential for effective law enforcement.
Furthermore, the Department will litigate to address other issues
regarding jurisdiction; to establish and protect treaty-based hunting
and fishing rights; and to deter and remediate pollution problems on
Indian lands. A detailed description of the Tribal Trust FY 2008 budget
request is provided below.

**Description of Program Increase**

**Item Name: Tribal Trust**

Budget Decision Unit(s): Environment and Natural Resources Division

Strategic Goal(s) & Objective(s): [Strategic Goal Two, Objective
2.5]{.underline} - Enforce federal

statutes, uphold the rule of law, and vigorously represent

the interests of the United States in all matters for which

the Department has jurisdiction.

Organizational Program: *Natural Resources Section (NRS)*

Component Ranking of Item: [1]{.underline} of [1]{.underline}

Program Increase: Positions [17]{.underline}, FTE [9]{.underline},
Litigation Support [\$2.6 million]{.underline},

**Total Dollars [\$3,951,000]{.underline}**

**JUSTIFICATION**

**Description of Item**

ENRD is requesting 17 positions (10 attorneys), 9 FTEs, and \$3,951,000
to defend the United States in the high-profile, high-stakes Indian
Tribal Trust litigation.

The United States has been sued in approximately 104 cases filed by
about 80 Tribes in various United States District Courts and in the
United States Court of Federal Claims. Two of the cases feature requests
to certify classes of over 250 Tribal plaintiffs. If such requests are
granted, the United States will have been sued by more than 300 Tribes.

The Government holds and manages approximately 56 million acres of land
and resources in trust for the benefit of individual Indians and Tribes.
Of these 56 million acres, nearly 46 million acres are held in trust
specifically for Indian Tribes. On these lands, the Government manages
over 100,000 leases for individual Indians and Tribes. About \$500
million per year in leasing, use permits, land sale revenues, and
interest income are collected in 1,450 tribal accounts for some 300
Tribes. In total, the Government manages annually about \$3 billion in
Tribal funds. Congress has delegated most of the trust functions to the
Interior Department (principally, the Bureau of Indian Affairs and the
Office of the Special Trustee for American Indians) and several
custodial duties to the Treasury Department.

In the Tribal Trust cases, the Tribes allege that the Government should
be ordered to prepare a "full and complete historical accounting" of the
Tribes' trust fund accounts and non-monetary trust resources and to pay
damages for allegedly mismanaging the Tribes' trust funds and
non-monetary trust resources. Specifically, the Tribes claim that the
Government has failed to provide an accounting of the monies that it has
collected, managed, and disbursed, as well as the non-monetary trust
resources that it has administered, on the Tribes' behalf. Additionally,
the Tribes claim that the Government has mismanaged the Tribes' trust
funds and non-monetary trust resources, such as timber, oil, gas, and
other minerals. In the 104 presently filed cases, the Tribes claim that
they are owed damages exceeding \$220 billion.

The Tribal Trust cases are extraordinarily complex, both legally and
factually. They involve records of economic activity conducted on Tribal
lands for over 100 years. Tribal lands have been and continue to be used
for a wide variety of revenue-producing activities, including grazing,
farming, oil and gas development, timber harvesting, hydroelectric power
generation, and minerals extraction. Similarly, Tribal funds have been
and continue to be collected, deposited, transferred, disbursed, and
invested. These activities generate transactional documentation, which
must be identified, collected, imaged, coded, managed, reviewed, and
analyzed, in order to provide competent representation of the Government
in litigation, formal alternative dispute resolution (ADR) processes, or
informal settlement discussions.

While about 86 of the 104 current cases were filed after November 2005
(some 72 cases were filed in the last week of December 2006 alone), 25
cases were filed in or shortly after January, 2002, with several being
filed in the 1979-2000 timeframe. Consequently, many of the Tribal Trust
cases have reached a level of procedural maturity so that they are in
active formal discovery or informal document and informational exchanges
with the Tribes. In the Spring of 2006, the *Osage* case proceeded to
trial, and several others are currently proceeding on a trial track.
Notwithstanding its best efforts at conservative resource management,
ENRD struggles to maintain adequate staff to take the Tribal Trust cases
to trial or completion of the ADR or informal settlement process. Also,
ENRD lacks adequate funds to support the litigation, manage the
discovery process, or handle over 150 million pages of relevant
documentation that are associated with the currently filed Tribal Trust
cases and that are located at disparate locations across the country. As
such, we have relied upon litigation support contractors to perform
these and other necessary tasks.

