Pigford: the unexamined Obama administration scandal— Part 3 of 7

Pigford: the unexamined Obama administration scandal—

Part 3 of 7

The underreported scandal referenced is generally identified as “Pigford.”  Pigford’s germination occurred in 1997 as a lawsuit (Pigford vs. Glickman) alleging that 91 African-American farmers were unfairly denied loans by the United States Department of Agriculture (USDA) due to racial discrimination which prevented the complainants from farming.  In 1999, the black farmers won their case.

U.S. Opens Spigot After Farmers Claim Discrimination: 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, 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 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. Even now people who say they were unfairly denied loans can collect up to $50,000 with little documentation.

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. 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.” 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.

The Times’s examination was based on thousands of pages of court and confidential government documents, as well as interviews with dozens of claimants, lawyers, former and current government officials and others involved in the cases over the past 14 years. Many officials spoke on the condition of anonymity, citing rules against disclosing internal government deliberations and, in a few cases, the desire not to be drawn into a racially charged controversy.

In an interview, he said the payments had been fully justified and carefully controlled. Fraud has been a “really, really small part of it,” he added, pointing out that so far, three of every 10 claims had been rejected and only three claimants had been convicted of fraud. Acting Associate Attorney General Tony West, who supervised the civil division and oversaw the handling of the cases, canceled an interview. Attorney General Eric H. Holder Jr. also declined to comment.

They also said the attorney general had broad discretion to settle litigation. “It was a priority for the administration to resolve the long-standing discrimination cases,” a senior official said, and give “farmers who believed they had been discriminated against a chance to seek redress.” Career Justice Department lawyers, who participated in that interview, declined to answer when asked if they favored the outcome of their cases, saying their advice is confidential by law. But critics, including some of the original black plaintiffs, say that is precisely what the government did when it first agreed to compensate not only those who had proof of bias, but those who had none.

source–sharon lafraniere, mike kelly, robert menendez, david aufhauser, tony west, abraham carpenter jr,

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