Holder Celebrates Strong Arming 3,000 Bankers For Imaginary Racism

This from IBD:

In an end-of-year press release — posted under the banner headline "Accomplishments Under the Leadership of Attorney General Eric Holder" — the Justice Department boasts of charging "nearly 3,000" bankers with lending discrimination and fraud.

This could not be more screwed. One, the way the DOJ is "proving" discrimination is by nothing more than a statistical analysis under a disparate impact theory - the same theory the Supreme Court held unconstitutional in the employment context in the 2009 Ricci decision. Under a disparate impact theory, if statistics show that blacks are being denied loans at a greater rate or at less favorable rates than whites at any particular bank, then that is legally deemed "proof" of racism. The DOJ needn't show even a single case of actual racism. The burden then shifts to the Defendant to prove it made legitimate, color blind decisions in each case - with potential litigation costs being astronomical.

The DOJ uses this scam to strong arm lenders, then directs a substantial portion of all multi-million dollar settlements to fund left wing activist organizations. This was the ACORN model in the Clinton years. Unfortunately, lenders almost uniformly fold when faced with the litigation costs of trying to defend these bogus law suits. This is something that cries out for a hearing before the Supreme Court.

More from IBD;

. . . none of the race-bias cases highlighted by the administration was litigated in court. Evidence was never presented or tested, nor guilt ever proven. What's more, no incident of discrimination was ever specified, and no individual complainants or victims of discrimination were ever identified.

All the major defendants — Bank of America, Wells Fargo and SunTrust Mortgage — settled while strongly denying Holder's allegations that they charged blacks and Latinos a "racial surcharge" for mortgages simply because of the color of their skin. In court documents, they argued that if Holder's civil-rights prosecutors conducted an "appropriate analysis" of their loan data and loan-file documentation, it would have shown no disparate impact in product placement against African-Americans or Hispanics. They argued that any differences in loan pricing were attributable to legitimate, nondiscriminatory factors, such as poor credit.

When one defendant recently fought back in court, the administration admitted in a little-noticed court filing that, indeed, it had not considered all the credit factors that went into the lender's decisions to charge higher rates for loans to minorities whose credit history left them unqualified for prime loans.

GFI Mortgage Bankers Inc. last summer asked a federal judge to dismiss a lending discrimination complaint filed by Holder. The New York-based lender argued that the government failed to establish a link between its policies and lending disparities outlined in the suit.

When Justice opposed GFI's motion, it revealed a serious flaw in its "statistical regression analyses" used in almost every race-bias case filed against lenders under this administration.

It acknowledged that its models do not account for all factors related to borrowers' credit risk and loan characteristics — factors that could explain disparities in loan pricing by race.

In the court filing, Justice Department official Thomas Perez, chief of the civil-rights division, said the sum total of the government's proof was "statistical evidence" that did not include all elements of creditworthiness. But he argued that the government did not need to control "all measurable variables" to prove discrimination, that it "need not prove discrimination with scientific certainty."

In other words, Holders' diversity police relied on incomplete statistics as evidence to prove intentional discrimination. They failed to compare apples to apples. There could have been legitimate business reasons for what they construed from the limited data as racism. Yet they didn't bother to look further.

GFI's attorney Andrew Sandler complained that Justice has been using an overly broad and "now discredited interpretation" of civil-rights law known as "disparate impact." But GFI happened to draw an Obama-appointed judge to hear its motion to dismiss what looked to be groundless charges against it.

With that judicial leaning in mind, GFI agreed to settle the case. It will fork over more than $3.5 million to as-yet unidentified black and Latino victims of alleged mortgage discrimination and also "qualified organization(s) that provide programs targeted at African-Americans and Hispanic potential and former homeowners."

It also agrees to implement over the next 4-1/2 years a "fair lending monitoring program" to make management and its employees more sensitive to the "credit needs" of the minority community.

Only in the race-obsessed Obama administration is a racist "witch hunt" worthy of celebration.