The Tribal Trust cases are counterparts to *Cobell v. Kempthorne*, which
is a class-action lawsuit brought on behalf of 300,000-500,000
individual Indians demanding "full and complete historical accountings"
of their individual Indian money (IIM) accounts. Of the 46 Tribal Trust
cases that have been brought in the United States District Courts, 36 of
them have been assigned to the same judge who is presiding over
*Cobell*, because they were deemed factually and legally similar. In
*Cobell*, the previous presiding judge (Judge Lamberth) held the
Secretaries of the Interior and Treasury, as well as other Presidential
appointees, in civil contempt in 1999, in part because of agency
failures to comply with court orders regarding discovery. That civil
contempt citation is precedent-setting and remains undisturbed to this
day. Further, the *Cobell* plaintiffs have alleged civil and criminal
contempt charges against over 50 other government attorneys and agency
program staffers. Many of those charges arise from claims of document
mismanagement. Adequate and competent document management will be one of
the primary responsibilities addressed by this requested budget
enhancement.

In July 2006, the United States Court of Appeals for the D.C. Circuit
granted the Government's motion to reassign *Cobell* to a different
judge because of Judge Lamberth's demonstrated bias against the
Government. The Tribal Trust cases were reassigned as well because of
their relation to *Cobell*.

This reassignment of *Cobell* and the Tribal Trust cases from Judge
Lamberth may decrease the risk of contempt citations or sanctions for
government attorneys and agency program staffers working on those cases.
It may also provide the Government with a more objective, impartial
court in which to try these matters.

At the same time, however, the Government will still face the same
vulnerabilities and exposures on substantive factual and legal issues,
and the same document management burdens, as it did before. Therefore,
the reassignment does not change the litigation support needs -- or
their nature and magnitude \-- of the Tribal Trust cases.

Indeed, the litigation support needs in the Tribal Trust cases could
increase. Until his reassignment, Judge Lamberth had devoted most of his
time and attention to *Cobell* and thus had allowed the parties in the
Tribal Trust cases to continue in informal settlement discussions
without significant oversight or requirements by the Court. The newly
assigned Judge may be less patient or tolerant with this process, and he
may require the parties to conduct or complete their informal settlement
discussions on an expedited schedule or to proceed to litigation. This
concern is especially warranted in the 58 cases that are pending in the
Court of Federal Claims and the 10 cases that are pending in the
District Courts in Oklahoma. Many of the judges on the Court of Federal
Claims have been and continue to be very aggressive in moving the cases
on their dockets and, therefore, not patient or tolerant about the
parties' or the Government's bid for more time to comply with court
orders or to resolve matters informally or administratively.

Further, there is a chance that the *Cobell* litigation may be resolved
through a legislative solution. If that were to occur, the focus of the
Judge newly assigned to *Cobell* would most likely turn to the Tribal
Trust cases. In other words, certain circumstances may lead to a more
expedited track for resolution of the Tribal Trust cases, which would
bring the attendant need for sufficient staff and resources to manage
and enable adequate representation of the Government in these
document-intensive and complicated cases.

It is important that ENRD devote sufficient resources to the Tribal
Trust cases to avoid significant financial exposure and risk for the
Government. Other consequences may include huge and unnecessary monetary
awards at taxpayer expense, significant negative publicity, and a public
loss of confidence in the Government in general, and, in particular, the
Interior and Treasury Departments.

