Pigford’s Fraud on the American Taxpayer

By Abraxas:  for UNCOVERAGE.net

On December 12, 1996, a handful of black farmers, led by John Boyd (founder of the “National Black Farmers Association”) gathered on the frozen grass of Lafayette Park across from the White House to protest what they claimed was widespread racial discrimination by the USDA against black farmers. This protest prompted President Clinton to pressure then Secretary of Agriculture Dan Glickman to investigate if these claims were true.

Glickman promptly suspended all government farm foreclosures pending the outcome of a ‘listening tour’ the following month (January 1997) in which Civil Rights Actions Teams (“CRAT”) traveled across the country gathering information on whether the black farmers’ claims were true. While the investigation discovered that only 205 claims (two-tenths of one percent) out of a total of 116,261 loans and crop payments issued by the USDA’s Farm Service Agency had triggered complaints by black farmers, the 120-page report (“Civil Rights at the United States Department of Agriculture”) stated there was widespread discrimination against black farmers.

In August 1997, black farmer Timothy Pigford of North Carolina filed “Pigford v. Glickman” in the U.S. District Court.[1] (A second lawsuit was filed by another black farmer from North Carolina named Cecil Brewington. Both cases were subsequently joined together as simply “Pigford”.) The suit initially listed 400 black farmers but the number quickly grew to more than 2,000.

In response to the lawsuit, the Department of Justice requested a stay (halt of the proceedings) in order to investigate each claim individually. But U.S. District Judge Paul Friedman (a Clinton appointee) put a stop to the DOJ’s investigation by certifying “Pigford” as a class action lawsuit on October 9, 1998. The judge then set a trial date of February 1, 1999.

The certification of “Pigford” as a class action case made the USDA vulnerable to huge monetary payouts; however, the USDA had two means of preventing this: sovereign immunity and the statute of limitations.

The USDA was granted sovereign immunity by the Civil Rights Act of 1964, as well as the Fair Housing Act and the Rehabilitation Act. But, unfortunately for the USDA, nearly two years earlier[2] Clinton’s Assistant Attorney General Walter Dellinger had removed that immunity when he reinterpreted a different act, the Equal Credit Opportunity Act, to allow civil rights litigants to receive “monetary relief, including compensatory damages, attorneys’ fees, and costs, but not subject to any specific cap…”[3]

This finding left the USDA with just one protection: the statute of limitations. The limit in the case of the USDA was two years, meaning a claimant had to file a lawsuit within two years of the alleged act of discrimination. However, a member of the Congressional Black Caucus — Rep. Eva Clayton (D-NC) — authored a request for a waiver (tailoring the request to apply specifically to the “Pigford” case) and in 1998 Congress approved the waiving of the two year limit in regards to the Equal Credit Opportunity Act.

This waiver, however, has subsequently been found to be unconstitutional, as shown by the United States Supreme Court’s 2003 ruling in “Stogner v. California”. However, because “Pigford” is supported by powerful interests in Congress, to date, no effort has been made to use that Supreme Court ruling to overturn the time waiver in “Pigford”.

Shortly after losing its waiver protection, the USDA announced it would settle and Judge Friedman issued a consent decree on April 14, 1999.

At this point, it is worthwhile to study the language Judge Friedman used in his consent decree. “Forty acres and a mule. As the Civil War drew to a close, the United States government created the Freedmen’s Bureau to provide assistance to former slaves. The government promised to sell or lease to farmers parcels of unoccupied land and land that had been confiscated by the Union during the war, and it promised the loan of a federal government mule to plow that land.” Judge Friedman then relates how the government subsequently broke that promise, thus instilling amongst African Americans “a well-founded and deep-seated mistrust of the USDA. A mistrust borne of a long history of racial discrimination. A mistrust that is well-deserved.”

The term “forty acres and a mule” is the universally accepted language denoting slave reparations. By using such language, Friedman made it clear he viewed “Pigford” as no longer a case involving discrimination against black farmers but instead as one now involving discrimination against every African American citizen. As a result, the true cost of this lawsuit would potentially be not in the billions but trillions of dollars, the amount necessary to reimburse African Americans for a “long history of racial discrimination”.

Judge Friedman divided the consent decree into two parts: “Track A” and “Track B”. Track A claimants were limited to $50,000 apiece, plus relief from outstanding loans and tax liability; but the proof of discrimination was exceptionally low. Track B claimants had no cap on claims; however, they were required to produce extensive documentation of discrimination. (Not surprisingly, 99% of claimants opted for Track A.)

