Congress Delays ‘Black Farmer’ Settlement; Shirley Sherrod in Line for Millions

ShakedownDemanding large financial settlements on behalf of black farmers has been a cottage industry for litigators in this country for more than a dozen years. It has flourished because few in Congress or in successive administrations have chosen to challenge this juggernaut. It appears now, however, that this passivity is beginning to recede. Late last month, the Senate stripped $1.25 billion from a far larger supplemental defense spending bill that would have compensated black farmers for alleged acts of racial discrimination by the U.S. Department of Agriculture (USDA) going back to the early Eighties. Following Senate passage, the House followed suit; President Obama signed the measure last Thursday. In the context of the recent and highly-publicized forced resignation of a mid-level black USDA official, Shirley Sherrod, the issue has taken on an extra edge.

The $1.25 billion in question originated in an out-of-court civil settlement between the Department of Agriculture and lawyers for black farmers in a case now known as Pigford v. Vilsack, or simply, “Pigford II.” Thousands of plaintiffs allege they experienced systemic racial discrimination by department officials. Congress already had authorized $100 million of that sum in 2008. It was the second such settlement. The original lawsuit, initiated in 1997 and settled out of court in 1999, to date has netted black plaintiffs more than $1 billion in USDA relief, mainly in the form of cash payments. The calls for more came about after plaintiffs’ lawyers had argued that many eligible parties lacked the opportunity to file prior to the deadline.

As National Legal and Policy Center noted this March, the case has been a hustle from the start. The claims were based on an inconclusive consultant’s report in the mid Nineties prepared at the behest of then-Agriculture Secretary Dan Glickman and on an even less credible lawsuit filed in 1997 by a black North Carolina farmer named Timothy Pigford. That suit eventually gained class-action status. Plaintiffs’ lawyers managed to convince the USDA into resolving claims through blanket rather than case-by-case mediation. In April 1999, U.S. District Judge Paul Friedman, a Clinton appointee, approved a consent decree that allowed black farmers a choice between “Track A” and “Track B” financial settlements. The overwhelming majority chose Track A, which made them eligible for relief of $50,000 per family plus exemption from outstanding loans and tax liability. Yet neither Pigford nor co-plaintiff Cecil Brewington had cited any specific cases of racial discrimination in USDA credit or grant programs. None of the thousands of plaintiffs were required to show evidence of discrimination. Some of the “farmers” had never farmed in their lives. And if this can be believed, the number of potential claimants has jumped to at least 80,000, a remarkable feat of class-action recruitment considering that the 2007 U.S. Census of Agriculture counted around 18,000 black-owned farms in this country.

Put simply, the case is a fraud. But that hasn’t stopped plaintiffs from coming out of the woodwork to claim their reward. Nearly 70 percent of “Track A” final adjudication applicants (15,640 out of 22,550, as of this July 22) have been approved. That’s a high rate. Apparently, for plaintiffs and their attorneys, it isn’t high enough – thus, Pigford II. The original 1999 settlement, meanwhile, already triggered lawsuits during the past decade on behalf of Hispanic, Native American and women farmers, each group having alleged discrimination. This past May, the Department of Agriculture made an offer of $1.33 billion to the Hispanic farmers. Their lead attorney, without citing any examples of discrimination, claimed the figure was far too low.

Congress wisely deleted funds for the latest Pigford shakedown. But black civil rights activists, for whom an accusation of racism all too often suffices as proof, have vowed to not let this issue rest. This time around, they may be getting help from a former Obama Agriculture Department bureaucrat who suddenly has become a household name: Shirley Sherrod. Ms. Sherrod, whose USDA job title was Georgia Director of Rural Development, was forced out of her post a couple weeks ago by Agriculture Secretary Tom Vilsack after conservative blogger Andrew Breitbart posted a video of a speech that she had given to a local NAACP chapter in Georgia. In the video, she appeared to boast of refusing to help a white farmer on the basis of his race, much to the applause of her audience. Secretary Vilsack soon forced Sherrod to resign, reportedly following consultation with the White House and an endorsement from the NAACP. The video, however, consisted of excerpts from a longer speech in which Sherrod went on to describe her change of heart about that farmer, whom she later befriended.

When the context of the video became known to the general public, the Agriculture Department backtracked. Secretary Vilsack offered Sherrod a new job in the area of advocacy and outreach. Thus far, she has yet to decide whether to take the offer. She did, however announce on July 22 that she likely would file a lawsuit against Breitbart; a week later, at the annual convention of the National Association of Black Journalists, she stated that she “definitely” would sue.

But the Breitbart issue aside, there is another angle to this story far more related to public accountability. As it turns out, Mrs. Sherrod has had plenty of luck with the legal system. Sherrod and her husband, Charles, run a nonprofit advocacy group called Rural Development Leadership Network. That organization last year happened to be awarded about $12.5 million in the Pigford case, a sum representing $8.25 million for the loss of land plus $4.25 million for the loss of income. That didn’t include $300,000 to the Sherrods ($150,000 for each spouse) for “pain and suffering.” Nor did it include an unspecified sum for “debt forgiveness.” Significantly, this settlement, the largest of any Pigford plaintiff, was announced only days before her USDA appointment of July 25, 2009.

On what basis did the Sherrods qualify for this princely sum? Back in 1969, the couple, along with other black families, had established a rural land trust in Lee County, Georgia (in the southwest part of the state) known as New Communities, Inc. With almost 6,000 acres, New Communities was the largest black-owned tract in the country. The trust would retain ownership of the land, but would lease it to black homeowners, farmers and small businessmen. The project received a planning grant from the federal Office of Economic Opportunity. But by 1982, the trust was in poor financial straits. Drought played a role in the demise, as did the State of Georgia’s reluctance to process additional federal funds for implementation. The USDA, believing the project was unsustainable, would not restructure outstanding loans. Three years later, in 1985, the department foreclosed. Mr. and Mrs. Sherrod were convinced that the department’s decisions had been motivated by hostility toward blacks rather than the land trust’s business practices.

Shirley Sherrod is an extreme example of the false notion that a nonwhite person has a right to government aid without having to document any compelling reason. One’s race, in and of itself, serves as a grievance. This idea has defined the Pigford case from the very beginning. Mrs. Sherrod and her husband played their cards well. They stand to collect around $13 million. Countless “late-filing” plaintiffs also want to collect. Congress and the Obama administration can count on pressure from civil rights groups to come up with the taxpayer-funded $1.25 billion to make this happen.