**Summary Discussion of Staffing Increase**

The Tribal Trust cases will require many years of attorney time before
disposition, regardless of the manner (i.e., active litigation, ADR, or
informal settlement), in part because of the volume of documentation
required to be examined in the course of performing an accounting and
the enormous amount of work required to defend resource mismanagement
claims. For example, the last case handled by ENRD under the 1946 Indian
Claims Commission Act (ICCA)---which permitted similar claims by Tribes
to be brought and adjudicated administratively---has just recently been
concluded. So far, the Government has paid to various Tribes
approximately \$3.5 billion in judgments or settlements of the ICCA
cases. This figure represents a fraction of the amounts actually claimed
by the Tribes. It was only through intensive litigation efforts that
ENRD was able to so limit the awards. At the height of the litigation,
ENRD dedicated an entire Section of attorneys and support staffers to
defending the cases. ENRD's litigation efforts (which included document
acquisition, management, and performance of accountings) were supported
by the Indian Trust Accounting Division (ITAD) (formerly a component of
the General Services Administration (GSA)), which, at one point, had
over 100 employees, including staff accountants. Because of the
conclusion of the ICCA litigation, GSA disbanded ITAD and shuttered its
operations for good on September 30, 2006.

ENRD is currently staffing the 104 Tribal Trust cases with about 13
attorneys (full-time equivalents) and no full-time paralegals or support
staff (other than contractors). The Interior Department does not have
the ability, funding, or resources to prepare accountings to the Tribes
that have demanded one. Nor does it have the ability, funding, or
resources to provide adequate staff or litigation support to ENRD. In
fact, Interior relies heavily on ENRD's attorney and litigation support
contractor staff to perform many of the tasks and obligations that would
ordinarily be discharged by the agency. The Division receives minimal
reimbursement funding for this effort. The same applies to Treasury's
efforts. ITAD is no longer a relevant support factor because it has been
disbanded permanently.

ENRD's FY 2008 Tribal Trust staffing request is reflective of the
litigation challenges that we expect to encounter as the cases become
more mature and more active. The 72 new cases that were filed before the
expiration of a statute of limitations for filing certain Tribal trust
claims comprise one of the primary factors driving our need for
additional staff. Currently, ENRD is handling a docket of 104 active
Tribal trust cases. Therefore, approximately 10 additional attorneys
will be required to accommodate the expanded docket and to compose
memoranda, correspondence, and motions, and to coordinate information
and document exchanges between the Tribes and the Government
(particularly the Interior and Treasury Departments). Presuming that a
number of the currently filed cases engage in depositions, hearings, and
trial, we believe that additional attorney resources will be required to
represent the Government's interests effectively in those venues. Our
experience has taught us that the establishment of an active,
cooperative, and attentive working relationship with the Tribes and
their counsel will allow us to litigate these cases under preferential
timetables and conditions. We need additional attorney resources in
order to cultivate and maintain these favorable terms.

With the increase in the expected number of case filings -- combined
with the increase in maturity, complexity and general activity of the
existing and prospective cases -- ENRD anticipates particularly
stringent litigative demands in the area of document management. We have
already acquired and processed (scanned and coded) over 17 million pages
of relevant documents for the Tribal Trust cases. The current and future
cases are likely to generate over 150 million pages of documents that
must be identified, processed, and managed.

The original impetus for many of the Indian trust lawsuits -- and the
root cause of many of the adverse rulings and orders in the Tribal Trust
cases and *Cobell* (not to mention the civil contempt citation and
various court-imposed sanctions in *Cobell*) -- was related in one way
or another to poor document management practices. We do not want to
relive any of these clearly avoidable mistakes. The requested number of
paralegals (5) and support staff (2) will help assure that our document
production and retention responsibilities are met. This staff will not
only manage document inflows and outflows during the discovery phase of
litigation, but they will also be instrumental in gathering and
organizing documents for depositions (i.e., witness binders) and in
preparation for trial (i.e., trial exhibits). In the *Osage* case, in
which ENRD conducted a limited trial in the Spring of 2006, the Division
produced a total of 399 trial exhibit binders (seven sets of 54
binders), which contained over 268,000 pages of exhibits. We had to
detail paralegals and support staff from other important division
matters in order to assemble and prepare the trial exhibits for *Osage*.

**Summary Discussion of Litigation Support Increase**

Number range CHAPTERENRD's litigation support needs for the Tribal Trust
Cases can be generally classified into four categories: (1) contractor
labor, (2) document management, (3) trial support, and (4) "Support
Center" costs.

