NR Relies On Faulty Data To Claim “Vast Majority” Of Claims May Be “Fraudulent”

NR CLAIM: Discrepancy Between Number Of Claimants And Census Figures On Black Farmers At The Time Indicates “Vast Majority” Of Claims May Be “Fraudulent.” Foster writes:

Even after the deadline for submission passed in 1999, claims kept -- and to this day, keep -- pouring in, such that the number of claimants now stands at nearly 100,000. But there is a curious thing: A 1997 agricultural census found only 18,500 black farmers nationwide, and even the most liberal third-party estimates suggest that there never were more than about 33,000 at any point during the period of eligibility between 1981 and 1996. Even if you accept as sound the decree's reasoning that persons are entitled to compensation for “attempting to farm,” the numbers force the conclusion that for every black farmer actually working the land there were four or five who'd been prevented from speeding the plow.

If the queerness of those numbers doesn't stand out on its own, consider that while the USDA's credit and benefit programs are federally funded, decisions on individual applications are made at the county level, usually by small committees of local farmers and ranchers elected by their peers. The Pigford settlement would have you believe that racism was universal, not just inside the institution of the USDA but across all those semi-autonomous county offices: even in places like Jefferson County, Ark., where numerous discrimination claims came in despite the fact that all the supervisors at that office were black.

Parsimony demands a simpler explanation: that the majority, even the vast majority, of Pigford claims are frivolous at best and fraudulent at worst. That is the case being made by perhaps the loudest critic of Pigford: journalistic gadfly Andrew Breitbart. [National Review, 2/21/11, via Nexis, emphasis added]

BREITBART ECHO: Discrepancy Indicates “Massive Fraud.” In his December 2010 Pigford report, Breitbart similarly claimed:

The original estimate on both sides of the lawsuit was that the number of claimants would total between 1,000-4,000. But what started out, as a relatively small case of perhaps 4,000 claimants at most, is today a multi-billion dollar settlement with over 94,000 claimants.

What makes that figure so problematic is that during the years the alleged racial discrimination took place (1981-1996), there were never more than 33,000 black farmers total in the entire United States according to the census bureau. What these numbers speak to is massive fraud. [BigGovernment.com, “The Pigford Shakedown,” 12/6/10]

CRS: Census Bureau Count “Failed To Recognize” Full Number Of African Americans Engaged In Farming By Only Including “Farm Operators.” From a December 2010 Congressional Research Service (CRS) report:

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. [Congressional Research Service, “The Pigford Cases: USDA Settlement of Discrimination Suits by Black Farmers,” 12/10/10, emphasis added]

CRS: Census Count Also Does Not Include Eligible Claimants Who Attempted To Farm Or The Estates Of Deceased Farmers. From the CRS report:

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. [Congressional Research Service, “The Pigford Cases: USDA Settlement of Discrimination Suits by Black Farmers,” 12/10/10]

NR Disappears Broad Bipartisan Support For Reopening And Funding Pigford Settlement

NR CLAIM: Obama “Single Sponsor” Of Legislation Reopening Pigford, “Reluctant Lame-Duck Session” Provided Funding. From the article:

But even the largest scam against taxpayers eventually runs its course. By 2007, with every filing deadline having passed, the consent decree in mothballs, and tens of thousands of unpaid claimants lingering on the rolls, Pigford advocates knew they needed new judicial action, or help from Congress, to get paid. They got the latter in the form of the Pigford Claims Remedy Act of 2007, which came, as so much legislative mischief does, as an amendment to that year's farm bill. It had a single sponsor: Sen. Barack Obama, Democrat of Illinois (where, incidentally, only 98 out of 77,000 farms are operated primarily by blacks). The bill, which became known as Pigford II, extended the filing deadline by more than ten years, through June 19, 2008. It also continued the Track A and Track B routes, appropriated an additional $1.25 billion for payouts, and added a provision that prevented claimants' homes from being foreclosed on while their cases were being adjudicated.

[...]

Obama's championing of Pigford II was seen by some as part of an effort to run up the score against Hillary Clinton with rural black voters in tough southern primaries. Whatever its purpose, the bill languished in committee through the 110th Congress. But Obama didn't forget. As president, he signed the Pigford II legislation, and charged agriculture secretary Tom Vilsack and attorney general Eric Holder with negotiating a new settlement for unpaid claimants. It came in February 2010, with Vilsack's announcement that the federal government would no longer stand vis-à-vis Pigford claimants “as an adversary, but as a partner.”

