USDA Submits to Shakedown by Hispanic and Women Farmers
Whether as heads of corporations or government agencies, white executives can be counted upon to grovel if they or their organizations stand accused of discrimination. Such especially is the case with Secretary of Agriculture Tom Vilsack, whose capacity for fecklessness in the face of his accusers is almost limitless. And not for the first time, his timidity will cost taxpayers. On Monday, September 24, Vilsack announced that Hispanic and women farmers who believe they were unjustly denied grants or credit by the U.S. Department of Agriculture (USDA) can file claims over a six-month period, effective immediately, for cash awards and/or tax relief totaling at least $1.33 billion, plus up to $160 million in debt relief. This boodle was made possible by a consolidated settlement of two class-action lawsuits, each a copycat of the Pigford "black farmers" case.
Since early 2010, National Legal and Policy Center has published a series of articles describing the details of the Pigford case, originally filed against Clinton Agriculture Secretary Dan Glickman, and explaining why it amounts to one of the egregious shakedowns ever launched in the name of "civil rights." Two black North Carolina farmers, Timothy Pigford and then Cecil Brewington, had sued the department in 1997, claiming they were denied USDA aid on account of their race. Their lawyers, being a particularly litigious sort, rounded up about 400 co-plaintiffs. They saw a class-action gold mine. Yet there was no hard evidence to support the plaintiffs' claims. Triggering the suit was a highly flawed and inconclusive USDA-commissioned consultants' report, and a subsequent effort by Glickman to combat "bias" in his department. The Pigford suit was a consequence of this. Rather than fight the groundless charges, the department chose mediation.
It would prove to be a costly error. Attorneys for the plaintiffs corralled another thousand or more allegedly aggrieved parties, all the better to create a backlog so great that the department would accede to blanket (as opposed to case-by-case) mediation. The strategy worked. Secretary Glickman, against the better judgment of the Justice Department, agreed that blanket mediation would be more appropriate. In April 1999 U.S. District Judge Paul Friedman, a Clinton appointee, approved a consent decree that allowed the plaintiffs a choice between "Track A" and "Track B" settlements. Virtually all chose Track A, making them eligible for a lump sum payment of $50,000 per family plus relief from outstanding loans and tax liability. The original complaint, it should be noted, did not cite a single instance of racial discrimination. Yet Secretary Glickman gave a guilt-ridden "admission" of rampant discrimination in his department.
As it turned out, the settlement was a giveaway of more than $1 billion. A claimant didn't even have to prove ownership of, or even employment at, a farm; any claim of being rejected for a USDA loan or grant during the years 1981-96 could qualify as having "attempted to farm." Quite a few black "farmers" turned out to be scam artists working in concert with other individuals. At least one fraudster, down in Mississippi, murdered two women over how to share the loot. Yet rather than entertain second thoughts, the plaintiffs' attorneys filed another suit on behalf of supposedly eligible black farmers who had failed to file a claim before the deadline date.
In response, Congress in 2008, as part of a farm bill, reopened the case, now christened "Pigford II," authorizing up to $100 million in civil damages for late filers. This sum eventually would be applied to a $1.25 billion February 2010 settlement. In November of that year, Congress authorized the remaining $1.15 billion, part of a larger bill that also created a $3.4 billion pool to compensate Native Americans for unrealized income from oil, gas, timber and other natural resource extraction from tribal territories (itself a product of a protracted and highly questionable class-action suit against the Department of the Interior, Cobell v. Salazar, alleging department mismanagement of Indian land trust funds over many decades). Ultimately, more than 22,000 black farmers (and "farmers") filed damage claims pursuant to the original Pigford, a figure more than ten times what had been projected. About 70 percent of the applicants would be compensated.
In addition to being a hustle itself, the original Pigford case also spawned what amounted to copycat hustles on behalf of Indians, Hispanics and women farmers. The Indian tribal lawsuit, filed in November 1999 by that dynamic litigation duo of Alexander Pires and Phil Fraas and ultimately becoming known as Keepseagle v. Vilsack, resulted in a settlement on October 19, 2010 in which the Department of Agriculture agreed to pay thousands of Indian farmers and ranchers $760 million as compensation for discrimination by the USDA in-house credit bureau, the Farm Service Agency (FSA) during 1981-99; of that sum, $680 million would go for damages and the other $80 million would go for loan forgiveness. Here, as with Pigford, there was no documentation of discrimination. Though Secretary Vilsack tacitly admitted as much, he groveled. "Today's settlement can never undo wrongs that Native Americans may have experienced in past decades," he announced, "but combined with the actions we at USDA are taking to address such wrongs, the settlement will provide some measure of relief to those alleging discrimination" (italics mine).
Sensing capitulation by the government, attorneys for the discrimination lawsuits on behalf of Hispanics and women - respectively, Garcia v. Vilsack and Love v. Vilsack - knew victory was only a matter of time. The two cases by now had been consolidated. Like those already settled, these lawsuits rested on unsupported, and frankly unsupportable, claims of discrimination. And aside from lawsuits, Secretary Vilsack was proving himself an anti-discrimination zealot.