**Contractor Labor.** Current personnel resources within ENRD are not
sufficient to adequately staff the 104 Tribal Trust cases that have been
filed so far. Even with the additional Government staff requested, we
will minimally be able to accommodate the increased future activity in
the existing cases, as well as the demands of the prospective cases. We
will still require the specialized supplemental litigation support
services of our existing contractor staff, as described below. For the
past three years, the efforts of our attorneys have been augmented by an
indispensable, contractor-provided litigation support operation; and
this contingent has been a key contributing factor in our successes to
date.

ENRD cannot rely on the Interior or Treasury Departments to provide any
significant or additional litigation support. Over the past four years,
Interior has reimbursed ENRD for about \$1.6 million for document
processing and production tasks that ENRD has undertaken for the agency.
Interior has refused to pay in full ENRD's last request for supplemental
reimbursement, however, and it probably will deny future requests. Also,
Interior is largely consumed with the *Cobell* litigation and the
continuing management of its Indian trust duties and responsibilities.
Additionally, it is overwhelmed by the number and scope of accountings
that it is or will be obligated to provide. Moreover, Interior is
hampered by a lack of funding and resources itself, including an
insufficient number of staff attorneys assigned to the Tribal Trust
cases and the loss of Internet communication capability occasioned by
*Cobell.* As a result, Interior is and has been unable to focus
significant attention or resources on the Tribal Trust cases. The
reassignment of *Cobell* to a new judge does not alter considerably the
burdens confronting Interior from that litigation. Further, the filing
of 72 new Tribal Trust cases in December 2006, many of which are in the
Court of Federal Claims, exacerbates Interior's situation. Similarly,
Treasury has assigned a single attorney to all 104 Tribal Trust cases.
Also, Treasury relies upon ENRD for document processing and production
tasks, as well as creation and maintenance of litigation databases, for
which the agency reimburses the Division.

To compensate for these agency shortcomings, ENRD has retained an
experienced litigation support contractor to provide a team of competent
legal and technical staffers who have been and continue to be providing
invaluable support to the ENRD attorneys working on the Tribal Trust
litigation. Based on its current projections (which include massive
document acquisition, imaging, coding, management, database
administration, trial preparation, and staff support), ENRD estimates
that it will cost approximately \$2.58 million in additional funds to
maintain the litigation support contract, at an adequate level of
activity, for the duration of FY 2008.

**Document Management.** ENRD is the document manager for records
relating to all of the Tribal Trust cases. It has identified, located,
scanned, coded, managed, and produced documents to Interior, Treasury,
and, in many instances, to the Tribes. As stated previously, ENRD has
acquired and processed over 17 million pages to date. This figure
represents about ten percent (or less) of the total volume of
potentially relevant documents that has been identified to date in the
currently filed cases (over 150 million pages). ENRD foresees the
possible need to process up to or over (depending, in part, on the
ultimate number of case filings and activity thereof) 10 million pages
(approximately 2.85 million documents) before the end of FY 2008. It
estimates that these documents will cost at least \$750,000 to acquire
(i.e., image at remote locations, such as Reservations, and
electronically process) and load (in searchable network databases).

**Trial Support.** Based on the current case schedules, ENRD expects to
take at least two Tribal Trust cases to trial in FY 2008. Preparing and
taking Tribal trust cases to trial imposes additional litigation support
work requirements and financial burdens above and beyond the costs of
providing and maintaining litigation support for all of the Tribal trust
cases.

ENRD tried one Tribal Trust case in FY 2006. In *Osage* (one of three
cases brought by this Tribe and one of two in the Court of Federal
Claims), the Tribe alleged that it suffered over \$2.5 billion in
damages from the Government's mismanagement of its trust fund accounts
from 1853 to present and from improper pricing of its oil and gas
resources. The trial (the first of several expected in the same case)
involved the claims that the Government failed to collect the proper
royalty payments under four selected oil and gas leases for five
specific periods of time and that the Government failed to manage and
invest the collected funds properly. The trial lasted two weeks during
the Spring of 2006. Among other things, ENRD had to establish and staff
a full-service, network-enabled, contractor-run trial support facility
in close proximity to the courthouse in Washington, D.C. The litigation
support activities specifically geared toward supporting the *Osage*
trial cost \$250,000 over and above on-going costs for other cases. The
cost to support two trials in FY 2008 would cost ENRD a minimum of
\$500,000.

