Federal judge to hear arguments about $380M left over from USDA discrimination settlement.
By Jonathan Ellis, Argus Leader
A federal judge Monday will hear opinions on what to do with $380 million left over from a settlement that was meant to reimburse Native Americans who were discriminated against by the U.S. Department of Agriculture.
District Judge Emmet Sullivan has received hundreds of comments, most of them from Native Americans who argue the money should be distributed in another round of payments — a move that the federal government opposes.
The money is left over from a 2011 settlement with the USDA. In 1999, a group of Native Americans sued the government, arguing that USDA discriminated against Native American farmers and ranchers who sought loans from the department. USDA paid $680 million and another $80 million in debt relief to settle Keepseagle v. Vilsack, a similar move the department made to settle other lawsuits brought by minority groups.
The settlement established a claims process for Native Americans who alleged discrimination, and it included a provision that any leftover money would be distributed to nonprofit groups that help Native American farmers and ranchers.
At the time, the parties figured about $1 million would be left over once the claims were processed, said Joseph Sellers, the class counsel. But in the end, there were only about 3,600 successful claimants — far fewer than originally estimated.
“We realized we were going to have a lot more money left over,” Sellers said.
Some of the claimants who received payments wanted another round of disbursements. But the federal government opposed another round of payments because officials did not want Native American farmers and ranchers to receive more money than what blacks, Hispanics and other minorities received in their settlements, Sellers said.
Gwen Sparks, a USDA spokeswoman, declined to comment.
After negotiations, the government agreed to allow the remaining money to be put into a trust. If approved, 10 percent would be distributed to nonprofits by an advisory board, and the remaining 90 percent would be distributed during the next 20 years by a foundation to nonprofits that help Indian ranchers and farmers.
Absent the agreement, the federal government could have demanded that the remaining money be returned, Sellers said.
But the agreement is deeply unpopular with many of the Native Americans who received payments. They argue that, as victims of discrimination, they should receive the leftover money.
In a motion filed last month, Marilyn Keepseagle, one of the original class litigants, said that the victims of discrimination were Native American farmers and ranchers, not the charitable organizations that would get the money. Keepseagle proposed that the money either be paid out to the 3,600 successful claimants, or that another claims period be opened for Native Americans who did not file a claim the first time.
“The ends of justice demand that this money should be distributed to the class members instead of providing a historic and unwarranted payout for charitable organizations,” Keepseagle said in her motion.
Marshall Matz, a lawyer representing Keepseagle and other Native Americans who want another disbursement, said a legal question persists regarding who owns the leftover $380 million.
“It’s a fascinating legal question,” he said.
Matz predicted that whatever happens, an appeal is likely.
“I don’t know why you would need a foundation — to create a foundation — to do unspecified good things when you can give the money to the people who can prove they were damaged,” Matz said.