The NY Times takes a long, very critical look at Pigford v. Glickman and its aftermath:
Federal Spigot Flows as Farmers Claim Discrimination
By
SHARON LaFRANIERE
In the winter of 2010, after a decade of defending the government
against bias claims by Hispanic and female farmers, Justice Department
lawyers seemed to have victory within their grasp.
Ever since the Clinton administration agreed in 1999 to make $50,000
payments to thousands of black farmers [Pigford v. Glickman], the Hispanics and women had been
clamoring in courtrooms and in Congress for the same deal. They argued,
as the African-Americans had, that biased federal loan officers had
systematically thwarted their attempts to borrow money to farm.
But a succession of courts — and finally the Supreme Court — had
rebuffed their pleas. Instead of an army of potential claimants, the
government faced just 91 plaintiffs. Those cases, the government lawyers
figured, could be dispatched at limited cost.
They were wrong.
On the heels of the Supreme Court’s ruling, interviews and records show,
the Obama administration’s political appointees at the Justice and
Agriculture Departments engineered a stunning turnabout: they committed
$1.33 billion to compensate not just the 91 plaintiffs but thousands of
Hispanic and female farmers who had never claimed bias in court.
The deal, several current and former government officials said, was
fashioned in White House meetings despite the vehement objections —
until now undisclosed — of career lawyers and agency officials who had
argued that there was no credible evidence of widespread discrimination.
What is more, some protested, the template for the deal — the $50,000
payouts to black farmers — had proved a magnet for fraud.
Fraud? Is that what the Times is going to investigate? My bad - I assumed they were going to explain to us why there is not a class action suit for gay farmers.
But fraud it is. Here are some of the juicy bits:
The compensation effort sprang from a desire to redress what the
government and a federal judge agreed was a painful legacy of bias
against African-Americans by the Agriculture Department. But an
examination by The New York Times shows that it became a runaway train,
driven by racial politics, pressure from influential members of Congress
and law firms that stand to gain more than $130 million in fees. In the
past five years, it has grown to encompass a second group of
African-Americans as well as Hispanic, female and Native American
farmers. In all, more than 90,000 people have filed claims. The total
cost could top $4.4 billion.
From the start, the claims process prompted allegations of widespread
fraud and criticism that its very design encouraged people to lie:
because relatively few records remained to verify accusations, claimants
were not required to present documentary evidence that they had been
unfairly treated or had even tried to farm. Agriculture Department
reviewers found reams of suspicious claims, from nursery-school-age
children and pockets of urban dwellers, sometimes in the same
handwriting with nearly identical accounts of discrimination.
Yet those concerns were played down as the compensation effort grew.
Though the government has started requiring more evidence to support
some claims, even now people who say they were unfairly denied loans can
collect up to $50,000 with little documentation.
As a senator, Barack Obama
supported expanding compensation for black farmers, and then as
president he pressed for $1.15 billion to pay those new claims. Other
groups quickly escalated their demands for similar treatment. In a
letter to the White House in September 2009, Senator Robert Menendez of
New Jersey, a leading Hispanic Democrat, threatened to mount a campaign
“outside the Beltway” if Hispanic farmers were not compensated.
The circumstances under which the Agriculture Dept. accessed the settlement funds is legally dubious:
The payouts pitted Mr. Vilsack and other political appointees against
career lawyers and agency officials, who argued that the legal risks did
not justify the costs.
Beyond that, they said it was legally questionable to sidestep Congress
and compensate the Hispanic and female farmers out of a special Treasury
Department account, known as the Judgment Fund. The fund is restricted
to payments of court-approved judgments and settlements, as well as to
out-of-court settlements in cases where the government faces imminent
litigation that it could lose. Some officials argued that tapping the
fund for the farmers set a bad precedent, since most had arguably never
contemplated suing and might not have won if they had.
“The fund is not politically accessible, it is only legally accessible,”
said David Aufhauser, the Treasury Department’s general counsel from
2001 to 2003. “Otherwise, it is a license to raid the till.”
In other words, you can't pay off special interest groups just because you hope to lose to them in court; there has to be a credible legal basis for the admission of defeat.
A 2010 settlement with Native Americans was contentious for its own
reasons. Justice Department lawyers argued that the $760 million
agreement far outstripped the potential cost of a defeat in court.
Agriculture officials said not that many farmers would file claims.