But it gets far worse. Of vastly greater importance, this type of litigation under the Community Reinvestment Act was the "but for" cause of our financial collapse in 2008. It eviscerated bank lending standards As I summarized in a long, 2008 post identifying the causes of our financial collapse:

During the period 1977-2000, most of the elements of our current fiscal crisis were put in place. President Clinton turned a little known law from the Carter-era, the Community Reinvestment Act, into a tool of massive socialist engineering. Color-blind lending standards were eviscerated and new standards were enforced by the police powers of the government and through the enlistment of community organizers and their ilk. Fannie Mae and Freddie Mac were made the engines of the new social engineering, creating an ever-expanding market for mortgages founded upon the new "innovative" lending standards. [And indeed, under the new lending standards, subprime loans were bundled as AAA investments and sold throughout the world financial markets.] All attempts by Republicans to attack this cancer failed. The left deliegitimized and beat back every attempt to reform the CRA by recasting such efforts as racist.

And here we sit today, with the same "race based" cancer still being spread through our financial system. It has been a gross distortion of reality that the left was able to sell the massive lie that the meltdown was caused by the "failed policies" of the Bush administration, coupled with vague references to "Wall St. greed" and "deregulation." They rarely, if ever, get any more specific in their charges than that.

It should also be noted that a lot of what went on in the lead up to our financial meltdown was pure old fashioned fraud. As I wrote in a recent post:

The economic meltdown from the housing bubble should have led to a whole host of criminal prosecutions for fraud. When sub-prime loans were being bundled and resold with a AAA rating, that was not within the realm of reasonable opinion, that was criminal. When Goldman Sachs marketed four sets of complex mortgage securities to banks and other investors without warning of the high risk, or when they "secretly bet against the investors' positions and deceived the investors about its own positions to shift risk from its balance sheet to theirs," that is fraud. Yet the Obama DOJ refused to prosecute Goldman Sachs or anyone else.

As near as I can tell, no one from the economic melt-down of 2007 has been criminally prosecuted by Obama - and its not hard to understand why. That melt-down was caused by Democrat policies over a period of two decades - ones fought by Bush, McCain and most other Republicans. To prosecute anyone for the crimes that occurred in the creation of the melt-down would shine a bright light on the facts - as well as the utter canard that the melt-down was caused by Republican economic policies or de-regulation.

Strong arming 3,000 bankers with false charges of racism is not something Holder and the left should be celebrating with press releases. It should be something they contemplate while trying to scrape the tar and feathers off their bodies.

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From Our Pockets To Far Left Activist Groups - Democrat Corruption At Work

That stench of corruption you smell is most likely the odor emanating from Obama Administration and Attorney General Eric Holder's Office. At least a portion of what you are smelling is how the Democrats are funneling tax dollars and bank fines to far left community activist organizations - for these organization to then in turn use in support of Democrats. It is as corrupt a practice as you will find in any banana republic.

It works like this. Democrats pass a law, take Dodd Frank for example, which could also reasonably be called the ACORN Full Employment Act. In it, the Democrats specify that a portion of our tax dollars are to be used to fund local organizations, ostensibly to conduct education and counseling of minorities or the elderly on financial matters. The government than enters into a multi-year contract with one of the many far left activist organizations for millions of dollars. A variety of far left organizations wholly survive on our tax dollars through this scam, the most infamous being, until their recent dissolution, ACORN.  It is completely legal.  It is utterly corrupt.  And because of contractual obligations, the Democrats are able to keep this scam going even during periods of Republican control of Congress.

But that is not the only method by which Democrats funnel millions in funds to partisan left wing groups. A variant on the above theme is for the Justice Department to direct that banks owing fines for "race discrimination" have to pay a portion of the fines directly to whatever private radical left organization the Justice Department directs. This too is ostensibly justified on the grounds of educating minorities.  The difference here, as the IBD article below makes clear, is that the left are on far shakier legal grounds when going this route.

