A little over two years ago I did a long story on the Pigford case for the magazine, a story about how a small class-action suit with at least the vague odor of merit morphed into a sprawling con aimed at processing identity politics into cold hard cash. The case was an obsession of the late Andrew Breitbart’s – half of the few conversations I had with him were about Pigford – but besides Breitbart’s loyal followers and my handful of readers, nobody much cared.
Even though at the end of my piece I warned that the con was a going concern, with the potential to get much bigger:
At a December 8 signing ceremony, President Obama heralded Pigford II as the close of “a long and unfortunate chapter in our history.” In a way, one hopes the president is right — that the credulity, or perhaps the shame, of the American government and its taxpayers cannot be strained to accommodate the petty greed of more than 94,000 phantom farmers, and that the con will finally have run its course. But that is unlikely. Two Pigford-style class-action suits — one for Hispanic farmers, another for women — with the potential to dwarf current settlements are working their way through the courts. Like so many Pigfords to the trough.
To their credit, the New York Times has finally caught on that this is sort of a big deal, and today ran a long, scathing, above-the-fold-piece on these Sons of Pigford.
Here’s five things I learned from it:
1) The settlements are being driven by the Obama administation and its political appointees, above the objections of career lawyers in the Justice Department:
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 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.
2) The administration sidestepped Congress and the courts, inappropriately tapping an ominously entitled Justice Department slush fund to pay claimants:
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.”
3) As in the original Pigford settlements, the government has literally given plaintiffs and their lawyers more money than they know what to do with. In the case of a $760 million settlement with Native Americans, which career DOJ lawyers argued was more than the government would have to pay even if they lost in court, only $300 million worth of (ridiculously easy to fake) claims were actually filed, leaving the rest of the money to be distributed to “nonprofit organizations serving Native American farmers.” As the story points out, it is not even clear how many such organizations exist — though you can bet any enterprising NGOers reading this are at this very moment pulling a clean copy of the 501(c)(3) application from their files.
4) Obama administration officials aren’t keen to talk about any of this. The Associate AG who oversaw the cases canceled an interview with the Times, and Eric Holder declined to comment. “Anonymous officials” were offered, but were hardly helpful. On the question of the source of the funding, for instance, one “senior Justice Department official” offers this knockdown argument: “Questions were certainly raised about whether this was something you could use the Judgment Fund to pay for,” a senior White House official said. “They considered the relevant legal standards and concluded it was.” Trust us!
5) In my piece I reported a bit on how Pigford created a cottage industry of trial lawyers and hucksters who canvassed rural, black America to drum up fresh fraudulent claimants — and thus fresh legal fees. Amazingly, even though the black male farmers to whom the original settlement applied are no longer eligible for awards, that industry continues to thrive on naked exhortations to defraud American taxpayers:
On a recent Thursday at the Greater Second Baptist Church in Little Rock, several hundred African-Americans listened intently as [Thomas Burrell, president of the Black Farmers and Agriculturalist Association] 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.”