Obama to sign bill awarding payments to black farmers: justice or 'fraud'?

President Obama signs a law Wednesday aimed at rectifying USDA actions that undercut black farmers. Some conservatives call it 'modern-day reparations' that reward political friends.

President Obama intends to sign a $1.15 billion settlement for black farmers on Wednesday, bringing to a close what he has called "a painful chapter in American history" – discrimination that led to blacks losing their grip on the land.

Years in the making, the so-called Pigford II settlement has stirred much debate about government responsibility to repay blacks for unfair US Department of Agriculture (USDA) loan policies and about whether such settlements amount to backdoor reparations for general historic discrimination.

The legislation opens the way for about 80,000 blacks to settle claims expected to average $50,000. Many conservatives see it as an outright raid on the US Treasury that could put taxpayers on the hook for more direct payments to Democratic special-interest groups in the farm sector, namely women and Hispanics who are preparing separate lawsuits. (White farmers, too, are planning to sue the USDA over its loan policies.)

"Any time you're trying to go back and compensate people based on past discrimination, figuring out who should be compensated and how much is always tricky, so the devil's in the details," says Alan Abramowitz, a political scientist at Emory University, in Atlanta.

The Pigford II legislation is the second phase of a lawsuit filed by North Carolina farmer Timothy Pigford, who joined with 400 black farmers to complain about USDA loan policies between 1983 and 1987. In 2006, then-Senator Obama sponsored a version of the current bill, opening up a second settlement process to black farmers and farm families whose claims were caught up in bureaucracy and congressional wrangling over funding.

“Black farmers have waited many years for this day – the end of denied justice, the dawn of a new era of equality," said John Boyd, president of the National Black Farmers Association, in a statement on Wednesday.

But critics cite several concerns with the soon-to-be-law. One is that about 33,000 black farms were in existence at the time of Pigford's original filing, yet 80,000 claimants have filed for settlement. Rep. Michele Bachmann (R) of Minnesota, for one, recently called Pigford II "a complete fraud."

"This is what happens when government rings the dinner bell, and it's an indication of just how loose the rules are for vetting past injustices, real or not," Investors Business Daily wrote Tuesday in an editorial.

Jimmy Dismuke, a black hog farmer from Arkansas, claims he's seen fraud first-hand in the Pigford process. In a recent story published at Big Government.com, a conservative website, Mr. Dismuke says he has counted more than 300 fraudulent Pigford claims in Arkansas alone, including a case in which people who kept potted tomato plants claimed to be farmers and got $50,000. He also claims that private lawyers made the rounds in black churches, enticing potential claimants with easy payouts.

"Pigford is the biggest rip-off this country has ever known, and there are lots of people in positions of power that know it," Dismuke writes. "Politicians are using it to buy votes. Trial lawyers are using it to get rich."

Proponents say the discrepancy between the number of claimants and actual numbers of black farmers is exactly what the legislation seeks to redress. In the 1980s and '90s, thousands of black families lost their farms, the USDA has acknowledged, in part because they were unfairly denied loans or were approved for smaller loans than white farmers received.

Dallas lawyer Augustus Corbett, who grew up on a North Carolina farm, calls the USDA's past actions part of a broader "conspiracy," especially in the South, designed to let primarily white developers buy up black-owned farmland for pennies on the dollar.

Bipartisan support for the bill is tied to three layers of fraud protection, including the appointment of an independent trustee who Agriculture Secretary Tom Vilsack says will conduct "multiple audits that will focus across the whole." Under the previous Pigford settlement, USDA investigators found only three instances of fraud among 15,000 claims.

The law Obama signs Wednesday also includes a $3.5 billion settlement process for 500,000 Native Americans who claim that the Interior Department mishandled billions in timber and mining royalties on Indian lands.

Rep. Steve King (R) of Iowa has called for hearings on the Pigford settlement after Republicans take control of the House in January.

Claims that the settlements are a taxpayer-funded political ploy to enrich trial lawyers and reward the Democratic base may not register loudly, suggests Mr. Abramowitz at Emory, noting that the electorate is more concerned about the larger bailouts of corporate America.

"I think some of the claims that conservative groups have been making about fraud are greatly exaggerated, but, sure, there's always potential that there could be some fraudulent claims," he says. "But you have to weigh that against the injustice that was done."