**Support Center.** ENRD established an on-site Tribal Trust Support
Center in June 2003 to provide immediate and daily access for its
attorneys, as well as Interior and Treasury components, to contractor
support personnel, storage space, database administrators, and technical
support resources. The Support Center additionally maintains and updates
network-based computer databases; provides pre-trial, evidentiary
hearing and trial support for cases; assists Treasury and Interior in
responding to and managing voluminous requests for production; assists
in coordinating and responding to the voluminous document and data
requests of the Government's numerous expert consultants; and covers the
setup and maintenance of a projected Website to provide secure access by
experts and agency program personnel (wherever possible) to ENRD's
imaged document collections and databases. The total costs to maintain
the high-speed copiers and copier supplies, computer equipment, phones,
office supplies, postage, utilities, miscellaneous equipment, labor and
other overhead is expected to total \$1,330,000 for FY 2008.

**Conclusion**

In order Number range CHAPTERto defend effectively and represent
adequately the interests of the United States and the public fisc, among
other things, in the current docket of 104 Tribal trust cases, ENRD
requests 10 attorneys, five paralegals, and two support staff, as well
as \$2.58 million in litigation support funding, over our FY 2007 base.
The Tribal Trust staffing and litigation support needs are urgent.
Without major Divisional adjustments, we cannot continue to provide
exemplary counsel to these important, high-profile, and high financial
exposure cases.

ENRD must devote sufficient resources to the handling and management of
these legally and factually complex Tribal Trust cases in order to
protect the public fisc and in order to protect the federal Government
from unnecessary embarrassment and discomfiture. The resources requested
and explained above are the minimum required to allow ENRD to provide
acceptable representation in these cases.

**Impact on Performance (Relationship of Increase to Strategic Goals)**

Successful execution of ENRD's Tribal Trust litigation responsibilities
is a critical step in achieving the Justice Department's Strategic Goal
Two: Enforce Federal Laws and Represent the Rights and Interests of the
American People, and, more specifically, Strategic Objective 2.5:
Enforce federal statutes, uphold the rule of law, and vigorously
represent the interests of the United States in all matters for which
the Department has jurisdiction. The interests of the United States in
the Tribal Trust cases can be described in both quantitative and
qualitative terms. The financial interest of the United States in these
matters is currently alleged to exceed \$220 billion, the total damages
claimed by the Tribes in the 104 currently filed cases. The
non-financial -- both immediate and indirect -- interests of the United
States and the American people concern the huge and unnecessary
potential monetary awards at taxpayer expense, extensive negative
publicity, and a general public loss of confidence in the Government and
the many Executive Branch agencies involved in the Tribal Trust
litigation (Interior, Treasury, Justice). As such, the requested budget
enhancement will benefit not only ENRD and the Justice Department, but
also numerous agencies outside of the Department.

ENRD must devote the majority of its appropriated resources to defensive
work on behalf of federal agencies. When making decisions as to which
cases merit funding, the Division must proceed, first and foremost, with
such non-delegable, non-discretionary defensive litigation. Additional
resources for this initiative will assist the Division in responding to
this increasingly onerous defensive caseload. It will also, as a result,
liberate other resources to work on matters responsive to different
aspects of Strategic Goal 2.5. For example, if ENRD is awarded
enhancements for Tribal Trust in this FY 2008 budget request, we are
less likely to divert resources from other program areas within our
Division. As such, sufficient staff will be available to affirmatively
respond to Objective 2.5 of the Attorney General's Strategic Plan, to
"enforce federal statutes, uphold the rule of law, and vigorously
represent the interests of the United States in all matters for which
the Department has jurisdiction."

For ENRD to meet the Department's goal of defending all "challenges to
federal environmental and conservation programs and activities by
representing the United States in all matters concerning the protection,
use, and development of the nation's public lands and natural resources"
-- while at the same time continuing to "enforce federal statutes,
uphold the rule of law, and vigorously represent the interests of the
United States" -- the Division needs additional staff and funding. The
personnel and litigation support requested under this Tribal Trust
initiative will provide ENRD with the resources needed to effectively
address all aspects of DOJ Strategic Objective 2.5.

