Thin Red Line

FEW tears were shed last month when a jury ordered Nationwide Mutual Insurance Company to pay more than $100 million in damages for discriminating against black homeowners in Richmond, Virginia. Most Americans, after all, oppose bigotry and dislike insurance companies. But the Nationwide verdict signals an ominous trend: the use of anti-discrimination laws by government-funded activists to compel private industries to use racial preferences in dealing with customers.

Since the 1970s, the U.S. Department of Housing and Urban Development has lavished millions of dollars on private advocacy groups to conduct tests for unlawful discrimination. In 1995, HUD provided $1.5 million to help a Richmond-based group called Housing Opportunities Made Equal (HOME) conduct tests targeting Nationwide. Volunteers called agents and asked for quotes for homeowners’ insurance. White testers called about homes in white neighborhoods, while black testers called about homes in black neighborhoods. HOME claimed that its tests showed that homeowners in black neighborhoods received rate quotations that were “unjustifiably higher than rates quoted to persons in comparable homes in white neighborhoods.” The group sued Nationwide for violations of the Virginia Fair Housing Act and recruited none other than the current mayor of Richmond, Tim Kaine, to serve as its lead attorney. Mayor Kaine would argue HOME’S case before a focal jury of six blacks and one white.

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Robert R. Detlefsen

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FEW tears were shed last month when a jury ordered Nationwide Mutual Insurance Company to pay more than $100 million in damages for discriminating against black homeowners in Richmond, Virginia. Most Americans, after all, oppose bigotry and dislike insurance companies. But the Nationwide verdict signals an ominous trend: the use of anti-discrimination laws by government-funded activists to compel private industries to use racial preferences in dealing with customers.

Since the 1970s, the U.S. Department of Housing and Urban Development has lavished millions of dollars on private advocacy groups to conduct tests for unlawful discrimination. In 1995, HUD provided $1.5 million to help a Richmond-based group called Housing Opportunities Made Equal (HOME) conduct tests targeting Nationwide. Volunteers called agents and asked for quotes for homeowners’ insurance. White testers called about homes in white neighborhoods, while black testers called about homes in black neighborhoods. HOME claimed that its tests showed that homeowners in black neighborhoods received rate quotations that were “unjustifiably higher than rates quoted to persons in comparable homes in white neighborhoods.” The group sued Nationwide for violations of the Virginia Fair Housing Act and recruited none other than the current mayor of Richmond, Tim Kaine, to serve as its lead attorney. Mayor Kaine would argue HOME’S case before a focal jury of six blacks and one white.