The settlement made use of $100 million in funds already available for unsettled claims, and in December 2010, Congress added substantially to the kitty, appropriating $1.2 billion after a last-minute blitz by Vilsack to wring votes out of a reluctant lame-duck session. [National Review, 2/21/11, via Nexis]

BREITBART ECHO: “6 Months After He Announced His Presidential Run,” Obama Sponsored Pigford Bill With “No Co-Sponsors.” From Breitbart's report:

To get Pigford II funding after reopening the application process, BFAA founder Gary Grant reached out to then Senator Obama who had just sponsored a bill to get the Pigford suit re-opened. Pigford II, as it is now called, re-opened the settlement to include 60,000 additional late claimants at a cost to American taxpayers of approximately $1.25 billion. Coincidentally, then Senator Obama, who had been in Congress since January 2005, waited 6 months after he announced his presidential run to introduce S.1989: the Pigford Claims Remedy Act of 2007. It had no co-sponsors when introduced on August 3, 2007. The issue had little application in his state. Illinois had a grand total of 171 black farmers in 2007, it seems like an interesting choice of issues to champion.

[...]

When President Obama came into office, one of his first acts was to advocate a settlement for Pigford II. Along with Secretary of the Agriculture Tom Vilsack, the new administration announced in February 2010 that a settlement had been reached on Pigford II. Attorney General Eric Holder was also involved in this decision. Vilsack said, “I'm going to focus all my time and resources to making [Pigford] happen.” Holder declared, “The plaintiffs can move forward and have their claims heard--with the federal government standing not as an adversary, but as a partner.” [BigGovernment.com, “The Pigford Shakedown,” 12/6/10]

LEGISLATION REOPENING PIGFORD WAS SPONSORED BY REPUBLICANS

Obama Co-Sponsored GOP Sen. Grassley's Legislation Reopening Pigford. From a Time magazine report:

[A]s a Senator Obama had championed the black farmers' lawsuit against the USDA.

Along with Republican Senator Chuck Grassley of Iowa, Obama introduced legislation to reopen the case (that was initially settled in 1999) to allow more black farmers to join and to provide more funding to settle claims. The legislative language was added to the Farm Bill passed in 2008 and its inclusion led to a second Administration-negotiated settlement in February of this year for $1.15 billion. [Time, 7/23/10]

• S.515: “Pigford Claims Remedy Act Of 2007.” [S.515, 2/7/07]

Six Months After Grassley Filed His Bill, Obama Became Sole Sponsor Of Similar Legislation. [S.1989, 8/3/2007]

• CRS Summary Of Obama Bill. The Congressional Research Service (CRS) summary of S.1989:

Pigford Claims Remedy Act of 2007 - Declares that any Pigford claimant (relating to a racial discrimination action against the Department of Agriculture) who has not previously obtained a determination on the merits of a Pigford claim may, in a civil action, obtain that determination.

Asserts that it is Congress's intent that this Act be liberally construed so as to effectuate its remedial purpose of giving a full determination on the merits for each denied Pigford claim.

Directs the Secretary of Agriculture to provide a claimant with a report on farm credit loans made within the claimant's county or adjacent county during a specified period which shall contain information on all accepted applicants (but without any personally identifiable information), including: (1) the applicant's race; (2) the application and loan decision dates; and (3) the location of the office making the loan decision.

Sets forth provisions respecting: (1) expedited claim resolution; and (2) foreclosure limitation.

Defines: (1) “Pigford claimant” as an individual who previously submitted a late-filing request under the consent decree in the case of Pigfordv. Glickman (1999); and (2) “Pigford claim” as a discrimination complaint as defined and documented by such consent decree. [CRS Summary, S.1989, 8/3/2007]

• CRS Summary Of Grassley Bill. The CRS summary of S.515:

Pigford Claims Remedy Act of 2007 - Declares that any Pigford claimant (relating to a racial discrimination action against the Department of Agriculture) who has not obtained a determination on the merits of a Pigford claim before enactment of this Act may, in a civil action, obtain that determination.

Asserts that it is Congress' intent that this Act be liberally construed so as to effectuate its remedial purpose of giving a full determination on the merits for each denied Pigford claim.