# Funding

Base Funding

+-----+------+---------+-----+-----+---------+----+-----+----------+
| #   |      |         | ### |     |         | #  |     |          |
| ### |      |         | ### |     |         | ## |     |          |
| ### |      |         | # F |     |         | ## |     |          |
|  FY |      |         | Y 2 |     |         | ## |     |          |
|  20 |      |         | 007 |     |         |  F |     |          |
| 06  |      |         |  Es |     |         | Y  |     |          |
| Ava |      |         | tim |     |         | 20 |     |          |
| ila |      |         | ate |     |         | 08 |     |          |
| bil |      |         |     |     |         |  R |     |          |
| ity |      |         |     |     |         | eq |     |          |
|     |      |         |     |     |         | ue |     |          |
|     |      |         |     |     |         | st |     |          |
+-----+------+---------+-----+-----+---------+----+-----+----------+
| Pos | FTE  | Dollars | Pos | FTE | Dollars | P  | FTE | Dollars  |
|     |      | (\$000) |     |     | (\$000) | os |     | (\$000)  |
+-----+------+---------+-----+-----+---------+----+-----+----------+
| 13  | 13   | 1,199   | 13  | 13  | \$1,258 | 30 | 22  | \$2,629  |
+-----+------+---------+-----+-----+---------+----+-----+----------+

[Personnel Increase Cost Summary]{.underline}

+------------+-------------+---------+------------+------------------+
| Type of    | Modular     | Number  | FY 2008    | FY 2009 Net      |
| Position   | Cost        | of      |            |                  |
|            |             |         | Request    | Annualization    |
|            | per         | Po      |            |                  |
|            | Position    | sitions |            |                  |
|            |             |         |            |                  |
|            |             | Re      |            |                  |
|            |             | quested |            |                  |
+------------+-------------+---------+------------+------------------+
| Attorney   | \$103,528   | 10      | \          | \$800,290        |
|            |             |         | $1,035,280 |                  |
+------------+-------------+---------+------------+------------------+
| Paralegal  | \$51,426    | 5       | \$257,130  | \$317,974        |
+------------+-------------+---------+------------+------------------+
| Legal      | \$39,087    | 2       | \$78,174   | \$76,024         |
| Assistant  |             |         |            |                  |
+------------+-------------+---------+------------+------------------+
| Total      |             | 17      | \          | \$1,194,288      |
| Personnel  |             |         | $1,370,584 |                  |
+------------+-------------+---------+------------+------------------+

Non-Personnel Increase Cost Summary

  --------------- ------------- ---------- ------------- -------------------
  Item            Unit          Quantity   FY 2008       FY 2009 Net
                                           Request       Annualization

  Litigation      N/A           N/A        \$2,580,416   \$0
  Support                                                

  Total           N/A           N/A        \$2,580,416   \$0
  Non-Personnel                                          
  --------------- ------------- ---------- ------------- -------------------

Grand Total

  ------------- ------- ------- ------------- --------------- -------------------
  Item          Pos     FTE     Personnel     Non-Personnel   Total

  Expense       17      9       \$1,370,584   \$2,580,416     \$3,951,000
  Increase                                                    

  Grand Total   17      9       \$1,370,584   \$2,580,416     \$3,951,000
  ------------- ------- ------- ------------- --------------- -------------------

**C. Results of Program Assessment Rating Tool (PART)**

> During FY 2005, the Division was assessed through the Office of
> Management and Budget's (OMB) Program Assessment Rating Tool (PART)
> along with five other litigating components (Antitrust, Civil
> Division, Criminal Division, Civil Rights Division, and Tax Division),
> collectively named the General Legal Activities (GLA) Program. At the
> end of the assessment, the GLA Program received the highest rating of
> "Effective." Other findings showed that:

-   The Program effectively achieves its goal of resolving cases in
    favor of the government. Favorable resolutions, in turn, punish and
    deter violations of the law; ensure the integrity of federal laws
    and programs; and prevent the government from losing money through
    unfavorable settlements or judgments.

-   The Program collaborates effectively with its partners, notably the
    U.S. Attorneys Offices. The two programs work closely to share
    expertise, make referrals, and designate cases for prosecution,
    while minimizing any overlap of responsibilities.

