(Nov. 15, 2022) Washington, DC: On November 8, 2022, Southeastern Legal Foundation (SLF) submitted a formal comment regarding the implementation of Section 22007 of the Inflation Reduction Act (IRA). Under Section 22007, the Department of Agriculture (USDA) will select nongovernmental entities to spend $2.2 billion in public dollars to compensate past victims of discrimination in the USDA’s farm lending programs.
The program comes on the heels of the repeal of a similar 2021 USDA program under which the taxpayers paid off the loans of farmers and ranchers of “historically underserved” races and ethnicities. This racially discriminatory program was immediately halted after it was enacted by legal challenges mounted by SLF and others. Rather than defend this unconstitutional race-based program, USDA repealed it and replaced it with Section 22007.
For decades, USDA has repeatedly participated in complex discrimination claims resolution processes that resulted in over $2.4 billion dollars in settlements in the Pigford, In re Black Farmers Discrimination Litigation (Pigford 2), Garcia, Love, and Keepseagle cases. SLF urged USDA to make a “fresh assessment” of how much compensation is required to remedy USDA’s past discriminatory conduct before being rewarded with an additional $2.2 billion to send to entities that it will hand select.
It is unclear what role USDA will assign to outside parties in the expenditure of this hefty sum. SLF’s recommendations for the implementation of Section 22007 urge USDA to ensure that the enlistment of these outside actors was done in a constitutional, transparent, and ethical manner.
SLF’s comment makes two key points. First, SLF urges USDA to take steps to ensure that Section 22007 not become another race-based preference. To that end, SLF recommended that USDA identify as victims only those who have proven their claim in court, and for whom prior remedial measures failed to make whole. SLF also warned about the potential for abuse surrounding the usage of outside entities to spend tax dollars. Pointing out that the decision to spend money is a core governmental function, SLF urged USDA to limit the role of these outside actors, and to take steps to prevent cronyism and ensure transparency and high ethical standards out of these private parties.
Braden H. Boucek, SLF Director of Litigation, said, “the American taxpayer is continually bailing out the Department of Agriculture for its past acts of racism. Before USDA is given an additional $2.2 billion, we deserve answers about why USDA is such a career offender when it comes to the civil rights of America’s farmers and ranchers, and what steps USDA is taking internally to remedy its own chronic problems with discriminatory employees. Just how much more money are taxpayers going to be on the hook for? These additional funds cannot just be a slush fund that USDA uses as a form of political payback to reward its political cronies.”
Kimberly S. Hermann, SLF General Counsel, added, “courts have already told USDA that it cannot look at the color of a person’s skin and assume they are a victim of discrimination. SLF calls upon USDA to individually assess whether a person has been a victimized by discrimination. It cannot continue to perpetuate stereotypes under Section 22007.”
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