The Pigford v. Glickman lawsuit settlement paid out more than $1.25 billion, much of it to fraudulent claimants.
Pigford v. Glickman was a lawsuit filed by Timothy Pigford in 1997 against the U.S. Department of Agriculture (USDA), naming Secretary of Agriculture Dan Glickman as the defendant. Pigford, who was initially joined by an additional 400 plaintiffs (the case eventually expanded into class action lawsuit representing thousands of farmers), maintained that the USDA had discriminated against black farmers on the basis of race in determining how to allocate various government support loans, disaster payments, and other financial assistance to farmers and had failed to investigate or properly respond to complaints of this nature from 1983 to 1997:Litigation against the U.S. Department of Agriculture (USDA) for discrimination against African American farmers began in August 1997 with two suits brought by black farmers, Pigford v. Glickman and Brewington v. Glickman, but its origins go back much further. For many years, black farmers had complained that they were not receiving fair treatment when they applied to local county committees (which make the decisions) for farm loans or assistance. These farmers alleged that they were being denied USDA farm loans or forced to wait longer for loan approval than were non-minority farmers. Many black farmers contended that they were facing foreclosure and financial ruin because the USDA denied them timely loans and debt restructuring. Moreover, many claimed that the USDA was not responsive to discrimination complaints. A huge agency backlog of unresolved complaints began to build after the USDA's Civil Rights Office was closed in 1983. According to [a USDA] commissioned study, few appeals were made by minority complainants because of the slowness of the process, the lack of confidence in the decision makers, the lack of knowledge about the rules, and the significant bureaucracy involved in the process. Other findings showed that (1) the largest USDA loans (top 1%) went to corporations (65%) and white male farmers (25%); (2) loans to black males averaged $4,000 (or 25%) less than those given to white males; and (3) 97% of disaster payments went to white farmers, while less than 1% went to black farmers. The study reported that the reasons for discrepancies in treatment between black and white farmers could not be easily determined due to 'gross deficiencies' in USDA data collection and handling.Under a consent decree that consolidated and settled the Pigford and Brewington cases, any African American who (1) farmed or attempted to farm between January 1, 1981, and December 31, 1996, (2) applied to USDA for farm credit or program benefits and believed that he or she wasdiscriminated against by the USDA on the basis of race, and (3) made a complaint against the USDA on or before July 1, 1997, was eligible to receive a monetary settlement of $50,000 plus relief in the form of loan forgiveness and offsets of tax liability. As of January 2011, a total of $769,400,000 had been paid out 15,388 claimants.In response to claims that a large number of applicants were not fairly considered because, due to a lack of notice, they filed late and were denied review, Republican Senators George Allen and Charles Grassley introduced unsuccessful Congressional bills (in 2006 and 2007, respectively) to provide a mechanism for these applicants to have their claims considered. Finally, in January 2008 several members of Congress (one of whom was Senator Barack Obama of Illinois) urged the Senate and House Agriculture Committees to include in an upcoming farm bill a provision allowing 'certain claimants who submitted late-filing requests under Pigford v. Glickman consent decree opportunity to receive determinations of their claims on their merits.' These additional claims ultimately resulted in a $1.25 billion settlement:Due to concerns about the large number of applicants who did not obtain a determination on the merits of their claims under the original Pigford settlement, Congress included a provision in the 2008 farm bill that permitted any claimant who had submitted a late-filing request under Pigford and who had not previously obtained a determination on the merits of his or her claim to petition in federal court to obtain such a determination. This provision did not reopen the previous Pigford litigation, but rather provided such farmers with a new right to sue. Ultimately, 11 separate lawsuits were filed on behalf of over 25,000 black farmers, and these claims were consolidated into a single case, In re Black Farmers Discrimination Litigation (commonly referred to as Pigford II). On February 18, 2010, Attorney General Holder and Secretary of Agriculture Vilsack announced a $1.25 billion settlement of these Pigford II claims.In response to claims that the number of applicants in the Pigford cases exceeded the number of black farmers enumerated by census information, the Congressional Research Service reported that:Questions have been raised about the number of black farmers who were or are eligible for a settlement under Pigford or Pigford II. Determining the number of African American farm operators who farmed during the period of January 1, 1981, and December 31, 1996, is difficult because of the way in which the Census of Agriculture defined farm operator. Prior to the 2002 Census of Agriculture, only principal farm operators were counted. In the 1982 Census of Agriculture, there were 33,250 African American-operated farms; in 1987, 22,954; in 1992, 18,816; and in 1997, 18,451. Essentially, the number of African American farms was treated as synonymous with the number of African American operators. These statistics, however, failed to recognize that many farms are operated by more than one farm operator. In 2002, the Census of Agriculture collected data for a maximum of three principal operators per farm. The 2002 Census enumerated 29,090 African American farm operators. This statistical change more accurately captured the actual number of operators, that is, those who are actually engaged in farming. For example, a single farm may be operated by four or more operators, each of whom could have conceivably made loan applications to USDA agencies. In addition, a farm operator might operate rented or leased land owned by a principal operator. In such a case, that operator renting or leasing farmland would not have been counted as the operator of that farm. Under the term of the consent decree, however, such a farmer could be an eligible claimant because he or she farmed or tried to farm during the requisite time period. The varying Census definitions of farm, farm operator, and farm owner help explain why the number of initial claimants in the Pigford case (approximately 94,000) was