Defines: (1) “Pigford claimant” as an individual who submitted, before enactment of this Act, a late-filing request under the consent decree in the case of Pigford v. Glickman (1999); and (2) “Pigford claim” as a discrimination complaint as defined and documented by such consent decree. [CRS Summary, S.515, 2/7/07]

GOP House Members Also Backed Pigford Legislation.

• Republican Reps. Steve Chabot (OH) and James Sensenbrenner (IL) Co-Sponsored H.R. 3073: “Pigford Claims Remedy Act of 2007.” [H.R. 3073, 2/7/07]
• Chabot Also Sponsored H.R. 899: “Pigford Claims Remedy Act of 2007.” [H.R. 899, 2/7/07]

Obama Missed All Three Votes On Bill Reopening Pigford.

• Obama Did Not Vote On Senate Version Of 2008 Farm Bill, Which Reopened Pigford. [H.R.2419, Vote #434, 12/14/07]
• Obama Did Not Vote On Farm Bill Conference Report. [H.R.2419, Vote #130, 5/15/08]
• Obama Did Not Vote On Override Of President Bush's Veto Of Farm Bill. [H.R.2419, Vote #140, 5/22/08]

FUNDING LEGISLATION ALSO RECEIVED BROAD GOP SUPPORT

Legislation Funding Pigford II Settlement Passed Senate By Unanimous Consent. From the CRS report: “Finally, on November 19, 2010, by unanimous consent, the Senate passed the Claims Resolution Act of 2010 (H.R. 4783) to provide the $1.15 billion appropriation. The Senate bill was then passed by the House on November 30 and signed by the President on December 8.” [Congressional Research Service, “The Pigford Cases: USDA Settlement of Discrimination Suits by Black Farmers,” 12/10/10]

16 House Republicans Voted For Funding Legislation. [H.R. 4783, Vote #584, 11/30/10]

NR Links Sherrod Settlement To “Feeding Frenzy Of Claimants”

NR CLAIM: “What Followed Was A Feeding Frenzy Of Claimants” And “The Largest Single Settlement” Went To Sherrod's Farm. From the article:

What followed was a feeding frenzy of claimants egged on by fee-seeking tractor-chasers. The original 400 members of the Pigford class had swelled to 14,000, and a total of $1.25 billion had been paid out. The largest single settlement -- some $13,000,000 -- went to a communal farm in Georgia called New Communities, Inc., headed by Charles Sherrod and his wife, Shirley, who would be hired by the USDA, where she would gain a measure of notoriety, just three days after she received her settlement. [National Review, 2/21/11, via Nexis]

BREITBART ECHO: Sherrod Hiring After Settlement Was “A Remarkable Turn Of Events.” From Breitbart's report:

[The Pigford settlement] allowed farmers to have a hearing before a court-appointed independent arbitrator to seek larger damages. Shirley Sherrod and her husband Charles chose this route. They had at one point operated New Communities Inc., a communal farm in Georgia, which was originally incorporated in 1969. By 1985 it was going broke and they suspended operations. By 1990 the farm had dissolved. But shortly after the consent decree authorizing payments was issued in 1999, New Communities was reformed, with Shirley Sherrod placed on the Board of Directors. Claiming discrimination, New Communities filed suit against the USDA and through arbitration they were awarded an almost $13,000,000 settlement, the largest amount ever won through Pigford. (The second largest award, at least according to the public record, was $675,000.) This included $150,000 each for Charles and Shirley for “pain and suffering,” as well as $1.5 million in debt forgiveness.

On July 22, 2009, they received approval of their settlement. Three days the USDA later hired Shirley Sherrod. This was a remarkable turn of events. When was the last time you heard of a litigant hiring a plaintiff after the case was resolved? [BigGovernment.com, “The Pigford Shakedown,” 12/6/10]

Sherrod Received Payout From Pigford Because An Arbitrator Found That Sherrod And Her Partners Had Been Subject To An “Outrageous Act” And Likened It To The Way A “Feudal Baron” Treated His Serfs. An arbitrator appointed to review the claims by Sherrod, her partners, and her organization New Communities, Inc., found that the claimants had provided numerous instances in which they had been treated differently from white farmers following a major drought in the early 1980s and that the USDA “offered no nondiscriminatory reason for its conduct.” Specifically, with regard to a demand by the Farmers Home Administration that New Communities pay $50,000 from the sale of timber in order to secure an emergency loan, the arbitrator found:

Claimant testified that “Farmer B, a white farm located in Lee County sold timber in 1981 ... and the sale proceeds [were] treated like normal income. He didn't have to give the proceeds of the timber sale to FmHA.” Claimant's expert testified that the “County Supervisor accepted that timber attached to real property is normal farm income.” As a result, the Chief Arbitrator finds that FmHA did treat a similarly situated white farmer more favorably than New Communities.