Garcia v. Vilsack originated in 2000. Lupe Garcia, along with his father and brother, owned two farms in Dona Ana County, N.M. They had applied several times to the USDA for operating loans, each time being turned down, despite having, as they claimed, adequate cash flow, profitability and collateral. The Garcias sued, claiming the Agriculture Department was in violation of the Equal Credit Opportunity Act. Their legal eagles were the ever-familiar Alexander Pires and Phil Fraas, and later, lead attorney Stephen Hill (Howrey LLP), who in fact was assisted by Clinton-era FBI Director Louis Freeh. After extensive negotiation, the U.S. Department of Justice in April 2010 reversed the courts and granted the plaintiffs' their long-sought class-action status. That paved the way for yet more government surrender. On May 26, 2010, the DOJ proposed a settlement of up to $1.33 billion. Stephen Hill, despite lacking proof of willful discrimination, huffed that the offer was "woefully inadequate." The case remained up in the air.
The sex discrimination suit, Love v. Vilsack, also was based on spurious or exaggerated evidence. Rosemary Love, the lead plaintiff, was a Montana sheep rancher who, like many male counterparts, had come upon hard times in the early Eighties. She applied for a loan from Farm Service Agency and initially was denied. Eventually, she got a loan, but at half the requested amount, and with the stipulation that her commercial assets be liquidated. Unable to secure the necessary funds, she declared bankruptcy, though she did manage to hold onto the ranch. She also filed a sex discrimination suit against the USDA in 1987, a case that remains unresolved. Eventually, in October 2000, buoyed by the outcome in Pigford, Love, along with three out-of-state female farmers, sued the USDA for sex discrimination - a male farmer in his 70s joined the action, claiming age discrimination. Filed, predictably, by the Pires-Fraas legal team, and later taken over by Kristine Dunne of the Washington, D.C. litigation shop of Arent Fox, the suit alleged there had been "a pervasive problem at the Agriculture Department with minority or vulnerable groups generally." The plaintiffs sought $3 billion in damages - a pretty hefty chunk of change - and in 2004 filed for class-action status. They were unsuccessful in their repeated attempts. Yet in the end it mattered little, given the willingness of the defendant to cave in.
With any number of announcements over the past year or two virtually spelling out the details, the Department of Agriculture made those details official this past Monday: Hispanic and women farmers and ranchers who believe the department had discriminated against them can claim awards, effective immediately, from a pool of at least $1.33 billion in cash awards and tax relief payments, plus another $160 million in farm debt forgiveness. With a window of opportunity lasting during September 24, 2012-March 25, 2013, any person proving discrimination by race or sex could receive up to $50,000 in compensation. The time frames for alleged acts of discrimination were January 1, 1981-December 31, 1996 or October 13, 1998-October 13, 2000 (Hispanics) and January 1, 1981-December 31, 1996 or October 19, 1998-October 19, 2000 (women). Note, by the way, the difference between the original USDA settlement offer of "up to" $1.33 billion and the actual settlement of "at least" $1.33 billion. As that sum is now a floor rather than a ceiling, plaintiffs' attorneys will have vast opportunities to drive the eventual compensation sky-high.
Secretary Vilsack, like his predecessors, carefully parsed his words of surrender. The settlement, he said, marks "a new era of civil rights" at the Department of Agriculture. He added: "The opening of this claims process is part of USDA's ongoing efforts to correct the wrongs of the past and ensure fair treatment to all current and future customers." The Department of Agriculture plans to engage in an aggressive outreach through the mail, media and community advocacy groups to publicize the availability of the funds. Once again, the forces of redistribution, aided by the plaintiffs' bar, have routed their target, turning the federal treasury into an open cash register for beneficiaries of egalitarian jurisprudence.
It is unfortunate that most published accounts of these cases have examined plaintiffs' claims uncritically. For in each case, their lawyers did not prove, and indeed made no attempt to prove, systemic discrimination. But evidence, as economist-historian Thomas Sowell eloquently has argued, rarely is relevant to the civil rights vision. What matters is affirming the overarching narrative of nonwhites suffering at the hands of whites - more specifically, white males - and receiving mandated alms to facilitate the "healing" process. Group rights inevitably trump individual rights. Thus, even if an individual is unable to prove discrimination, if that person belongs to a designated oppressed group, he or she deserves special compensation anyway. Equality of group results, not freedom of contract, is the endgame. This mentality drives not just misguided lawsuits like these, but also affirmative action, corporate "diversity" training and metrics, slavery "reparations" shakedowns, and ultimately, welfare state expansion.
In the meantime, policy should be guided by the principle that no person, regardless of group affiliation, has a right to receive a loan. This principle should apply whether the lender is a government agency or a private entity such as a bank, a savings & loan association or a credit union. Lenders evaluate the feasibility of extending credit based on the risk of default under a given set of loan amounts, interest rates, and other terms and conditions. They shouldn't feel potentially hostage to a lawsuit each time they contemplate turning down someone for credit. Someone should tell the plaintiffs' bar as much.