-   The Program exhibits good management practices. This includes strong
    financial management, collecting and using performance information
    to make decisions, and holding managers accountable for program
    performance.

> Additionally, to exhibit continual improvement of business practices,
> the Program will perform these follow-up actions:

-   Seek regular, independent evaluations of the Program\'s
    effectiveness at resolving cases in favor of the government;

-   Establish a leadership training and mentoring program to continue
    improving the quality of the program\'s management; and

-   Work with the Department\'s Chief Information Officer to evaluate
    and purchase litigation software that will improve productivity and
    efficiency.

> The recent actions initiated in FY 2006, but not completed by year-end
> are as follows:

-   In FY 2006, the Department\'s Justice Management Division (JMD)
    offered a proposal to the Management and Planning Staff (MPS) and
    the Office of the Inspector General (OIG) to perform an independent
    evaluation of the GLA components (GLAs). The proposal recommended
    that MPS perform initial background interviews in a manner
    consistent with OIG yellow book regulations. MPS would later hand
    off their preliminary research to OIG to review and offer their
    findings and recommendations. However, OIG was unable to include the
    GLA evaluation in their FY 2007 docket, and as a result, JMD and the
    GLAs are currently exploring other options to meet the PART
    follow-up action of \"Performing an independent evaluation of the
    GLAs.\"

-   Each of the litigating components has developed a leadership
    training and/or mentoring program, or is in the process of
    developing one. Over the course of FY 2006, the litigating
    components trained 318 attorneys and 219 non-attorneys after
    conducting 9 training sessions. Additionally, 22 new employees are
    enrolled in a mentoring program.

-   The litigating components are working jointly on a project led by
    the Justice Management Division (JMD) to develop a case management
    system with the objective of providing an efficient and effective
    means to track litigations handled by the Department. Each component
    participated in the Source Selection Evaluation Board for the
    system. Vendor demos were conducted and revised proposals were
    evaluated for vendors still in the procurement process. The Board
    has completed its evaluation and recommendations were sent to the
    selecting officials.

**V. Exhibits**

**A. Organizational Chart**

![](media/image24.jpeg){width="8.282638888888888in" height="6.1875in"}

**Exhibit A**

**B.** **Summary of Requirements**

![](media/image25.wmf){width="10.415972222222223in"
height="6.215277777777778in"}

**Exhibit B**

**B.** **Summary of Requirements (Cont.)**

![](media/image26.wmf){width="10.415972222222223in"
height="3.1847222222222222in"}

**Exhibit B**

**C. Program Increases by Decision Unit**

![](media/image27.wmf){width="7.825in" height="2.3666666666666667in"}

**Exhibit C**

**D. Resources by Department of Justice Strategic Goal and Objective**

![](media/image28.wmf){width="10.364583333333334in"
height="4.293055555555555in"}

**Exhibit D**

**E. Justification for Base Adjustments**

![](media/image29.wmf){width="8.790277777777778in"
height="6.101388888888889in"}

**Exhibit E**

**F. Crosswalk of 2006 Availability**

![](media/image30.wmf){width="10.363888888888889in"
height="3.953472222222222in"}

**Exhibit F**

**G. Crosswalk of 2006 Availability**

![](media/image31.wmf){width="10.363888888888889in"
height="2.952777777777778in"}

**Exhibit G**

**H. Summary of Reimbursable Resources**

![](media/image32.wmf){width="9.949305555555556in"
height="5.978472222222222in"}

**Exhibit H**

**I. Detail of Permanent Positions by Category**

![](media/image33.wmf){width="10.365972222222222in"
height="5.509027777777778in"}

**Exhibit I**

**J. Financial Analysis of Program Increases**

![](media/image34.wmf){width="6.071527777777778in"
height="5.570138888888889in"}

**Exhibit J**

**K. Summary of Requirements by Grade**

![](media/image35.wmf){width="10.363194444444444in"
height="4.590277777777778in"}

**Exhibit K**

**L. Summary of Requirements by Object Class**

![](media/image36.wmf){width="10.372222222222222in"
height="6.180555555555555in"}

**Exhibit L**