New York Times: Obama Administration promoted huge fraud on taxpayers in Pigford case

New York Times: Obama Administration promoted huge fraud on taxpayers in Pigford case

obama-shh-300x225The New York Times yesterday described how the Obama Administration, despite opposition from career civil servants, radically expanded a legal settlement that had already become a “magnet for fraud,” paying out vast sums of money over baseless claims of discrimination at the Agriculture Department in the Pigford case.

As legal commentator Walter Olson noted, the story contained “vital new details about how career government lawyers opposed Obama appointees’ insistence on reaching a gigantic settlement for claims of bias against female and Hispanic farmers in the operation of federal agriculture programs” over the objections of “career government lawyers.”

As the Times reported,

On the heels of the Supreme Court’s ruling [adverse to claimants and favorable toward USDA], 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.

The mushrooming settlement 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.”

Even under the Clinton administration, before the settlement’s expansion under Obama, it had already showered money on many obviously undeserving people, even though back then it covered fewer potential recipients (it covered only black farmers back then, not women or Hispanics). As a Pajamas Media writer earlier asked, “If there are only 39,697 African-American farmers grand total in the entire country, then how can over 86,000 of them claim discrimination at the hands of the USDA? Where did the other 46,303 come from?” Yet 86,000 black farmer claimants had come forward to obtain payouts.

Daniel Foster, who previously wrote about Obama administration abuses in the Pigford case, discusses five disturbing things to be learned from the news article. Earlier, Peter Schweizer and Lee Stranahan at Big Government wrote more about the dubious Pigford farmer settlement (see here, here, and here; FBI said to be interested; claimants’ own lawyer says they often got away with faulty claims).

The Obama Administration repeatedly loosened the requirements for payouts in the Pigford class-action lawsuit against the government, in order to make such payouts possible. Essentially, the Obama administration used the case to award race-based reparations to people who never farmed or even intended to farm. The government’s collusion with the plaintiffs’ lawyers in this case will ultimately cost taxpayers billions.

The Obama Administration has frequently ripped off taxpayers to pay out settlements in legally-baseless lawsuits. It keeps paying off people, and trial lawyers, who sue the government under a disparate-impact theory rejected by the Supreme Court. It agreed to pay $62 million to settle a lawsuit that it could easily have won, in which the plaintiffs alleged that race-neutral government criteria for paying out housing assistance to Hurricane Katrina victims ended up benefiting blacks less on average than whites. “The formula for the federally funded Louisiana program awarded rebuilding grants up to $150,00 based on a home’s pre-storm value, rather than the cost of rebuilding from the storm damage. The suit argued that those rules hurt black homeowners, whose properties typically had lower values than whites.”

It did so in that case even though a federal appeals court had already denied the plaintiffs’ request for an injunction against the government, noting that they had little if any chance of succeeding in their lawsuit, in Greater New Orleans Fair Housing Action Center v. U.S. Department of Housing and Urban Development (2011).

The federal appeals court’s decision was effectively mandated by the Supreme Court’s earlier decision in Alexander v. Sandoval (2001). That case ruled that outside the employment context, people bringing discrimination lawsuits under the civil-rights laws generally have to show intentional discrimination — not unintentional “disparate impact.” (Disparate impact is when a colorblind selection criterion impacts one racial group more than another — like when blacks and whites take the same test, but don’t pass it in equal rates.)

But the Obama Administration doesn’t agree with that line of Supreme Court decisions, and it is ignoring them, in order to keep paying off people who sue the government under a disparate-impact theory — thus adding to the government’s indebtedness at a time when the federal government has already run up a national debt of $16 trillion.


Hans Bader

Hans Bader

Hans Bader practices law in Washington, D.C. After studying economics and history at the University of Virginia and law at Harvard, he practiced civil-rights, international-trade, and constitutional law. Hans also writes for CNS News and has appeared on C-SPAN’s “Washington Journal.”

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