“Anytime you are going to throw money up in the air,” says Abraham Carpenter Jr., a farmer in Grady, Arkansas, “you are going to have people acting crazy.” Although “throwing money up in the air” is increasingly one of the main functions of the federal government, Mr. Carpenter is referring to a specific case in which the Agriculture Department “opened the floodgates to fraud.”
The compensation effort sprang from a desire to redress what the government and a federal judge agreed was a painful legacy of bias against African-Americans by the Agriculture Department. But an examination by The New York Times shows that it became a runaway train, driven by racial politics, pressure from influential members of Congress and law firms that stand to gain more than $130 million in fees. In the past five years, it has grown to encompass a second group of African-Americans as well as Hispanic, female and Native American farmers. In all, more than 90,000 people have filed claims. The total cost could top $4.4 billion.
From the start, the claims process prompted allegations of widespread fraud and criticism that its very design encouraged people to lie: because relatively few records remained to verify accusations, claimants were not required to present documentary evidence that they had been unfairly treated or had even tried to farm. Agriculture Department reviewers found reams of suspicious claims, from nursery-school-age children and pockets of urban dwellers, sometimes in the same handwriting with nearly identical accounts of discrimination.
Yet those concerns were played down as the compensation effort grew. Though the government has started requiring more evidence to support some claims, even now people who say they were unfairly denied loans can collect up to $50,000 with little documentation.