That prediction proved prophetic. Only $300 million in claims were
filed, leaving nearly $400 million in the control of plaintiffs’ lawyers
to be distributed among a handful of nonprofit organizations serving
Native American farmers. Two and a half years later, the groups have yet
to be chosen. It is unclear how many even exist.
What is not unclear is for whom they will vote. And the lawyers will keep ther fee (less their contributions to the Democratic Party).
The first Pigford settlement was approved under Bill Clinton, with very lax standards of documentation and proof. This created a learning opportunity for Team Clinton:
John C. Coffee Jr., a Columbia Law School professor and specialist in
complex litigation, said that not requiring documentary evidence “was
quite unusual, but there were also special circumstances.”
Still, he said, “I don’t think they realized how much of an incentive
they were creating for claims to multiply. It is a little bit like
putting out milk for a kitten.
“The next night, you get 15 kittens.”
Who could have guessed?
Delton Wright, a Pine Bluff justice of the peace, recalled what happened
after word of the settlement reached his impoverished region: “It just
went wild. Some people took the money who didn’t even have a garden in
the ground.” He added, “They didn’t make it hard at all, and that’s why
people jumped on it.”
Mr. Wright, whose family owns farmland outside Pine Bluff, won his
claim. So did two other applicants whose claims were virtually identical
to his, with the same rounded handwriting, the same accusations of bias
and similar descriptions of damages suffered.
Now 57, with his memory weakened by what he said was a recent stroke,
Mr. Wright said he could not recall details of the discrimination he
encountered, much less explain the apparent duplicate claims.
But Mr. Cross, the Pine Bluff lawyer, has his suspicions. “It got out of
control,” said Mr. Cross, adding that he had filed about 1,500 claims,
including Mr. Wright’s and the apparent duplicates. He estimated that up
to 15 percent of Arkansas claims were fraudulent.
Claimants described how, at packed meetings, lawyers’ aides would fill
out forms for them on the spot, sometimes supplying answers “to keep the
line moving,” as one put it.
Even his own staff was complicit, Mr. Cross said; he discovered that
four employees had been slipping unverified claims into stacks of papers
that he signed. He did not inform the court monitor, he said, because
“the damage was done.”
On two floors of the Cotton Annex building in Washington, a 300-member
team from the Farm Service Agency reviewed claims before adjudicators
rendered their final decisions. In recent interviews, 15 current and
former Agriculture Department employees who reviewed or responded to
claims said the loose conditions for payment had opened the floodgates
to fraud.
“It was the craziest thing I have ever seen,” one former high-ranking
department official said. “We had applications for kids who were 4 or 5
years old. We had cases where every single member of the family
applied.” The official added, “You couldn’t have designed it worse if
you had tried.”
Carl K. Bond, a former Agriculture Department farm loan manager in North
Carolina, reviewed thousands of claims over six years.
“I probably could have got paid,” said Mr. Bond, who is black.
“You knew it was wrong, but what could you do? Who is going to listen to
you?”
Accusations of unfair treatment could be checked against department
files if claimants had previously received loans. But four-fifths of
successful claimants had never done so. For them, “there was no way to
refute what they said,” said Sandy Grammer, a former program analyst
from Indiana who reviewed claims for three years. “Basically, it was a
rip-off of the American taxpayers.”
...
Thirty percent of all payments, totaling $290 million, went to
predominantly urban counties — a phenomenon that supporters of the
settlement say reflects black farmers’ migration during the 15 years
covered by the lawsuit. Only 11 percent, or $107 million, went to what
the Agriculture Department classifies as “completely rural” counties.
The first round of fraud was so successful that there was enormous pressure to continue it:
Some 66,000 claims poured in after the 1999 deadline. Noting that the
government had given “extensive” notice, Judge Friedman ruled the door
closed to late filers. “That is simply how class actions work,” he
wrote.
But it was not how politics worked. The next nine years brought a
concerted effort to allow the late filers to seek awards. Career
Agriculture Department officials warned that they might be even more
problematic than initial claimants: in one ZIP code in Columbus, Ohio,
nearly everyone in two adjoining apartment buildings had filed,
according to the former high-ranking agency official.
President George W. Bush was unreceptive to farmers’ repeated protests.
But Congress was not: legislators from both parties, including Mr. Obama
as a senator in 2007, sponsored bills to grant the late filers relief.