Respondent alleges that it had a nondiscriminatory reason for making the $50,000 demand as a precondition to obtaining the Emergency Loan - that “since it was part of the real estate and reduced the value of the real estate, the FSA policy is that the borrower has to pay toward the liens of the real estate from the proceeds of, in this case, the timber sale.” However, the arbitrator found that the Respondent did not have a security interest in the Dewey Gowan property. Accordingly, the Chief Arbitrator finds the USDA's explanation for why it made a $50,000 demand on New Communities as a precondition to obtain a loan was a pretext. The demand for the $50,000 realized from property in which Respondent had no interest, was an outrageous act -- one totally unsupported by FmHA policy or regulation. In fact, the County Supervisor, in his deposition testified that he could not think of any circumstances under which FmHA would require such a payment. The payment smacks of nothing more than a feudal baron demanding additional crops from his serfs. The Chief Arbitrator finds no legitimate nondiscriminatory reasons for the demand. [In re: The Arbitration of New Communities, Inc., 7/22/2009, emphasis added]

NR Downplays Circumstances That Led To Low “Bar For Evidence” For Claimants

NR CLAIM: Settlement Allowed That Most Claimants Lacked Documentation Of Discrimination, “Purportedly Owing To Poor Record-Keeping By The USDA.” From the article:

The “Pigford class” -- the range of individuals eligible to claim settlement money -- originally was defined as all African-American farmers who (1) farmed between January 1, 1983, and Feb. 21, 1997; and (2) applied, during that time period, for participation in a federal farm program with USDA, and as a direct result of a determination by USDA in response to said application, believed that they were discriminated against on the basis of race, and filed a written discrimination complaint with USDA in that time period. Both sides acknowledged that the class size wasn't likely to exceed 2,500. But the seeds of abuse were already sown. Despite the fact that the class was at first strictly limited to those who had “filed a written discrimination complaint” with the USDA, the settlement crucially allowed that most members of the class lacked any documentation of these complaints, purportedly owing to poor record-keeping by the USDA. So the resolution mechanism offered potential claimants two “tracks” toward settlement money. Track B required a higher bar for evidence -- the “preponderance” standard traditional in civil actions, demonstrated during one-day “mini-trials” before court-appointed arbitrators -- but it came with no cap on potential awards. Track A provided, in the words of the case's judge, “those class members with little or no documentary evidence with a virtually automatic cash payment of $50,000, and forgiveness of debt owed to the USDA.” Track A claimants would also get their taxes on that debt paid directly to the IRS for them, and priority consideration on their next USDA loan application. [National Review, 2/21/11, via Nexis, emphasis added]

Judge: Both Parties Acknowledged Lack Of Documentation Was Not The Fault Of Claimants. From Judge Paul Friedman's opinion in Pigford v. Glickman:

The ultimate settlement of this action envisions the creation of a mechanism on a class-wide basis that will then be utilized to resolve the individual claims of class members outside the traditional litigation process, most of them (Track A) in a rather formulaic way. Most members of the class lack documentation of the allegedly discriminatory transactions at issue. Without any documentation of those transactions, it would be difficult if not impossible for an individual farmer to prevail in a suit in federal court under a traditional preponderance of the evidence standard. The parties acknowledge, however, that it is not the fault of class members that they lack records. Since class members' lack of documentation is at least in part attributable to the passage of time which has been exacerbated by the USDA's failure to timely process complaints of discrimination, there is a common issue of whether and how best to provide relief to class members who lack documentation, and that common issue “predominate[s] over any questions affecting only individual members.” See Rule 23(b)(3), Fed. R. Civ. P. This class action and its settlement as proposed in the Consent Decree provide a mechanism to address that common issue. [Opinion, Pigford v. Glickman, 5/14/99, via PigfordMonitor.org]

Judge: Staff At USDA Office Of Civil Rights “Simply Threw Discrimination Complaints In The Trash” In Some Cases. From Judge Friedman's opinion:

Any farmer who believed that his application to those programs was denied on the basis of his race or for other discriminatory reasons theoretically had open to him a process for filing a civil rights complaint either with the Secretary of Agriculture or with the Office of Civil Rights Enforcement and Adjudication (“OCREA”) at USDA. USDA regulations set forth a detailed process by which these complaints were supposed to be investigated and conciliated, and ultimately a farmer who was unhappy with the outcome was entitled to sue in federal court under ECOA. See Pigford v. Glickman, 182 F.R.D. 341, 342-44 (D.D.C. 1998).

