Lawyers, 'Black Farmers' Shake Down Taxpayers National Legal and Policy Center

Lawyers, 'Black Farmers' Shake Down Taxpayers National Legal and Policy Center

Blacks account for about 1.5 percent of all farm operators in this country - and apparently a lot higher share of the civil rights lawsuits against the U.S. Department of Agriculture (USDA). On February 18, lawyers for the USDA and thousands of black farmers reached a $1.25 billion class-action agreement resolving, for now, claims that the department had engaged in willful racial discrimination in managing its loan and other aid programs. Think you've seen this headline before? You have. Back in 1999, black farmers, armed with similar claims of racial bias, snagged a federal guarantee of $50,000 per plaintiff plus loan forgiveness and tax liability offsets.

These two cases - and other pending ones - speak volumes about how "civil rights" has become little more than a pretext upon which to shake down employers and taxpayers under the guise of social justice. It also reveals more than a little about the insatiability of the plaintiff's bar and the timidity of the federal government in the face of charges of racial discrimination.

The latest out-of-court settlement is contingent upon a likely appropriation of $1.15 billion on top of $100 million Congress set aside in May 2008 as part of a larger farm bill. Prominent members of the Congressional Black Caucus are making sure colleagues feel the heat. "This settlement is a case where justice delayed will no longer be justice denied," declared House Majority Whip James Clyburn, D-S.C. "History has taught us to never give up when fighting for what is right. What happened to these farmers was wrong, and we now have the opportunity to make it right."

But exactly what did happen? The more one examines the evidence, the more the conclusion emerges: This has been a shaky if not fraudulent case from the very start. It's fitting irony that the Agriculture Department has brought many of its woes on itself. Here, then, is some background.

Back in 1994 the Department of Agriculture commissioned the Atlanta-based consulting firm of D. J. Miller & Associates to analyze its patterns of treatment of minorities and women. These were the Clinton years, and the entire executive branch was feeling extra pressure to root out discrimination. The Miller report concluded that minorities were underrepresented in USDA program participation and were getting less than their fair share of crop payments, disaster payments and Commodity Credit Corporation loans. The researchers could not determine the reasons for disparities due to "gross deficiencies" in data collection and analysis.

Secretary of Agriculture Dan Glickman was among those alarmed. Spurred by a small but aggressive group of black farmers demonstrating in front of the White House (and President Clinton's demand to do something about them), in December 1996 he ordered a suspension of all government farm foreclosures pending the outcome of a full probe of discrimination by his department. He also conducted a multi-city "listening tour" whose entourage included a Civil Rights Action Team and almost a dozen government officials. Glickman appointed an in-house civil rights task force whose report, released some two months later, recommended more than 90 steps to combat bias.

As an accusation of racial discrimination in today's political climate all too often suffices as proof of it, a lawsuit was almost inevitable. Soon enough, the hour found its man: Timothy Pigford, a black farmer from North Carolina. In August 1997, Pigford, who later was joined by another North Carolina black farmer, Cecil Brewington, filed a class-action suit in U.S. District Court for the District of Columbia. Some 400 black co-plaintiffs accused the Department of Agriculture of discrimination during 1983-97. The USDA, rather than refute the charges, agreed to mediation and a potential settlement.

Like predators smelling prey, a gaggle of litigators appeared to represent the plaintiffs. Naturally, they upped the ante, requesting blanket (rather than individual) mediation for all farmers who may have been victimized by discrimination. They also managed to raise the total of aggrieved parties to 2,000. Attorneys for the Justice Department vigorously opposed the blanket mediation, arguing each case should be investigated separately. But as the case progressed, it was clear the USDA would be unable to resolve the huge backlog of complaints - surely a self-fulfilling prophecy on the part of the plaintiffs' attorneys.

