Number of Black Farmers Who Will Get Payments from $1.25 Billion USDA Settlement Tough to Determine, Attorneys Say

December 7, 2010 - 4:01 AM

Ag Secretary Tom Vilsack

Agriculture Secretary Tom Vilsack at the Department of Agriculture in Washington, Wednesday, July 21, 2010 (AP photo)

(CNSNews.com) - The number of African-American farmers who will eventually receive a portion of a $1.25-billion government settlement for discrimination by the U.S. Department of Agriculture (USDA) is almost impossible to determine at this point, said attorneys representing the second batch of complainants in the Pigford case.

Congress recently approved $1.15 billion--to add to $100 million approved in the 2008 farm bill--to compensate black farmers who say the USDA discriminated against them sometime between 1981 and 1996, but missed the 1999 filing deadline for a settlement in the case of Pigford v. Glickman that was made by the Clinton administration.

As a result of the Clinton-era settlement (Pigford I), 22,550 black farmers filed claims by the relevant deadlines, and the U.S. government ultimately paid about $1 billion to 15,640 of them.

 “Pigford II” refers to a second round of discrimination claims made since 1999 and a second settlement made with black farmers by with Obama administration. 

“We’ve already paid out compensation to 16,000, and now we’re giving out $1.15 billion to an additional 94,000 claimants, there is obvious fraud here that can’t be accounted for,” Rep. Michelle Bachmann (R-Minn.) told CNSNews.com.

“If there was that massive level of fraud across every level USDA department in the United States,” she said, “why is it that not even one employee has been fired from USDA or reprimanded or suspended or fined? It’s not even possible.”

Andrew Marks, one of the plaintiffs’ attorneys in the case, said not all of the people who are eligible to file claims will actually go ahead with one and end up receiving compensation.

“There is a number eligible to file that will be between 84,000 and 85,000,” Marks told CNSNews.com. “One, not all will file. Two, not all eligible to file will get past the first step. Three, those that do get past the first step, many will be denied.”

As for those who will actually get paid?

“It will certainly be more than 10,000. It will very well likely be over 20,000,” Marks said. “I would be shocked if it’s 40,000 to 50,000.”

According to a Congressional Research Service report published in June, about 73,800 Pigford II petitions had been filed by that point (66,000 of them before a Sept. 15, 2000 extended deadline for Pigford I, which allowed people to file late if they had missed the original deadline for “extraordinary” reason such as postal failure or a hurricane). Both members of Congress and attorneys for the plaintiffs said that number has risen to 94,000 since then. A USDA spokesperson did not confirm that number on Friday or Monday after phone calls and e-mails from CNSNews.com.

However, during the period 1981 to 1996, when the discrimination by USDA allegedly occurred, the number of African American farm operators in the United States peaked at 33,000 in 1982, according to the U.S. Census Bureau. By 1992, the Census Bureau says, the number of African-American farmers had fallen as low as 19,000. (There were 2.24 million total farmers in the United States in 1982 and 1.93 million in 1992.)

“It’s Census data. The Census is a snapshot in time every five years,” David J. Frantz, one of the lawyers for the plaintiffs, told CNSNews.com. “In the class year, January 1, 1995 there may have been 30,000 black farmers on that particular day. That’s not to say in the preceding five years there were more than that.”

The case is not limited to those who were farming, Frantz added, but included those who were prevented from farming because they did not get USDA loans.

“I personally worked with many, many young individuals who went through that,” Frantz said. “A typical scenario would be that, ‘I was born and raised on a farm and then I went into the army after high school. When I came back, I wanted to get back into farming and I went to the Farm Service Agency to get a loan so I could rent some land. My uncle was going to rent me 250 acres so I was going to raise beans. I went to get a loan and they turned me down.’ That’s a very common scenario.”

The 94,000 claims represent the total number of inquiries made to the USDA about getting a piece of the settlement, and it will be narrowed dramatically, Frantz said.

“Do I think there will be 94,000 successful claimants? Absolutely not,” he said. “That’s just the number of folks who made a contact and an inquiry and asked to be allowed to file a claim.”

“All of those people will not satisfy the fairly rigorous requirements for a claim,” said Frantz. “In Pigford I, we had 29,000 people who actually sent in claim forms. The number of inquiries was far more than that. Of the 29,000 that sent in claim forms, of those, about 7,000 were found not even to be eligible class members, and then of the 22,000 that were eligible class members, 16,000 claims were approved.”

Under track A, claimants can present claims to the USDA with a preponderance of evidence of their claim and denial and get $50,000. Under track B, there is a higher burden of proof to specify a precise settlement amount.

Frantz was counsel in the first class-action lawsuit and said, “I personally know of less than five instances in which any federal authority identified a fraudulent claim. Those were resolved. This fear is vastly overstated.”

The settlement, agreed to in February by Agriculture Secretary Tom Vilsack and Attorney General Eric Holder with the plaintiffs, is written to compensate the black farmers $1.25 billion. Congress had already approved $100 million for the case in the 2008 farm bill. The Senate approved the $1.15 billion by unanimous consent and in the House of Representatives by a vote of 256 to 152.

Supporters of the Pigford II settlement tout safeguards that were not part of Pigford I, such as adjudicators authorized to examine all claims with the authority to ask claimants for additional documentation if they suspect fraud, as well as requiring claimants’ attorneys to certify that there is evidentiary support for the claim.

Also, the Senate added a provision that would require the USDA Office of Inspector General and the Government Accountability Office to audit the payouts.

However, Rep. Steve King (R-Iowa), a member of both the Agriculture and the Judiciary Committees in the House, believes these safeguards are not adequate.

“There’s no proof of discrimination that’s required,” King told CNSNews.com. “They don’t have to technically allege discrimination. They have to say that they believe they were discriminated against. Sign the affidavit that you complained about it. It’s so utterly weak. You can’t have a close family member sign it, but Jim and Bob can go in there and sign each others and walk out each with $50,000.”