All the evidence developed by the USDA and presented to the Court indicates, however, that this system was functionally nonexistent for well over a decade. In 1983, OCREA essentially was dismantled and complaints that were filed were never processed, investigated or forwarded to the appropriate agencies for conciliation. As a result, farmers who filed complaints of discrimination never received a response, or if they did receive a response it was a cursory denial of relief. In some cases, OCREA staff simply threw discrimination complaints in the trash without ever responding to or investigating them. In other cases, even if there was a finding of discrimination, the farmer never received any relief. [Opinion, Pigford v. Glickman, 5/14/99, via PigfordMonitor.org]

NR Pushes Breitbart's Anonymously Sourced Claim That FBI Shut Down Pigford Investigation To Avoid “Racial Politics”

NR CLAIM: According To Breitbart's Anonymous Source, FBI Investigation “Never Went Anywhere” Because Prosecutors Wanted To Avoid “Racial Politics.” From the article:

The government is not unaware of the widespread fraud. According to an anonymous FBI source quoted in Breitbart's report, a preliminary investigation into Pigford suggested that at least half the claims filed had been falsified -- but the investigation never went anywhere, because federal prosecutors had no taste for the racial politics that would have attended it. [National Review, 2/21/11, via Nexis]

BREITBART ECHO: FBI Investigation Was “Thwarted” And “Shut Down -- But Not Because Of Lack Of Evidence.” From Breitbart's report:

It is the story of an FBI investigation thwarted, and USDA workers threatened and silenced. It is a tale of trial attorneys getting rich, activist groups using it for their political gain, and politicians using the settlement as a means of buying votes.

[...]

There was an FBI investigation launched, which included supervisory agents in Washington as well as agents in the field. One individual who participated in these FBI investigations, who prefers to stay anonymous (but is willing to cooperate openly with a congressional investigation), told us that they found numerous instances of fraud carried out under Pigford. This individual estimates that based on the FBI investigation, at least half of the claims filed under Pigford were false. But when U.S. attorneys were contacted with the information, they were reluctant to pursue them because of the politics involved. They were also concerned, according to this source, that they might be accused of engaging in “selective prosecution.” (Of course any prosecution of crime is in some instances selective because not all individuals who commit them will face justice.) The investigation of Pigford fraud was eventually shut down -- but not because of a lack of evidence. [BigGovernment.com, “The Pigford Shakedown,” 12/6/10]

USDA: Allegations Of Fraud Were Prosecuted By The Justice Department. In an article about House conservatives' complaints that the Pigford II settlement is “rife with fraud,” the National Journal reported:

Agriculture Secretary Tom Vilsack is firing back at a group of House conservatives who continue [to] assert that the $1.25 billion discrimination settlement with black farmers included in legislation passed Friday by the Senate is rife with fraud.

[...]

The USDA points out that allegations of fraud in connection with [the first Pigford] settlement program all were forwarded to the department's inspector general, who then passed them to the FBI. Ultimately, according to the department, the FBI prosecuted a total of 3 individuals -- out of a total of 20,000 claimants.

In his statement today, Vilsack said the Obama administration is “committed to ensuring that anyone receiving a payment under Pigford II was the victim of discrimination and has a valid claim that deserves compensation by following the very specific criteria outlined in the 2008 farm bill.” [National Journal, 11/22/10]

NR Report Itself Acknowledges Cases Successfully Investigated And Prosecuted By Justice Department. From the article:

Though Breitbart says the biggest revelations are yet to come, he has coauthored a report detailing some of the crime that has been directly tied to Pigford. The most sensational example comes from 2006, when a Mississippi couple was sentenced to life in prison on conspiracy charges in the murder of Clovis Reed, who had plotted with the couple to make fraudulent Pigford claims and who they feared would testify against them in court. The year before, two college administrators in Arkansas were convicted of attempting to fraudulently claim $400,000 after they attended a meeting whose organizers told them the settlement was a “veiled way to collect reparations for centuries-old grievances.” [National Review, 2/21/11, via Nexis]