Native American Farmers Shake The Public Money Tree

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Carl Horowitz

Native American Farmers Shake the Public Money Tree

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Sign-Up Timothy Pigford’s gift keeps on giving. Taxpayers, unfortunately, aren’t likely to be in such a giving mood. The U.S. Department of Agriculture (USDA) last month announced a $760 million settlement of a civil suit in which American Indian farmers and ranchers claimed discrimination at the hands of USDA program administrators. The agreement follows similar out-of-court settlements this year with black and Hispanic plaintiff-farmers.



The case at hand is Keepseagle v. Vilsack. Brought forth over a decade ago by nearly 900 Native American farmers and ranchers – the number would expand – the suit claimed that USDA during 1981-99 denied credit to Indians based on their ancestry. As a result, the plaintiffs alleged, they could not pay off debts and subsequently lost part or all of their land.



The nominal defendant, Agriculture Secretary Tom Vilsack, true to form, was contrite without getting specific: “Today’s settlement can never undo wrongs that Native Americans may have experienced in past decades, 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. The Obama administration is committed to closing the chapter on an unfortunate civil rights history at USDA and working to ensure our customers and employees are treated justly and equally.” President Obama likewise called the resolution “an important step forward in remedying USDA’s unfortunate civil rights history.” With people like that in charge, capitulation was only a matter of time.



Unfortunately, this lawsuit, like those filed against the USDA filed by black, Hispanic and female farmers, merits far less sympathy than headlines would suggest. For it rests on an implicit assumption that a mere claim of discrimination suffices as proof. The plaintiffs, here as elsewhere, introduced no hard evidence that they, a particular class of persons, had been singled out for denial of farm loans.



But evidence was less important than sustaining a grand narrative of social oppression and the need for enforced “healing.” Apparently, being a member of a racial/ethnic minority is in itself a moral and hence legal entitlement. This is an extension of the view that low rates of residential mortgage approval must be due to lender prejudice, not borrower creditworthiness. One can see all too well where that assumption has gotten us.



Earlier this year I noted in these pages how the original “black farmer” lawsuit from 1997, known as Pigford v. Glickman (the nominal defendant being then-USDA Secretary Dan Glickman), was based on unsubstantiated and often fraudulent claims of discrimination. The lead plaintiff, North Carolina black farmer Timothy Pigford, previously had sued Agriculture Department only to have his action dismissed “with prejudice.” That means his case was so weak that the court barred him from filing subsequent suits alleging the same claims. That didn’t stop him or his attorneys from attracting thousands of new plaintiffs, winning them class-action status and blanket mediation rights in the process.



The big payday came in April 1999. Lawyers for the plaintiffs and the Department of Agriculture agreed to a settlement that to date has enabled more than 20,000 black farmers, armed with dubious or nonexistent claims of discrimination, to receive a combined more than $1 billion (see www.pigfordmonitor.org/stats). Were that not enough, plaintiffs’ lawyers convinced a federal judge that more relief would be needed to compensate aggrieved parties supposedly unable to file before the deadline. That case, known as Pigford v. Vilsack, or simply Pigford II, resulted in a settlement announced by the USDA this February for $1.25 billion. Congress in 2008 already had set aside $100 million for this purpose, though funds have yet to be released. Agriculture Secretary Vilsack, along with President Obama and Attorney General Eric Holder, are determined to pressure lawmakers into appropriating the remaining $1.15 billion.



The original suit, meanwhile, triggered copycat actions by other plaintiffs. In 2000, Hispanic farmers, in a case now known as Garcia v. Vilsack, filed suit against the USDA, demanding compensation for past discrimination under farm aid programs. Prodding by the Obama Justice Department won class-action status for this case, which had been combined with another longstanding copycat suit, Love v. Vilsack, alleging Agriculture Department discrimination against female farmers. In Garcia, like Pigford, the plaintiffs cited no cases of outright discrimination. No matter – a guilt-stricken USDA this past May offered $1.33 billion to settle. The plaintiffs’ lead attorney, Stephen Hill, quickly denounced the offer as far too low, arguing that since Hispanic farmers outnumber black farmers, they deserve more money. Again, factual evidence is of passing concern.