Just as an aside, these shakedowns of banks for "racism" in lending practices are precisely what led to our economic meltdown in 2008 by destroying credit standards. Invariably in these cases, no single act of racial discrimination is ever proven to have occurred. Rather a bank is held liable if its lending practices show a disparate impact on minorities. That means that statistically, a bank did not make enough loans to minorities - irrespective of how colorblind the bank's lending standards are, irrespective of its outreach to minorities, and indeed, irrespective of whether it statistically rejected more applications from whites than minorities. It is a travesty. This use of disparate impact theory was held, for all intents and purposes, unlawful by the Supreme Court in the employment context in the pivotal 2010 Ricci v. Destafano case. It should be unlawful in all contexts. There is no place for racism in our society, but the disparate impact theory doesn't punish racism, it punishes institutions for results wholly irrespective of actual racism and thus it deeply distorts our economy.

At any rate, back to the topic at hand. It is the Justice Department funneling fines to left wing organizations that is rearing its ugly head today. This from IBD:

Last week, House Judiciary Committee Chairman Lamar Smith fired off a three-page letter to Attorney General Eric Holder warning that his recent punishment of Bank of America's mortgage unit seemed political. In fact, he may have abused his power.

As IBD first reported Jan. 4, 'BofA Must Pay Excess Settlement Funds To Acorn Clones," the $335 million lending-bias deal requires BofA to fork over a chunk of the payout to leftist groups not connected to the suit.

The unusual term is part of a secret Justice program to redistribute millions in settlement cash to third parties instead of alleged victims.

Critics told IBD it's a "political backdoor" to subsidize Democrat-tied bank shakedown groups. . . .

Under the order, excess funds will be handed to groups that "provide education, counseling and other assistance to low-income and minority borrowers."

The corrupt group, [ACORN,] which has re-emerged under other names after coming under investigation in 2009, continues to receive federal funds. Acorn Housing Corp. got some $700,000 in federal money after changing its name to Affordable Housing Centers of America.

Last year, Holder also ordered two AIG-owned banks to pay a minimum of $1 million to "qualified organizations" that help "African-American borrowers."

More recently, he ordered C&F Mortgage Corp. of Virginia to reward such groups. As of 2010, some $7.6 million was waiting to be handed out from his unsupervised grant program. Recipients aren't restricted in how they use the money. In 2008, Acorn bankrolled get-out-the-vote operations for Obama.

Justice would not provide a complete list of approved nonprofits, but a spokeswoman told IBD the National Urban League and Operation Hope are eligible for cash from the AIG case. Urban League has lobbied to water down credit standards. Operation Hope founder John Bryant serves on Obama's financial advisory council.

Smith demands that Holder furnish a full list of "qualified organizations," along with an audit of payments. Hearings are in order if his response is unsatisfactory.

Hats off to IBD for following up on this like a dog with a bone and getting the Republicans in congress to finally move off their posteriors.  Nothing that I am aware of authorizes the Justice Department to direct that fines otherwise payable to the government be directed to non-party organizations.

I am waiting for the day when a financial institution finally appeals the use of disparate impact theory in lending to the Supreme Court. This is social engineering at its worst, it was the "but for" cause of the 2008 economic crash and our continuing economic woes, and yet the Obama administration and the Holder Justice Department are pushing it harder than ever before. It is setting us on a second course for disaster.

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An ACORN In The White House: Obama Putting Social Engineering Back Into The Economy

Those who cannot learn from history are doomed to repeat it.

- - Edmund Burke

Can you say SUBPRIME CRISIS - THE SEQUEL. On Christmas Eve, Team Obama announced that it was uncapping government guarantees for Fannie Mae and Freddie Mac, giving those institutions a blank check with our tax dollars and seemingly preparing the way for these institutions to again play major roles in driving our housing market. Now, our "post-racial" President is about to reinject race-based social engineering into the front and center of our financial system. This coming just a year and a half after the precise same practice, coupled with the government directed machinations of Fannie and Freddie, brought our economy to its knees. I've spent tons of pixels on this blog discussing the origins of our financial meltdown. The exceptional video below explains some of the basics in 3 minutes.