The court proved willing to break the logjam on behalf of the plaintiffs. In March 1998, U.S. District Judge Paul Friedman, a Clinton appointee, lifted a stay and set a trial date of February 1, 1999. In October 1998, Judge Friedman certified as a class all black farmers who had filed discrimination suits against the USDA from January 1, 1983 to February 21, 1997. But a complication arose. The two-year statute of limitations contained in the Equal Credit Opportunity Act, the basis for the suit, would invalidate most complaints. Not to worry. Congress, led by the Congressional Black Caucus, inserted a provision into the Fiscal Year 1999 omnibus spending act waiving the statute on all civil rights complaints against the USDA during 1981-96. That such legislation, brazen in its transparency of motive, likely violated the constitutional ban on ex post facto laws was of minor concern to lawmakers. The USDA decided to settle rather than expose itself to bad publicity. The stage was set for a big payday for Timothy Pigford and his co-plaintiffs.

Payday came on April 14, 1999. The court approved a consent decree for a revised settlement of all claims. The agreement called for a two-track settlement: "Track A" and "Track B." Track A plaintiffs would be eligible to receive $50,000 plus relief from outstanding loans and tax liability, provided they demonstrated "substantial" evidence of USDA discrimination. Track B plaintiffs would be eligible for far larger payments so long as they met the higher "preponderance of the evidence" bar of proof. More than 99 percent opted for Track A. The money wasn't as good, but it was a lot easier. And there was plenty of it to go around. The filing deadline was October 12, 1999, extended to September 15, 2000 for exceptional cases.

How many people and how much money are we talking about? As of March 2, 2010, federally-appointed contract adjudicators had ruled on 22,549 Track A applications, approving 69 percent of them (www.pigfordmonitor.org/stats). Total relief in Pigford v. Vilsack and Brewington v. Vilsack (the nominal defendant being current Agriculture Secretary Tom Vilsack) stood at a little over $1 billion. The $50,000 lump sum payouts accounted for about three-fourths.

There is good reason why so few plaintiffs have opted for Track B relief: They would have to produce hard evidence of discrimination. And the evidence was skimpy at best. Understand that the original complaint cited no specific cases of discrimination other than a reckless (and guilt-ridden) statement by Secretary Glickman that discrimination was rampant in his department. Pursuant to his Civil Rights Action Team's recommendations, Glickman ordered an immediate review of 956 backlogged discrimination complaints. The review found that in only five of these cases - less than 1 percent - was there evidence of even possible discrimination, a finding the department conveniently suppressed. Yet even though the USDA admitted no wrongdoing at its April 1999 settlement, as part of the agreement it had to spend nearly $500,000 in various media outlets advertising the availability of cash awards. Those outlets included Black Entertainment Television, TV Guide, Jet magazine, 27 general circulation newspapers and 115 black-owned newspapers. The word was out: Come and get it!

Appallingly, that wasn't the half of it. A claimant did not have to prove ownership of or even employment at a farm; any claim of being turned down for a loan, whether or not substantiated, could qualify as having "attempted to farm." That the Agriculture Department kept unsuccessful loan applications on file for only three years was an open invitation to fraud. Black "farmers" claiming acts of discrimination occurring prior to 1994 held the upper hand.

Indeed, many likely hadn't ever stepped on a farm. A review by an Oregon contractor, Poorman-Douglas, revealed that some claimants tried to certify young children as aggrieved parties. Husband-wife couples applied separately in hopes of double compensation for the same act. And a number of deceased persons "claimed" their reward, with surviving family and relatives filing on their behalf.

Timothy Pigford, one might add, was less than ideally suited as a lead plaintiff. As it turned out, he had filed an earlier suit against the USDA, only to have the action dismissed "with prejudice." That means he was prohibited from filing a subsequent suit making the same claims. On that basis alone, the Agriculture Department could have had the case thrown out. So why didn't it? Given today's political climate, the answer is pretty obvious. The department, like any status-conscious organization, lives in dread of being publicly tarred as "racist." Dropping the case would have triggered a storm of moral opprobrium, especially from the National Black Farmers Association, which has been vocal since the case began. "There's a huge trust factor that has been broken," said association President John Boyd Jr. recently. "The $50,000 will not put a farmer who has lost his farm back on his land, but it will help them have some comfort in their final years."

