A USDA program implodes on taxpayers

In 1999, President Bill Clinton set out to right a wrong: the government’s widespread discrimination against black farmers, particularly in the South. The victims had applied for farming loans but, owing to bias on the part of federal loan officers, had been rejected. Faced with 1,000 claims in a class-action lawsuit, the U.S. Department of Agriculture agreed to pay $50,000 to each claimant to settle the matter. “It’s a tremendous victory for black farmers across the nation,” exulted John Boyd Jr., head of the National Black Farmers Association.

But what started out as a simple attempt to compensate for past injustices has ended up as something much less ennobling ― an out-of-control giveaway program that rains federal dollars on undeserving opportunists as well as the real victims. Instead of 1,000, more than 90,000 people have filed claims, and the price tag may rise to $4.4 billion. The compensation has been expanded to include Hispanic and female farmers. And it has become so indiscriminately generous that even some black farmers shake their heads.

Credit where it’s due: Much of the unfolding information on this federal fiasco comes from a 5,200-word investigative report in Friday’s New York Times.

Over the years the government didn’t quite hand out cash blindly, but close. Because most of the relevant USDA records had been destroyed, it was hard for legitimate victims to prove they had been shafted, and most of them had no records, either. So the Clinton administration elected, as the presiding judge explained, to grant people “with little or no documentary evidence with a virtually automatic cash payment of $50,000.”

That approach had the apparent virtues of letting the farmers get compensation without a difficult court battle and letting the government conclude the matter speedily and without excessive cost. But things didn’t work out quite as expected. Before long, the government was swamped with dubious claims.

In 16 Southern ZIP codes, the Times found, “the number of successful claimants exceeded the number of farms operated by people of any race in 1997.” Nearly a third of payments went to mainly urban counties. Some applicants were as young as 4 years old. A former USDA official told the Times that in one ZIP code in Columbus, Ohio, nearly everyone in two adjoining apartment buildings had filed claims. One Arkansas recipient said, “It just went wild. Some people didn’t even have a garden in the ground.”

Latinos and females filed lawsuits claiming they too had encountered discrimination from the USDA, but the courts said the evidence did not support the charge. Under pressure from the Congressional Hispanic Caucus, though, the Obama administration agreed to settle their claims for the same amount of money ― though with somewhat stricter standards of proof.

But the recruitment of claimants evidently hasn’t stopped. The Times’ report closed with a scene on a recent Thursday night at a church in Little Rock, Ark., with the head of a farmers’ advocacy group boasting to listeners that “he and his four siblings had all collected awards, and his sister had acquired another $50,000 on behalf of their dead father. She cinched the claim, he said to a ripple of laughter, by asserting that her father had whispered on his deathbed, ‘I was discriminated against by USDA.’”

Agriculture Secretary Tom Vilsack, a former Democratic governor of Iowa, defended the program, blaming criticism on USDA employees who refuse to admit the agency’s past mistakes. The Justice Department said the program may have headed off even greater expenses.

But that may be wishful thinking. A balance has to be struck between making it feasible for victims of discrimination to get justice and inviting widespread abuse. In this instance the government seems to have erred badly in the direction of making claims too easy.

Given that, it should be no surprise to find unscrupulous people taking advantage of the chance to reap a windfall. One Arkansas farmer who was one of the original claimants sized up the problem neatly: “Any time you are going to throw money up in the air, you are going to have people acting crazy.”

(The Chicago Tribune)

(MCT Information Services)