(H/T Hot Air)

Democrats' social engineering is the "but for" cause of our financial meltdown. As I have written previously, in summing up a very detailed post:

During the period 1977-2000, most of the elements of our current fiscal crisis were put in place. President Clinton turned a little known law from the Carter-era, the Community Reinvestment Act, into a tool of massive socialist engineering. Color-blind lending standards were eviscerated and new standards were enforced by the police powers of the government and through the enlistment of community organizers and their ilk. Fannie Mae and Freddie Mac were made the engines of the new social engineering, creating an ever-expanding market for mortgages founded upon the new "innovative" lending standards. All attempts by Republicans to attack this cancer failed. The left delegitimized and beat back every attempt to reform the CRA by recasting such efforts as racist.

As to [contributing factors, possibly] the most important but as of yet underreported aspect of the crisis, is how rating agencies of the era vastly underrated the risk of the toxic mortgage backed securities coming out of Fannie Mae. The repeal of Glass-Steagall actually strengthened some of the [defenses]. Credit Default Swaps, which developed unregulated during the Clinton era . . . [were] unable to withstand the widescale failure of the underlying mortgages, [particularly after the recent imposition of mark to market accounting rules.]

. . . [The] goal of "affordable housing" was laudable. Looking at this in retrospect, there were and are two ways to approach this issue - one from a capitalist and market based approach and one from a socialist and redistributionist approach. The former would have been a series of programs to repair credit and to assist individuals with amassing savings for a down payment. The latter, well, that was what the left was able to enact.

Yet today, Democrats are in the midst of trying to wipe not merely their responsibility for our financial meltdown from the historical record, but to claim that the fault lies completely with deregulation and derivatives. This is not merely an exercise in assigning blame, for what our graduate of Acorn in the White House wants to do is double down on the social engineering. This from the NY Times:

The Justice Department is beginning a major campaign against banks and mortgage brokers suspected of discriminating against minority applicants in lending, opening a new front in the Obama administration’s response to the foreclosure crisis.

Tom Perez, the assistant attorney general for the department’s Civil Rights Division, is expected to announce Thursday in New York that the administration is creating a new unit that will focus exclusively on unfair lending practices.

“We are looking at any and every practice in the industry,” Mr. Perez said in a recent interview.

As part of an expansion of the Civil Rights Division approved by Congress last year, the Justice Department is hiring at least four lawyers and an economist for the new unit, while about half a dozen current staff members will transfer into it.

Mr. Perez plans to formally announce the new unit at the “Wall Street Project” conference organized by the Rev. Jesse Jackson’s Rainbow/PUSH Coalition. He characterized the effort as a major turnaround, and criticized the previous administration as failing to scrutinize lending practices amid the subprime mortgage boom.

While past lending discrimination cases primarily focused on “redlining” — a bank’s refusal to lend to qualified borrowers in minority areas — the new push will instead center on a more recent phenomenon critics have called “reverse redlining.”

In reverse redlining, a mortgage brokerage or bank systematically singles out minority neighborhoods for loans with inferior terms like high up-front fees, high interest rates and lax underwriting practices. Because the original lender would typically resell such a loan after collecting its fees, it did not care about the risk of foreclosure.

It is a rarely used theory, and it carries political risks. Some critics have contended that government rules pushing banks to lend to minority and low-income borrowers contributed to the financial meltdown. The campaign could rekindle that debate.

“They encourage lenders to make risky loans for reasons such as diversity, and then when lenders have a problem because they made too many risky loans, they condemn them for that,” said Ernest Istook, a fellow at the conservative Heritage Foundation and a former Republican congressman from Oklahoma. . . .