The recent settlement of Keepseagle v. Vilsack must be understood in the context of this legal hothouse. Let’s look at some key details. The lead plaintiffs, George and Marilyn Keepseagle, a Sioux couple from Fort Yates, North Dakota near Bismarck, sued – or is it Siouxed? – the Department of Agriculture in November 1999 in order to hold on to their ranch. Under threat of foreclosure, the couple had sold 380 acres to make a payment on a loan that the USDA refused to renegotiate. This, they argued, was discrimination based on ethnicity.



Few, if anyone, at the department had the temerity to suggest that the Keepseagles’ default could have been due to poor business practices or insufficient credit history. Despite the department had not kept records of its loan denials prior to 1989, the suit demanded relief for acts dating back to 1981. Note, by the way, Secretary Vilsack’s telltale phrases – “wrongs that Native Americans may have experienced” and “relief to those alleging discrimination.” Such language suggests even he doesn’t believe the allegations against his department.



The settlement, unveiled in U.S. District Court for the District of Columbia before Judge Emmet Sullivan, requires the USDA to make available up to $680 million in damages to thousands of Native American and forgive up to $80 million in outstanding farm loans. Grand total: $760 million. Damages will be awarded through a two-track arrangement of the sort specified in the original Pigford settlement.



That’s not all. The court-enforced pact also requires the Agriculture Department to provide various services to Indian farmers that amount to affirmative action. These measures include a new 15-member advisory agency, the Native American Farmer and Rancher Council, to monitor progress. Eleven members would be Indians or representatives of Indian interests and the other four would be top USDA officials. In addition, the USDA also will create 10 to 15 regional offices providing education and technical assistance to Native American farmers, ranchers and advocates; review farm loan policies in ways that benefit Native Americans; and create an Office of the Ombudsperson to address concerns of all “socially disadvantaged” farmers and ranchers.



The settlement, in other words, is an egalitarian windfall. Lawyers for the plaintiffs, predictably, are all smiles. “The settlement marks a major turning point in the important relationship between Native Americans, our Nation’s first farmers and ranchers, and the USDA,” remarked lead attorney Joseph Sellers, partner at the Washington, D.C. litigation shop of Cohen, Milstein Sellers & Toll. “After three decades, Native Americans farmers and ranchers will receive the justice they deserve, and the USDA has committed to improving the farm loan system in ways that will aid Native Americans for generations to come.” Plaintiffs’ co-counsel David Frantz, a partner at Conlon, Frantz & Phelan, rhapsodized over the new 15-member oversight council: “While the damage awards and debt relief are vital elements of this settlement, the Native American Farmer and Rancher Council will help ensure that the reforms to USDA’s programs are lasting and that USDA honors the civil rights of Native Americans for years to come.” Translation: “We’ll be watching you.”



Taxpayers, directly or indirectly, will subsidize this gambit, which is entirely apart from the Interior Department’s Bureau of Indian Affairs, currently running an annual tab in excess of $2.5 billion. It’s hard to doubt that more lawsuits in this vein will come. Civil rights litigators have made a science out of “discovering” racial, ethnic and sexual discrimination, even if the evidence is circumstantial or exists at all. Victory, in or out of court, means more money for themselves and more money for their clients.



The larger issue is the abuse of the legal system by those claiming high moral ground. Few trends have driven the expansion of government in this country – and at all levels than the transformation of grievance into entitlement. Whether the aggrieved beneficiary is the disabled, women or blacks, by unleashing of the civil lawsuit as a policymaking tool, the culture of legal egalitarianism has produced a society that is not so much more just than fearful.



Business, government, universities and nonprofit groups, by capitulating to plaintiffs in such cases (corporate capitulation is especially expensive), merely encourage more of the same. The generous settlements effectively function as an ongoing lawsuit shakedown program. Advocates of limited government must resist this tendency however frequent the accusations of bigotry and insensitivity. In absence of such a commitment, all the Tea Parties in the world can’t derail this legal juggernaut.



Carl Horowitz

Carl F. Horowitz is director of the Organized Labor Accountability Project of the National Legal and Policy Center, a Townhall.com Gold Partner organization dedicated to promoting ethics in American public life.