higher than the number of farms/farm operators enumerated by the Census of Agriculture between 1982 and 1997 and why the estimated number of potential Pigford II claimants may be greater than the number of farms/farm operators enumerated in those or subsequent Census counts. In addition, it is important to note that there may be other reasons for discrepancies between the number of farmers reflected in farm Census data and the number of claimants under Pigford or Pigford II. For example, individuals who attempted to farm but who were denied loans or other farm assistance would not be counted as farmers but may have been or may be eligible to file a claim under the terms of the two settlement agreements. Likewise, the estate of a deceased individual who farmed or attempted to farm during the eligibility period may be entitled to relief under either settlement, but such persons would not be counted as farm operators. Finally, due to fraud or mistake, some individuals who are not eligible may have filed or may file claims under Pigford or Pigford II, but such claims would not be entitled to an award. For example, nearly 7,000 Track A claims in Pigford (31%) were denied relief, presumably because such claims lacked merit or had other defects. Thus, the number of claims filed cannot be viewed as an accurate representation of the number of awards that have been or will be made under the two settlements.In April 2013, the New York Times reported that the latter settlement was agreed to despite substantial objections from those who maintained that there was no credible basis for it, and that the process for compensation was wide open to fraudulent claims: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 compensation effort sprang from a desire to redress what the government and a federal judge agreed was a painful legacy of bias against African-Americans by the Agriculture Department. But an examination by The New York Times shows that it 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. In the past five years, it has grown to encompass a second group of African-Americans as well as Hispanic, female and Native American farmers. In all, more than 90,000 people have filed claims. The total cost could top $4.4 billion. From the start, the claims process prompted allegations of widespread fraud and criticism that its very design encouraged people to lie: because relatively few records remained to verify accusations, claimants were not required to present documentary evidence that they had been unfairly treated or had even tried to farm. Agriculture Department reviewers found reams of suspicious claims, from nursery-school-age children and pockets of urban dwellers, sometimes in the same handwriting with nearly identical accounts of discrimination.Shirley Sherrod was the USDA's Georgia State Director of Rural Development who was forced to resign in July 2010 after video excerpts from her address to a March 2010 NAACP event were posted on the Internet, excerpts which supposedly caught her describing how she discriminated against a white farmer who sought her help in 1986 when his farm was about to be foreclosed on. However, a review of the unedited video in its full context revealed that Sherrod said she had in fact extended help to the farmer in question:In the heart of a farm community that still favored whites over blacks, with the USDA known as the 'last plantation,' Sherrod was tasked with helping Eloise and Roger Spooner save their farm. As she recounted many years later in a now widely viewed speech, Sherrod, by then working at a nonprofit organization that assisted farmers in danger of losing their farms, did not feel particularly motivated to help the Spooners, a white couple. Eventually, as any viewing of the entire speech makes clear, Sherrod changed her mind. She did help the couple, with whom she has remained friendly, and the experience became a turning point in her life when she learned to see beyond skin color and sought to work with blacks and whites battling to save small family farms that were shuttering by the thousands.White House officials subsequently issued an apology to Sherrod and offered her a new position with the USDA (which she declined).Shirley Sherrod and her husband received a share of a $13 million payment as part of the settlement of the Pigford case, as described by Time magazine:It was 1985, 20 years after her father was murdered by a white man who was never prosecuted, and the nearly 6,000-acre collective farm she had helped form in the early 1970s to create a sort of African-American utopia in the midst of Georgia's white farming community was going under. Governor Lester Maddox, a segregationist, called the tract of land 'Sharecropper City,' and refused to sign off on a grant that could have helped the families who owned the farm stay afloat. They had applied for loans from the Department of Agriculture's Farmers Home Administration, but often they were turned down or approved late in the crop season, delaying planting and harvesting, to devastating economic effect. The USDA would not let the collective restructure loans or take over the land and lease it back, as had been done for other farmers. Eventually, the land was sold to a white businessman and later turned into subdivisions. Back then, local USDA offices with power over loans were run by whites, and it took three times as long, on average, to process loan applications from black farmers as it did for whites. The Reagan Administration had shuttered the civil rights division in the USDA, which meant that complaints about discrimination were routinely discarded or thrown in drawers even as black ownership of farmland was on a steep decline. The failure of New Communities was so emotionally devastating to its participants that Shirley Sherrod's husband Charles later told the Washington Post, 'For two years after all this happened, I wouldn't even talk about it. Couldn't talk about it, it hurt so much.' But [Shirley] Sherrod did not let the USDA off the hook. New Communities became part of a massive class-action lawsuit against the department that was initially settled in 1999, reopened in 2008 and continues to pay claims for thousands of black farmers found to have been ignored, dismissed or mistreated by the USDA in the 1980s and 1990s. Out of about $1 billion paid out so far - reportedly the biggest civil rights settlement in history - the largest amount went to New Communities, which got some $13 million, with $330,000 awarded to Shirley and Charles Sherrod for mental suffering alone. 'Thirteen million sounds like a lot, but it was not nearly enough. The land itself is probably worth at least $9 million,' says the lawyer for New Communities, Rose Sanders.
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