Under federal civil rights laws, a lending practice is illegal if it has a disparate impact on minority borrowers, and the Obama administration is signaling that it intends to make the enforcing of fair lending laws a signature policy push in 2010. . . .

Neither racism nor reverse racism have any place in America. Actual cases of improper discrimination need to be dealt with by an iron fist. But the disparate impact theory, that is a different beast entirely. What it means is that, even if a bank can show that every lending decision it made was based on commercially reasonable, colorblind lending standards and that its decisions were made without any reference to the race of the applicant, the bank can still be fined and subject to other penalties if, statistically, it did not make enough loans to low income individuals or in low income areas. This is the same legal theory that the Supreme Court all but completely struck down in Ricci v. Destefano several months ago. That case dealt with limitations on the disparate impact theory in employment decisions. Disparate impact is also the same legal theory that our government relied on to cause the subprime crisis in the first place. In light of Ricci, this is something that cries out for a court challenge on Constitutional grounds.

This is merely Obama's latest existential attack on an economy already gravely ill and with no signs of recovery in sight. It falls perfectly in line with his attempts to socially engineer our economy through health care and cap and trade. But as bad as the latter two portend to be, we know beyond doubt just how much damage the former has already caused. Moreover, Obama is simply too much the ideologue to learn the lessons of history. 2012 just can't come soon enough. In the meantime, it would seem the best way to combat this latest assault lays with our courts and with our elected representatives.

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Gates & The Politics of Race

The Gates/Obama incident has been played and replayed many times over the past few days. A woman sees two men - one possibly Hispanic, the other of unknown ethnicity - trying to force in the back door of a residence that had been burglarized a week earlier. Police respond to a call of possible burglary in progress. By all accounts it is standard procedure when responding to such calls to ask any person who answers the door to step outside. If there is an invader in the home, this allows the police to secure the individual who answered the door, to remove them from any coercive threat, and insure they are not in harms way while the matter is resolved. Prof. Gates, a Professor of African American Studies at Harvard, immediately turned the incident into one of race. He was beligerent with the police from the outset, he refused their lawful order to step outside, and he told the police that they would not "do this to a white person." He was arrested for disorderly conduct.

Not a single individual of any ethnicity in the police dept. invovled has spoken out against the arresting officer or in support of Prof. Gates. To the contrary, they have been uniform in their support of the arresting officer's actions. But then there was President Obama who, at a press conference, pronounced the arrest of Prof. Gates "stupid," giving the implication that this was a racist act by the arresting officer. The result was a furor that had Obama back peddaling within days.

This is not a big incident. But I find it fascinating for what it tells us about the nation. I think it says several things:

- Our nation has progressed far towards the colorblind ideal since the dark days of Martin Luther King, Jr. and Bull Conor.

- There was a time when playing the race card would be mean automatic free pass for the player of the card. White liberal guilt and intense pressure from the left combined to make playing the race card a sure winner. The Gates incident tells us that is no longer automatically true.

- The last step on the road to a truly post-racial America will be a dismanteling of affirmative action in all its aspects, creating a truly level playing field with actual acts of racism and reverse racism punished under the law. The highly publicized Ricci case focused attention on this in a way that had not occurred previously. If the polls in the wake of Ricci are any indication, that is the goal of most Americans.

- People expected Obama to be true to his word of promising to build a post racial America. Indeed, the symbolism of his Presidency, that it marks the triumph in America of equality over racism, will be the defining and most precious legacy of Obama's election. That is no doubt the reason why, when Obama took take sides in a "racial incident," it shocked much of the electorate who had taken him at his word.

Given the above, while the Gates incident itself is not of great significance, it foreshadows what may be one of the great ironies of the Obama presidency. His election, which marks the high water mark of identity politics, may also sound its death knell. Whether Obama actually meant to heal the "racial divide," his election may takes us the last few "longest yards" in spite of the substance of Obama and his Presidency. If America can collectively vote a black man as President, then objectively there is no longer a gaping racial divide. And with that, collective white guilt may well no longer be the prime driver in the politics of race. When that happens, perhaps the ideal of Martin Luther King Jr. will finally come to fruition. The writing is on the wall, it is only a matter of time.