Such statements reek of moral entitlement. And they go a long way in explaining why the 1999 consent decree proved to be the opening phase. Now Pigford II, as it is known, is upon us. Due to supposed technicalities, numerous black farmers, mostly in the South, were unable to file a complaint on time a decade ago. To address this problem, Congress nearly two years ago reopened the case, authorizing up to $100 million in damages. Take heart: The tab could have been a lot higher. In 2004, a group calling itself the Black Farmers and Agriculturalists Association filed a $20.5 billion class-action discrimination suit against the USDA. The court dismissed the case when the group failed to show it had legal standing.

As could have been predicted, other aggrieved classes of "farmers," inspired by the original Pigford settlement, have brought forward civil suits of their own. In 2000, a group of Hispanic farmers (Garcia v. Vilsack) went to federal court to get their piece of the pie. The lead plaintiff, Lupe Garcia, a spokesperson for Justice for Hispanic Farmers, last year stated, "Tim Pigford knows exactly how much we have suffered from USDA's decades of discrimination - because the same thing happened to him and his fellow African-American plaintiffs." That same year, a group of women likewise filed suit in Love v. Vilsack. The plaintiffs are demanding compensation for USDA loan denials to women who farmed or "attempted to farm" during January 1, 1981-December 31, 1996 and during October 19, 1998-present. And the year before, in 1999, a group of American Indian farmers and ranchers had filed their own suit against the USDA, demanding $1 million in damages for each claimant. In a prepared statement this past February, the lead plaintiffs in the case, Keepseagle v. Vilsack, affirmed their position: "We applaud the president's (Obama's) decision to compensate black farmers and ranchers for the decades of wrongful discrimination committed by the USDA and his goal of putting that shameful era behind us. As our nation's first farmers and ranchers, Native Americans have also suffered from the USDA's history of discrimination, and we too should be made whole."

Success in Pigford II inevitably will serve as a catalyst for plaintiff victories in these other cases. And eligible beneficiaries are growing exponentially. Thanks to plaintiffs' litigators and Judge Friedman, about 80,000 black farmers are now eligible for compensation. That's a remarkable feat of recruitment given that the 2007 U.S. Census of Agriculture counted only 32,938 black-owned farms in all of the U.S.

It's not likely anyone in the current administration will resist the bullying. To the contrary, they are joining it. Secretary of Agriculture Tom Vilsack, the nominal defendant in the active cases, is determined to pressure Congress into appropriating the extra $1.15 billion presumably needed to satisfy the black plaintiffs. "I'm going to focus all my time and resources on making that happen," he told reporters following this February's settlement. "The president is prepared to indicate that it's a priority not just for his administration but for the country." Attorney General Eric Holder endorses this view. "The plaintiffs can move forward and have their claims heard - with the federal government standing not as an adversary, but as a partner," he said in a prepared statement. And President Obama lauded the action as "bringing these long-ignored claims of African-American farmers to a rightful conclusion." The plaintiffs will win, too, unless enough members of Congress can muster the courage to denounce this case for the fraud that it is.

The late Eric Hoffer wrote many years ago in The True Believer: "Every great cause begins as a movement, becomes a business, and eventually degenerates into a racket." By that yardstick, civil-rights activism has been a racket for decades. And it isn't simply government that's been knuckling under to the racketeers. It's hard to imagine a single white CEO today willing to fight accusations of racial bias directed at his company. More likely, he would celebrate the possibility of a "historic agreement" and announce his corporation's renewed commitment to "diversity."

Timothy Pigford recently wrote Agriculture Secretary Vilsack: "You, sir, are in a unique position to end once and for all USDA's all-too-well deserved reputation as ‘the last plantation' and to bring long-overdue accountability and transparency to the USDA-administered farm credit and non-credit farm benefit programs." Civil-rights activists see in such words a cry for justice. A more accurate description would be a shakedown.