July 20, 2004

Obstruction of Justice: UPDATE: USDA Refuses to Own Up to Failings of Settlement with African American Farmers

Instead of taking responsibility for the failures of the out-of-court settlement with African American farmers for racial discrimination in its loan and subsidy programs arising from the Pigford v. Veneman case, the United States Department of Agriculture (USDA) has attempted to deflect attention from its wrongdoings by blaming the settlement's shortcomings on the United States Department of Justice (DOJ) and the private entities it hired to run the program. In response to a renewed public interest in the progress of the settlement, and in defending a second racial discrimination class action, USDA has claimed that the private monitors are solely responsible for the settlement's surprisingly high denial rates, and that DOJ is preventing USDA from addressing any of the settlement's problems. USDA's response is disappointing and disingenuous. In fact, USDA has spent at least $12 million dollars challenging successful settlement claims. USDA was responsible for the behavior that led to the settlement, and has the duty to ensure that the settlement fairly compensates African American farmers for their resulting losses.

The USDA Civil Rights Action Team (CRAT) reported that "[p]articipation rates in ... programs of the former Agricultural Stabilization and Conservation Service, particularly commodity programs and disaster programs, were disproportionately low for all minorities." Civil Rights at the United States Department of Agriculture, A Report by the Civil Rights Action Team, February 1997, p. 21. The report further stated that "one farm advocate at the Halifax, NC, listening session stated that according to information he received through the Freedom of Information Act ...'when hearing officers rule for the agencies, they were competent [upheld] 98 percent of the time, but when they ruled for the farmer, these same hearing officers were incompetent [reversed] over 50 percent of the time.... This is indisputable evidence of bias and discrimination against a whole class of farmers....'" CRAT at 23-24. The report also found that loan processing times for black farmers were three times longer than for white farmers in southeastern states.

The USDA National Commission on Small Farms reported that "[t]he history of discrimination by the U.S. Department of Agriculture in services extended to [minority] farmers, ranchers, and small farmers, and to small forestry owners and operators, is well documented. Discrimination has been a contributing factor in the dramatic decline of Black farmers over the last several decades." A Time to Act, A Report of the USDA National Commission on Small Farms, January 1998, p. 40.

  • USDA Has Only Paid 1 in 4 Dollars of the Settlement's Value to African American Family Farmers. USDA has responded to concerns about the low payout rate in the settlement by insincerely stating that it did not promise to pay farmers a specific amount. The Consent Decree between African American farmers and USDA was estimated to be worth $2.25 billion in payments to farmers, but USDA has only paid $650 million in cash payments to farmers. This $2.25 billion estimate appears in a declaration from the attorneys for the farmers, and is cited in the fairness opinion in which the Court approved the proposed settlement. (Pigford v. Glickman, 185 FRD 82, 95) Judge Friedman, in assessing the fairness of the settlement, referenced this value, stating, "under the terms of this Consent Decree, the USDA is obligated to pay billions of dollars to African American farmers who have suffered discrimination." (Id.) This statement clearly reflects the farmers' and the Court's understanding of USDA's promise. If USDA did not intend to fulfill this promise, it should have made a clear statement challenging this assessment at the time the Consent Decree was under consideration by the federal court, rather than five years after the settlement was reached and approved.
  • African American Family Farmers in the Settlement Faced USDA Opposition in Accessing Vital Information that Could Have Proved Their Claims. Although USDA has turned attention to the private individuals and companies that were hired to run the settlement to justify the high rate of denials in the settlement, USDA's refusal to provide for access to data on "similarly situated white farmers" created an obstacle which contributed to farmers' disappointing approval rates. According to the Court approving the settlement, farmers in the class were supposed to receive a "virtually automatic cash payment of $50,000," with little or no documentation required, but only 60% of the farmers in the class received this payment. (See Pigford v. Glickman, 182 F.R.D. 82, 95 (D.D.C. 1999)) While arguing that African American farmers had to meet exacting standards in proving that they fared worse than specifically identified, similarly situated white farmers, USDA consistently denied access to its files that held this information, making it nearly impossible for most farmers to succeed in the settlement.
  • USDA Challenged the Rulings of the Private Entities that Presided over the Settlement. Although USDA has recently claimed that the arbitrators and adjudicators that the Department hired to run the settlement were the only entities responsible for the low success rate of the farmers in the settlement, USDA filed numerous challenges seeking to overturn awards to farmers. In fact, USDA's actions prompted the Court to comment on the surprisingly large number of USDA objections to successful claims. USDA filed challenges to at least 686 farmers who were awarded compensation the settlement. Also, DOJ records show that they were paid at least $12 million by USDA to spend some 56,000 legal staff hours challenging farmers' claims after the settlement was reached.
  • USDA Has Acknowledged that African American Family Farmers were Subject to Unfair Treatment in Loan and Subsidy Programs. USDA is disingenuously relying on the absence of an admission of guilt in the Consent Decree to explain its litigious stance in the settlement process. The fact is that USDA accepted financial responsibility for the damages caused by discrimination underlying the settlement and acknowledged publicly that African American farmers faced discrimination in USDA loan and subsidy programs. USDA's own Office of Inspector General and Civil Rights Action Team (CRAT) reports were cited by the Court in Pigford as proof of the underlying discrimination, "The reports of the Inspector General and the Civil Rights Action Team provide a persuasive indictment of the civil rights record of the USDA and the pervasive discrimination against African American farmers." (Pigford v. Glickman, 185 FRD 82, 103-4).

Over five years after reaching the agreement with USDA that ended the Pigford v. Veneman civil rights case, African American family farmers are still struggling within an inadequate settlement program:

  • 8,600 of 22,000 farmers in the settlement received nothing;
  • 64,000 farmers were turned away without the opportunity to even file a claim; and
  • USDA denied farmers access to vital information that could have proved their claims.

These farmers deserve a meaningful remedy that provides an opportunity for all potential claimants to have their cases heard on the merits and allows for consideration of all USDA-held data that may help them prove their claims.

USDA's mishandling of subsidy and loan programs is the sole source of the underlying problem, and USDA is responsible for rectifying this wrong. The settlement has utterly failed to live up to its promise of resolving the problems caused by decades of USDA discrimination against African American farmers. The private companies and individuals that were hired to run the settlement had no hand in USDA's underlying wrongdoings, and they are accountable neither to the public nor to the African American family farmers involved. The Department of Justice, as USDA's legal representative, is required to act in USDA's interests. USDA must accept accountability for its actions, stop pointing fingers at other parties and remedy the problems with the settlement without further delay.