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The Racism Of The Left

Racisim is alive and well in America. It is appropiate that the only living one time member of the KKK in Congress today is a Democrat. As I have written in detail here, racism is and has historically been a prime driver of the left. And nowhere is it on display today more than in the NYT editorial on the Ricci case.

The Ricci case, which I posted on extensively here, involved several New Haven, Conn. white and Hispanic firefighters who earned the right to be promoted after passing a test meticulously designed to be race neutral and to test only those areas most applicable to the positions of fire dept. captains and lieutenants. The City threw out the results because no blacks had earned a promotion.

The full facts of how the city of New Haven came to toss out the results is a story of vile race baiting and reverse racism. You have to read Justice Alito's concurrence to get the full facts. You can find those facts here.

The two New Haven Fire Dept. Chiefs, one of whom is black, saw nothing unfair in the test. Both were of the opinion that the test results should have been certified and the promotions granted. None of the many black and Hispanic senior Fire Dept. personnel from outside of New Haven who administered the oral portion of the exam thought that it was discriminatory in any way. And then there was Vincent Lewis:

Vincent Lewis, a fire program specialist for the Department of Homeland Security and a retired fire captain from Michigan. Lewis, who is black, had looked “extensively” at the lieutenant exam and “alittle less extensively” at the captain exam. He stated that the candidates “should know that material.”

The person who most vociferously argued against certifying the results was Rev. Boise Kimber. As Alito makes apparent, Rev. Kimber, a close associate of New Haven's left-wing Mayor, is a clone of Rev. Jerimaih Wright. And now, the NYT joins in the call. What all of these people have in common is that they are children of identity politics that would make permanent victims of minorities.

The penultimate holding of the Supreme Court is that racisim, whether traditional or reverse, is still racism made unlawful under Title VII (they never reached the Equal Protection Clause of the Constitution.) Moreover, while the Court applauded the efforts of New Haven to create a racially neutral hiring procedure that would not favor whites, to go beyond that, to disregard merit and gerrymander the results to achieve a specific racial mix is unlawful racism.

But that is not how the NYT sees it. While the purpose of the NYT editorial is to provide cover for the nomination of Judge Sotomayor, the authors nonetheless give us their opinion of the Ricci case. According to the NYT, "[o]n Monday, the Supreme Court dealt a blow to diversity in the American workplace." The NYT ignores all of the facts covered above and concludes that throwing out the test did not result in an act of discrimination. The gist of the NYT authors is that a racially balanced result trumps merit. You can read it here.

Not only does such an attitude explicitly condone reverse racisim, but it is deeply racist itself. Implicit in their position is the proposition that blacks are incapable of competing on a level playing field with whites. If that is not the very definition of racism, I don't know what is.

Obama promised us an America where the racial divide is healed. The truth is that this type of racisit identity politics is the far left's raison d' etre. They have no intention of giving it up.

On a different note, the NYT today also has an insightful article on the Supreme Court, making the argument that Chief Justice Roberts is incrementally and methodically inching the Court to the right. Unlike the editorial referenced above, this news analysis piece is a worthwhile read for Supreme Court watchers.

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Ricci - The Rest Of The Story

The Supreme Court, in deciding the case of Ricci v. Destefano yesterday, held that, while employers have a duty to make their hiring criteria racially neutral, once they have done that, they can't use race as a basis to disregard merit. This decision . . .

. . . should significantly impact those class of claims where no actual racism is shown but claims of racisim are made on the basis of statistics;

. . . will make it harder for plaintiffs to prevail in "disparate impact" claims and should significantly curb the practice of employers caving to the demands of race baiters;

. . . may well have an important effect in areas outside of employer-employee law where such statistical evaluations of race are used, such as in college admissions and, of critical importance, under the Community Reinvestment Act;

. . . marks a step towards answering whether and to what extent affirmative action is Constitutional under the Equal Protection Clause.