Once the consent degree was finalized, Judge Friedman released $450,000 for advertisement of the “Pigford” settlement. “Quarter-page ads were ordered in 26 general circulation newspapers and 100 black-oriented papers over a two-week period in January 1999. A full-page ad was placed in all editions of TV Guide for an 18-state region, a half-page in Jet magazine, 44 commercials on Black Entertainment Television, and 18 on the Cable News Network.”[4]

Within a month, 15,000 telephone inquiries were received by the USDA in response to these ads. By 2002, the number would peak at 138,911 inquiries for requests forms to file a claim — nearly seven times the amount of black farmers in America.

It was at this time that rumors of malfeasance began to arise. The Oregon contractor, Poorman-Douglas, hired by the USDA, reported that some African Americans “tried to certify young children as aggrieved parties. Husband-wife couples applied separately in hopes of double compensation for the same act. And a number of deceased persons “claimed” their reward, with surviving family and relatives filing on their behalf.”[5]

In another instance, an individual called Daniel Anew (an administrator at Elizabeth City State University) attended a meeting in Pine Bluff, Arkansas in 1999 where he heard about Track A of the “Pigford” lawsuit. Mr. Anew thereupon hooked up with a fellow university official named Emma Brooks (who also was not a farmer) and the both of them began filing false claims which ultimately totaled $400,000. The scam was subsequently discovered and both were sentenced to prison time and restitution in 2005.[6]

In one tragic case, the mutilated corpse of a man named Clovis Reed was discovered in Simpson County, Mississippi in 2003. Reed had been murdered by Kathleen Nelson and her boyfriend, Roosevelt Walker, after they discovered that Reed was a government informant who was about to expose Nelson and Walker’s embezzlement of Track A money which both had received in “Pigford”.[7]

Suspicious claims also permeated Track B claimants. One claim in particular stands out: that of a couple known as Charles and Shirley Sherrod. Between 1969 and 1985, the Sherrods ran a 6,000 acre cooperative farm in Georgia named New Communities, Inc. (“NCI”). NCI had a bad history of worker abuse (long hours, low pay and unsafe conditions) as detailed by a former SNCC organizer named Ron Wilkins who’d gone undercover in 1974 to investigate NCI. The Sherrods retaliated by having Wilkins arrested on bogus charges (which were later dropped).[8] Their mistreatment of him triggered an investigation by the Emergency Land Fund and the United Farm Workers who found that the Sherrods forced workers (many of whom were children under the age of 16) to “work behind machines spraying lethal pesticides…(paying them) from $.67 to $1.63 per hour, put in unnecessary overtime, on a half-hour’s notice, at ungodly hours…”[9] As a result of the UFW’s report, the Sherrods were forced to reimburse their workers for unpaid wages.

In 1985, NCI collapsed. But in 1997, NCI was revived on paper as the Sherrods put in a Track B claim. The Sherrods ultimately received the largest single payout in “Pigford” — $13 million. The award consisted of $8,247,560 for loss of land, $4,241,602 for loss of income, and $150,000 awarded to each of the Sherrods “for pain and suffering”. There was also an unspecified amount for forgiveness of debt.[10]

The $13 million awarded the Sherrods contrasts with second highest Track B award which was just $675,000. It is also interesting to note that three days after the Sherrod’s claim was announced on July 22, 2009, Shirley Sherrod was appointed Georgia Director for Rural Development by the USDA. The mystery deepens when one discovers that only months after her appointment, her husband was suddenly granted (after years of waiting) an FCC license to operate a black-owned radio station in rural Georgia.

In addition to the suspicious claims made in Track A and Track B was the disparity between the number of claims made and the actual number of black farmers. Rep. Larry Combest (R-TX), Chairman of the House Agriculture Committee was unsettled by the fact that though the USDA listed only 3,300 black farmers as borrowers, the court ultimately received more than 95,000 claims. Though the court eventually winnowed those 95,000 claims down to 13,355, Combest still noted that less than 10% of those approved claims (1,316) had ever actually received a loan from the USDA. Combest therefore requested an audit from the General Accounting Office; that audit, however, was subsequently called off without explanation.[11]

Because Judge Friedman ordered all documents in “Pigford” to be sealed, the total amount paid out in this case is unknown. However, the chart issued by the Congressional Research Service below gives a hint as to the cost[12]. (Note, however, that this chart does not give the amounts awarded for Track B claimants, nor the legal cost of class counsel, adjudicators, monitors, etc., the latter estimated to be at least $300 million.):

Track A Statistics as of June 9, 2010
Track A	Totals
Track A decisions	22,550
Final Track A Adjudications Approved	15,640 (69%)
Final Track A Adjudications Denied	6,910 (31%)
$50,000 Cash Awards	$ 768,200,000
$3,000 Non-Credit Awards	$ 1,512,000
Debt Relief	$ 39,180,011
IRS Payments for Title A Claimants	$ 192,050,000
IRS Payments for Debt Relief	$ 6,690,517
Total Track A Relief	$1,007,632,528

Whatever the cost, September 2004 finally saw the last approvals awarded to claimants. At this time, the Black Farmers and Agriculturalists Association filed a $20.5 billion class-action suit against the USDA but it was dismissed for lack of legal standing.[13] For all intents and purposes, therefore, “Pigford” appeared to be at an end.

