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The New York Times: Politics Played a Big Role in Keepseagle

The New York Times says politics were key in the 2011 Keepseagle settlement, but lawyers for Indians in the case says the paper is wrong.

The most respected newspaper in the country has pointed out the sour political undercurrent in the 2011 Keepseagle settlement that awarded $760 million to Native American farmers for discriminatory practices they faced. But lawyers for those Indians say TheNew York Times is wrong. (Related Story: Indian Farmers Granted $760 Million from USDA)

The Times report by Sharon LaFraniere, published April 25, digs into several high-profile U.S. Department of Agriculture settlements with minority farmers during the Obama administration. The paper reports that had the Keepseagle case been brought to trial, the farmers would have been awarded much less. It also points out that only $300 million of the funds have been claimed, and not many more claims are likely. The remaining $460 million is held by the Cohen Milstein Sellers & Toll law firm, which received $60.8 million in legal fees under the agreement with the Department of Justice. Under the terms, the firm is to “administer” the remaining money to non-profit groups that benefit Native American farmers. “Two and a half years later, the groups have yet to be chosen,” the Times reports. “It is unclear how many even exist.” And the law firm told the paper it isn’t giving the money back unless ordered to do so by a judge. (Related story: Drought Speeds Up Keepseagle Payments)

A majority of these minority farmer settlements, including Keepseagle, were flawed in many ways. The intriguing question is: Why were the payments so high? The Times says the reason is clear in the Pigford case, which dealt with African-American farmers: “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.” Gordon C. Rausser, a professor of economics and statistics at the University of California and a government expert witness in that case, told the Times Native American farmers had generally fared as well as white male farmers, and he was “astounded” when the government chose to settle. “If they had gone to trial, the government would have prevailed. I was so disgusted [by the Keepseagle settlement]. It was simply buying the support of the Native Americans.” Rausser and others believe this was some political payback that wasn’t necessarily best for the government or for Native Americans. This camp argues that the settlement could have been crafted to give those who were truly discriminated against a larger slice of the financial award.

Cohen Milstein Sellers & Toll, not surprisingly, does not like the Times story. “It was always a risk that this would be seen as politically motivated—we knew that reality all too well,” says Joe Sellers, the lawyer with the firm who oversaw its Keepseagle affairs. “Achieving justice was always our motivation.”

The firm has asked for a correction, but the Grey Lady says there is nothing to correct, so the lawyers issued a background paper, offering a clarification and claiming that the firm was fighting the good fight. “Those involved in the Keepseagle case fought for over a decade for justice for Native American farmers and ranchers,” it says. “We are extremely proud of a settlement that provides fair compensation for Native American farmers, $80 million in debt forgiveness, and changes the way that USDA will do business with Native Americans in the future… [I]t is an affront to the Native American community for the NY Times to suggest that discrimination did not really exist, that our case was weak, and that the damages were not justified. It is an affront to the Native American community for the NY Times to suggest that this settlement was a handout or an attempt to buy off the Native American community, and other minority groups.”

The firm also says the article should have reported on the proposed reforms to the USDA’s farm loan program mandated by the settlement agreement. “[Our settlement] created a new federal advisory committee, the Native American Farming and Ranching Council, to work on reforming the USDA for Native American farmers and ranchers,” the backgrounder states. “It created new training opportunities for farmers and ranchers and required USDA to publish a plain English guide to the Farm Loan Program. It requires USDA to collect data on the portion of Native American farmers and ranchers who receive farm loans compared to white farmers. It required the USDA to work with Class Counsel to identify reforms to USDA’s regulations and operating procedures.”

Regarding the huge chunk of money to be awarded by the firm to non-profits, it says: “Because all checks have not been cashed by class members, at this time we cannot recommend to the Court how to distribute the leftover funds. However, we have given a huge amount of thought to this issue, and have been having a dialogue with the Justice Department about the best way to distribute the leftover funds so that it will have the biggest and most effective impact on Indian country. By this summer, we should be in a position to make a recommendation to the Court about how the leftover funds should be distributed.” Besides the power this arrangement presents, they do not appear to benefit from holding the money, but they have received scrutiny over the fact that their fee payment would have been much lower had they come closer to estimating the real amount of claims that Natives would present.

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“[The Times] got Keepseagle wrong,” Sellers says. He says the agreement on leftover monies and the firm’s administration of them was developed with the Obama administration, but he admits that he has since been in discussions with the Department of Justice about possibly changing the award process. “I stand by the agreement, but nobody expected that the amounts remaining would be as substantial as they are.”

Some Indians who could benefit from awards through the firm are also angry at the Times. In the piece, Ross Racine, director of the Intertribal Agricultural Council, is quoted as saying, “Everybody is looking at this money on the table and saying, ‘Give me some because I am a good guy.’” His organization, the article states, is perhaps the biggest eligible group.

“That article just adds to my long standing mistrust of news reporters!” Racine said by e-mail. “I don’t think it is a true representation of facts surrounding Pigford or Keepseagle.” He wouldn’t say what he believes the specific misrepresentations were, and he wouldn’t say if he is concerned that the agreement could be changed in a way that could award his organization less than he believes it deserves.

A contributing factor for the heat Sellers’ firm is feeling is that politics may have played a role in the Cobell settlement, the $3.4 billion trust settlement the Obama administration offered Native American litigants in 2009. It has been reported by this publication and others that one of the lawyers for the Indian plaintiffs in that case, Keith Harper, worked for the Obama administration transition team, received a presidential nomination in 2011 to serve as a member of the President’s Commission on White House Fellowships, and raised at least $500,000 for the Obama re-election campaign in 2012 as an official bundler. Harper’s dual role of representing Indian clients while negotiating with an administration he is close to led to questions from appellants of the settlement as to whether he negotiated a deal with the administration that was good for his law firm, but may not have been the best one for individual Indian beneficiaries—most plaintiffs are receiving less than $2,000 under the settlement, while the lawyers are still squabbling in court for their share of the $99.9 million legal fees that were awarded. Recent reports indicate that the Cobell settlement fueled a 36.5 percent increase in profits for partners at Kilpatrick Townsend & Stockton last year, bringing revenue per equity partner to $860,000. Harper is a partner with the firm and chair of its Native American Practice Group.

“The perception that Cobell was flawed seems to be hurting us,” Sellers says. “But our settlement was funded in a totally different matter—not having to go through congressional approval—so the situation was different. Ours was distinctive in the way it was funded and way it was resolved. It is frustrating to get lumped into the Cobell politics.”

Sellers is also annoyed that the Times lumped Keepseagle in with the other minority USDA settlements that focused on African Americans, Hispanics and women. “Maybe there were problems with those cases, but they were not the same as ours,” he says. “Ours was the only one that went through complete discovery of all these cases—we were ready to go to trial.”

Ironically, some conservative websites that traditionally don’t pay much attention to Indian issues are trumpeting The New York Times report, with headlines like, “Andrew Was Right”—a reference to Andrew Breitbart, a well-known and notoriously combative conservative blogger who died in 2012. He claimed settlements like Pigford I and Pigford II, which both dealt with USDA discrimination toward black farmers, were really payoffs from Democratic administrations to loyal constituents. Sellers concedes that when conservative bloggers and the mainstream media’s biggest player come to a similar conclusion, his firm has a massive perception problem. Despite that, he insists Keepseagle was not a political payoff.

“We worked hard for justice, we have followed the settlement agreement, and we are acting in accordance with it,” he says. “I stand by it.”