Politics & Policy

Pigford and Discrimination

Does rectifying discrimination mean allowing widespread fraud?

After the New York Times caught up to us and published a recent exposé of the Pigford scandal, in which thousands received potentially undeserved and fraudulent discrimination settlements from the USDA, one of the few readable liberals to bother to respond was Mother Jones’s Kevin Drum. While he deserves credit for engaging the story instead of ignoring it, the substance of his response is actually pretty weak. The “eternal” dilemma of discrimination cases, Drum argues, is whether to set the evidentiary bar too high and risk bona fide victims going uncompensated, or too low and risk widespread fraud:

Roughly speaking, it sounds like the government chose the second course, and lots of money has been paid out to people who never farmed, never applied to farm, and never had any intention of farming. But it was raining money, so they put out their hats.

It’s hard to know what to think of this. Obviously it’s hard to understand why the Agriculture Department didn’t adopt a stricter standard, one that wouldn’t have paid out thousands of fraudulent claims to people who didn’t deserve it. At the same time, it’s hard not to think of the flip side: all the valid discrimination cases that have been brought over the years, but tossed out because the evidentiary bar was too high and it was impossible to prove that discrimination actually took place. Those kinds of cases don’t get a lot of headlines, but they’re every bit as bad.

So I don’t know. You’d think there would be some kind of reasonable middle ground, but we sure do seem to have a hard time finding it. And while there’s obviously plenty to criticize about how Pigford II has been handled, I have to say that I’m sure not looking forward to the inevitable ugliness this is going to generate.

Drum here writes in wishy-washy, “on the one hand . . . ” platitudes about the generally good intentions behind this specifically bad outcome. This is both a fine, longstanding blogging tradition and completely understandable given how awkward it is for the Left to talk about Pigford now that the Gray Lady herself has reified it, transforming it from a right-wing boogieman to a respectable scandal. But in this case we don’t have to rely on measured generalities, we have an actual case with actual facts. So let’s review them and see what they tell us about evidentiary standards for discrimination cases and Pigford in particular.

Timothy Pigford and a small cohort of honest-to-goodness farmers had fought doggedly for years to get the government to acknowledge they had been discriminated against. The effort left Pigford’s family emotionally and financially frayed. But by 1997, the Clinton administration’s agriculture secretary had offered a public apology for past discrimination and the administration was ready to settle.

Trouble is, there was now blood in the water, attracting high-powered trial lawyer (and former DOJ hand) Al Pires to Pigford’s cause. Pires didn’t particularly want to settle, and took a heavy hand in mediation sessions, so much so that government lawyers formally accused him of trying to sabotage the process. The hardball worked, and Pires secured more favorable settlement terms for his clients — and himself. In 1999 a judge issued a consent decree granting class-action relief to a wide swath of black farmers who had farmed between 1983 and 1997, applied for and were denied federal loans, and filed written discrimination complaints to the USDA during that period.

If you acknowledge that the original Pigford class of about 400 plaintiffs had made a credible case that they were real victims of racial discrimination (and I do), it’s so-far-so-good up to this point. The problems really start with the resolution mechanism written into the settlement. Claimants were offered two “tracks” for collecting damages. “Track B” claimants were granted one-day “mini-trials” before court-appointed arbitrators under a fairly straightforward “preponderance” standard of evidence common in civil litigation. There was no cap on their potential awards. But because USDA records from the era of alleged discrimination were poor, making proof of discrimination elusive, the “Track A” route offered, in the words of the case’s judge, “those class members with little or no documentary evidence . . . a virtually automatic cash payment of $50,000, and forgiveness of debt owed to the USDA.”

It was “Track A” that led to a fraud bonanza of a 100,000-plus claimants. (Though, to be fair, who could have guessed unscrupulous folks would be drawn to “virtually automatic cash payment[s] of $50,000”?)

But even though the government found itself overwhelmed with claims — many of which were obviously fraudulent, and many of which were rubber-stamped anyway — in 2007 a young senator from Illinois (where about 0.0012 percent of farms are operated primarily by blacks) introduced an amendment to Congress’s annual “farm bill” that extended the filing deadline for Pigford claims by more than ten years, maintained the graft-magnet Track A route, and appropriated an additional $1.25 billion for payouts. The fellow then signed the selfsame bill when it finally reached his desk as president in 2010. Can you guess this young man’s name?

Now, as the Times report makes clear, once Pigford II was made law and its architect made president — well, all bets were off. Thus came new cases, Pigfords for other open-ended classes, such as women, Hispanics, and Native Americans.

As with any class-action suit, the parties to the original litigation made extensive efforts to determine the size of the potential group of claimants and alert them to the settlement. They used USDA resources, mail, phone, and even radio spots and advertisements in Jet and Ebony magazines. And even after all of this, both parties agreed the original Pigford class was unlikely to exceed 2,500.

To review, we went from old Tim Pigford fighting a lonely fight, to a few hundred black farmers fighting alongside him, to a class that a federal judge and Pigford’s lawyers thought would max out at 2,500, to 100,000 and change original-Track-A claimants — the overwhelming majority of which were identified as those who had merely “attempted to farm” because they couldn’t prove that they had ever so much as operated a garden hoe in anger — to hundreds and hundreds of thousands of potential claimants in other protected classes.

Surely, somewhere in this decades-long, ever-expanding fraud, we trampled over the “reasonable middle ground” Drum is looking for. Perhaps when the number of claims started to wildly exceed the expectations of both the litigants and the court, they could have taken another look at the incentives. Perhaps after many of those Track A claims proved obviously fraudulent, they could have opted not to extend the filing deadline by ten years, or to do so only for Track B claimants. Perhaps when it came time to consider manufactured class-action cases for other groups, the government could have tried its luck in court, or at least insisted on better fraud safeguards when it inexplicably decided to roll over and settle. Or perhaps the president could have limited awards to the amount appropriated by Congress, instead of expanding the kitty by dubiously dipping into a DOJ fund meant for a different kind of case. All — any — of these things might have stopped or at least slowed the scam.

And the fact that none of them happened makes it tough to buy this clusterfrack as the result of good intentions gone awry, as Drum’s shoulder-shrugging, “whaddayagonnado” response implies.

As for Drum’s worry that setting the evidentiary bar too high sees true victims go uncompensated? Well, many in Timothy Pigford’s original cohort, who had been fighting the USDA long before the trial lawyers came around, were pressured by those lawyers to take the Track A route, since it was easier (and yielded virtually guaranteed fees for little legal labor). Many did just that, even in cases where $50,000 was well below the actual financial damage caused by discriminatory treatment. For these farmers the settlement was a band-aid, and many — including Tim Pigford himself — have since left farming all together.

But then, Pigford isn’t really about black farmers, or even about discrimination. It hasn’t been for quite some time.

— Daniel Foster is news editor of NRO.


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