But then on August 3, 2007 then Senator Barack Obama introduced S.1989, a resolution demanding the “Pigford” consent decree be overturned and the case reopened to allow more black farmers to apply. Considering that Obama’s state of Illinois only had 171 black farmers at the time of his filing, Obama’s championing of “Pigford” would appear to be a little curious. But the curiosity lessens when one realizes that at that moment he filed this resolution, Obama was trailing Hillary Clinton in the polls as both vied for the Democratic nomination for President. At that time in late 2007, the polls showed that more than half of the black voters favored Hillary Clinton over Obama. But then Obama introduced S.1989.

The implications of his resolution were explained in an article in “The Hill” (D.C.’s daily Congressional newspaper). On September 19, 2007, the paper wrote: “Presidential hopeful Sen. Barack Obama (D-Ill.) has taken a leading role on a major civil rights issue affecting black farmers that could give him a boost in Democratic primaries in South Carolina and other states in the South…The Pigford settlement, an obscure issue to most voters, doesn’t even merit an entry on Wikipedia. It is critical, however, among some key Democratic constituencies in the South…“I have yet to do a town hall meeting and not have someone ask me about the settlement,” said Rep. Artur Davis (D-Ala.), who helped bring the matter to Obama’s attention. “It’s a supremely large issue in the black rural community in the South…Pigford may not resonate with northern blacks. But Steve Pruitt, a senior adviser for J.C. Watts Companies who lobbies for the Black Farmers and Agriculturalists Association, predicted it would resonate in the South.”[14]

The paper’s prognostications proved accurate: in his first Southern primary in January 2008 in South Carolina, Obama beat Hillary decisively at the polls. That win is generally acknowledged as the moment in which he moved to the front of the race for the Democratic nomination for President. His strength amongst black voters only increased in June 5, 2008 when the Senate approved Obama’s resolution. As a result, the case was reopened and today it is known as “Pigford II”.

The amount of black farmers eligible for “Pigford II” is roughly estimated at 80,000 (which is interesting given that the 2007 U.S. Census of Agriculture counted only 32,938 black-owned farms in all of the U.S.) Initially, Obama’s resolution requested the amount of $100 million to settle claims; but once Obama became President, his Secretary of Agriculture, Tom Vilsack, added an additional $1.15 billion.

On December 1, 2010, this total $1.25 billion amount was approved by the House and has since been sent on to the Oval Office for signature.

* * * * *

It is an axiom of history that many expected ‘wins’ are defeated because of a seemingly inconsequential decision. One haunting example of this was in July 1863 when General Robert E. Lee was so sure of victory in his upcoming battle against the Union Army that he’d even written a letter dictating the terms of surrender to be placed on President Lincoln’s desk the day after Lee’s victory. But all that changed when Brig. General J. Johnston Pettigrew requested to be allowed a detour into a small town in search of shoes for his men. Lee thought nothing of it and granted permission — but that small decision changed history. At the entrance of that town, Pettigrew unexpectedly collided with Union Brig. General John Buford who fought viciously to keep Pettigrew at bay. As the fighting progressed, each side called in reinforcements, and soon the minor skirmish grew into a major battle. To his horror, Lee was forced to turn his mighty army away from its intended battlefield several miles away and instead wage his climactic battle in that small town. Worse, because Buford had blocked the Confederate Army’s entrance in that town for one crucial day, the Union Army was able to gain the high ground and ultimately win the battle. The town was called Gettysburg.

It can therefore be said (disrespectfully) that the Confederacy collapsed because of a pair of shoes.

It can also be said that the secrecy which “Pigford” had cloaked itself in to protect it from public view collapsed because of a woman’s giggle.

It began in late July 2010 when an angry African American woman began holding news conferences claiming she’d been maligned by Andrew Breitbart’s conservative website and, as a result, was considering suing him. Her complaint stemmed from a snippet of a video Breitbart’s site had posted on July 15, 2010 purporting to show her giggling to a roomful of NAACP personnel about how she’d once blocked government funds to a farmer because he was white. For his part, Breitbart’s sole reason for posting the video was to expose the roomful of NAACP individuals who’d nodded approval as they listened to her talk. He’d meant no harm to the woman in question and expected nothing to happen to her outside of a rebuke. Instead, however, the USDA promptly fired her. The woman’s name was Shirley Sherrod.

