A Bush administration official held in contempt of court over management of a trust fund for American Indian royalties will retire at the end of the year.

During his 17 months as the Interior Department's assistant secretary for Indian affairs, Neal A. McCaleb focused on untangling a fund that has been mismanaged for more than a century. It manages $500 million a year in oil, gas, mining and timber royalties from Indian lands.

"The constraints imposed by ever-present litigation have taken their toll,'' McCaleb said in a statement Thursday. "Unfortunately, the litigation has taken first priority in too many activities, thus distracting attention from the other important goals that could provide more long-term funding for Indian Country.''

In September, McCaleb and Interior Secretary Gale Norton were held in contempt of court by U.S. District Judge Royce Lamberth for failing to comply with his order fix the trust fund and concealing their failure to do so. The government plans to appeal the ruling.

McCaleb, 67, sought to change to fund management, but met resistance from Indian leaders. Negotiations bogged down and then broke off.

A 1996 lawsuit by a group of American Indians claimed the government squandered between $10 billion and $40 billion from the fund, set up in 1887 when Congress assigned American Indians small parcels of land and directed the Interior Department to manage the royalties.

Lamberth ordered the Interior Department to fix the management problems and to piece together an accounting of what the Indians are owed.