Mr. Boyd said Mr. Obama’s support led him to throw the backing of his
109,000-member black farmers’ association behind the Obama presidential
primary campaign. Hilary Shelton, the N.A.A.C.P.’s chief lobbyist, said
Mr. Obama’s stance helped establish him as a defender of the concerns of
rural African-American communities.
And where were the critics?
Public criticism came primarily from conservative news outlets like
Breitbart.com and from Congressional conservatives like Representative
Steve King, Republican of Iowa, who described the program as rife with
fraud. Few Republicans or Democrats supported him. Asked why, Mr. King
said, “Never underestimate the fear of being called a racist.”
Lee Stranahan is a self-described liberal who writes at the Huffington Post, but he did some pieces for Breitbart on Pigford. His thoughts on the racist label as applied to Steve King are here.
For fairness and balance, let's note this cheerleading from the NY Times editors back in 2010:
Pay Up
Pigford v. Glickman has not resonated across the land like Brown v.
Board of Education, but the very same history of crippling injustice is
at its heart. The Pigford settlement will remain a misnomer until the
nation rights this historic injustice and pays what it owes.
But Pigford is a mere prelude to the current drama. If blacks can benefit from a Federal give-away, why can't Hispanics? Why can't women? Good question:
In agreeing to the payout, the government did, for the first time,
impose a greater evidentiary burden. While one major category of
claimants — those who said their loan applications had been unfairly
denied — remained eligible for payments of up to $50,000 without any
documentation, others were required to produce written evidence that
they had complained of bias at the time. The Hispanic plaintiffs were
indignant.
Adam P. Feinberg, who represents some of them, said: “Once the
government puts a program in place for one racial group, even if it
decides it is too generous, it cannot adopt a different set of
restrictions for another racial group. It’s outrageous.”
Well, yes. Equal opportunity for fraud is what makes Obama's Chicago-style government great.
The Times closes with an example of the "cottage industry" that has grown up to participate in the rip-off:
Mr. Burrell has traveled the South for years, exhorting black audiences
in auditoriums and church halls to file discrimination complaints with
his organization’s help, in exchange for a $100 annual membership fee.
In an interview last month, Mr. Burrell said he had dedicated his life
to helping black farmers after biased federal loan officers deprived him
of his land and ruined his credit. He said his organization had misled
no one, and had forwarded the names of all those eligible and willing to
file claims.
“I have never advocated anybody file a false claim,” he said. “I have worked almost pro bono for this cause.”
On a recent Thursday at the Greater Second Baptist Church in Little
Rock, several hundred African-Americans listened intently as Mr. Burrell
told them they could reap $50,000 each, merely by claiming bias. He
left out the fact that black men are no longer eligible, and that black
women are eligible only if they suffered gender, not racial, bias.
“The Department of Agriculture admitted that it discriminated against
every black person who walked into their offices,” he told the crowd.
“They said we discriminated against them, but we didn’t keep a record.
Hello? You don’t have to prove it.”
In fact, he boasted, he and his four siblings had all collected awards,
and his sister had acquired another $50,000 on behalf of their dead
father.
She cinched the claim, he said to a ripple of laughter, by asserting
that her father had whispered on his deathbed, “I was discriminated
against by U.S.D.A.”
“The judge has said since you all look alike, whichever one says he came
into the office, that’s the one to pay — hint, hint,” he said. “There
is no limit to the amount of money, and there is no limit to the amount
of folks who can file.”
He closed with a rousing exhortation: “Let’s get the judge to go to work
writing them checks! They have just opened the bank vault.”
I have only one guess as to why the Times is investigating this now. In happier days, particularly the era of the Clinton surpluses when the first deal was announced, this sort of fraud seemed to victimize no one.The taxpayer? Who is that, Mitt Romney, and aren't his taxes too low anyway?
But in this age of austerity, it may have ocurred to Timesmen that money that goes to faux-farmers won't be funding Alzheimer's research or AIDS relief or pre-school education in the inner city. As choices go, Obama's choice to sprinkle these checks on those special interest group this way is hard to defend.
As to whether Team Obama can gain more votes through good government or by handing random checks to opportunists based on some mixture of ethnicity, gender and scruples, well, that depends in part on whether our watchdog press actually barks. It looks as if they might.
UPDATE: Ed at Hot Air achieves brevity:
NYT: Breitbart was right about Pigford
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