Breitbart was stunned at her firing — until former San Francisco mayor, Willie Brown, explained things: “As an old pro, though, I know that you don’t fire someone without at least hearing their side of the story unless you want them gone in the first place. This woman has been a thorn in the side of the Agriculture Department for years. She was part of a class-action lawsuit against the department on behalf of black farmers in the South. For years, she has been operating a community activist organization not unlike ACORN. I think there were those in the Agriculture Department who objected to her being hired in the first place.”[15]

Up until that time, Breitbart had never heard of the ‘class-action lawsuit’ Brown was referring to. Breitbart promptly set out to investigate and in so doing discovered “Pigford”. From that moment on, the case lost its anonymity as Breitbart used his site to heavily publicize the case.

It is ironic that, like General Pettigrew in search of shoes for his men, Shirley Sherrod went in search of the media to support her threatened lawsuit against Breitbart. Instead, she collided with an angry public enraged by a class-action suit which had enriched her to the tune of $13 million. As the media uncovered the even bigger cost of “Pigford”, the anger grew so bad that Ms. Sherrod beat a hasty retreat.

It is safe to say that had Ms. Sherrod not gone in search of the media that day in July, President Obama would not have lost the secrecy necessary to approve the additional $1.25 billion for “Pigford II” without public uproar. But she did and now he has.

While it is true that Congress did approve “Pigford II” and the President will sign it (if he hasn’t already), the fact remains that the funds have not yet been released. And it is a safe bet that few if any of them will be. Because of Breitbart’s publicizing of “Pigford”, awareness of this case has finally gone public, generating intense interest amongst members of Congress — a great deal of it unfavorable. An example of that disproval was shown by a joint press conference given by Reps. Michele Bachmann (R-Minn.), Bob Goodlatte (R-Va.) and Steve King (R-Iowa) in which they announced their determination to block any funds for this case until after a full investigation. The three of them will soon have the means to demand such an investigation once the House moves from Democratic to Republican control in January. In addition, the three representatives will surely be able to count on the support of Rep. Darrell Issa (R-CA) who will become the Chairman of the House Committee on Oversight and Government Reform. Issa has already made his political stance clear by announcing his intention to issue subpoenas on the White House in regards to its part in government funding of certain banks and institutions. It is a safe bet that Rep. Issa will not be averse to slipping in a “Pigford” subpoena along the way.

Shakespeare wrote, “Whereof what’s past is prologue.” But he added something else. “What to come (is) in yours and my discharge.”

This is the prologue of “Pigford”. In the months to come, it will be interesting to see if Congress will have the will to ‘discharge’ the justice which needs to come in this case.

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[1] A second black farmers’ lawsuit, “Brewington v. Vilsack”, was later combined with “Pigford”.[2] Dellinger’s memo was dated April 18, 1994.[3] “Harvest of Lies”, Louis T. March, Representative Government Press, Page 41.[4] Ibid, page 110.[5] “Lawyers, ‘Black Farmers’ Shake Down Taxpayers” by Carl Horowitz, National Legal and Policy Center website (www.nlpc.org.), March 8, 2010.[6] “The Pigford Shakedown: How the Black Farmers’ Cause was Hijacked by Politicians, Trial Lawyers and Community Organizers”, by Gary Hewson, Peter Schweizer and Andrew Breitbart, December 2010, Pages 8-9[7] Ibid., Pages 7-8.

[8] “The Other Side of Shirley Sherrod” by Ron Wilkins, (www.counterpunch.org), August 2, 2010.

[9] “El Macriado”, Vol. VII, No. 9, September 28, 1974, Page 2

[10] “Shirley Sherrod’s Disappearing Act: Not So Fast”, Tom Blumer, Washington Examiner, July 20, 2010.

[11] “Harvest of Lies”, Page 49.

[12] “The Pigford Case: USDA Settlement of a Discrimination Suit by Black Farmers”, Tadlock Cowan and Jody Feder for Congressional Research Service (www.crs.gov) RS20430, June 15, 2010.

[13] “Lawyers, Black Farmers Shake Down Pigford”, Carl Horowitz, National Law Policy Committee, (www.nlpc.org), March 8, 2010.

[14] “As Champion of Black Farmers, Obama Could Win The Southern Votes”, Ian Swanson and Kevin Bogardus, “The Hill”, September 19, 2007.

[15] “Shirley Sherrod long a thorn in Ag Depart.’s side”, Willie Brown, SFGate.com, July 25, 2010

Cross-posted at UNCOVERAGE.net