. . . looks bad for Sotomayor but will not by itself derail her nomination.

. . . the little publicized facts of Ricci are that vile race baiting and blatant reverse discrimination were the driving forces behind the City's decision to throw out the test results in that case. The claim of potential liability for disparate impact was a pretext.

************************************************************

The Ricci case was brought by some white and Hispanic firefighters from New Haven, Connecticut under Title VII and the Equal Protection Clause. The firefighters had passed a promotion test that the City refused to certify because no blacks had scored high enough to also be promoted.

The penultimate issue is whether using race as a discrimating factor is constitutional under the Equal Protection Clause. The Supreme Court did not reach that issue, limiting its holding to Title VII law. But as Justice Scalia noted, the case marks a step towards "the evil day" when the Court will have to answer that question.

Title VII allows two ways to prove discrimination. One is actual discrimination against a specific individual. In the legalese of Title VII, that is called "disparate treatment."

The second way is to prove discrimination under Title VII is statistically. If the overall process of hiring and promoting results in minorities being underrepresented, then it raises what is called a "disparate impact" claim. Once a plaintiff statistically shows a disparate impacat, then the employer has to show that the criteria it used was racially neutral and business related. If the employer can show this, then the plaintiff can only prevail if he or she shows that there was an equally viable test or criteria that would not have resulted in the disparate impact.

On the facts of Ricci, it was clear that New Haven took great care to insure that the hiring process would be racially neutral and carefully tailored to question on the most important topics relating to fire fighting duties. The people that were hired to design the test came to New Haven, engaged in extensive interviews and ride alongs, and when they developed the questions, they oversampled minorities to insure that the questions would not inadvertently favor whites. As to the boards for the oral exams, the people that sat on the boards were fire dept. senior personel from outside New Haven, two thirds of whom were minorities.

In short, the City had adopted a hiring criteria that resulted in situation where a minority plaintiff could bring suit and prove a prima facie case of disparate impact because no minorities scored high enough to be promoted. However, to toss the test based simply on this fact would be an unlawful act of racism / "disparate treatment" against those people who passed the test. And that was precisely what the Supreme Court said an employer cannot do. An employer can now only lawfully throw out tests and start over if they can show "a strong basis in evidence that the test was deficient . . ."

The general consensus is that this will make it harder to prove "disparate impact" claims. Further, it should significantly curb the practice of employers caving to the demands of race baiters when they have acted reasonably and without discriminatory intent - which actually is what went on Ricci. I cover those facts in detail at the end of this post.

The decision should also impact outside of employer-employee arena, in areas such as college admissions. Additionally, it might well have an impact on banks and mortgage lenders under the Community Reinvestment Act - that piece of ill advised legislation at the very center of our economic meltdown. The CRA now includes provisions that use statistical analysis to punish banks who have not made "sufficient" loans to minorities, irrespective of whether neutral lending criteria was followed in each and every loan decision. Obama has proposed vastly expanding the CRA under his proposal for massive regulation of our financial sector. But I see no reason that the Ricci decision would not also apply in the banking context.

As to Justice Sotomayor, this Ed Whelan at NRO

Judge Sotomayor thought it appropriate to use an unpublished summary order to dispose of the claims of the New Haven firefighters in Ricci v. DeStefano. Today the Supreme Court issued 93 pages of opinions in the case that Sotomayor acted to bury.

Further, although there is a sharp 5-4 divide among the justices, not a single justice thought that Judge Sotomayor acted correctly in granting summary judgment for the City of New Haven.

All of that is true, but the bottom line is that this was a split decision and trying to make the fine point that there is a significant difference between Sotomayor's handling of the case and the position of the four dissenters will likely be lost in the spin.

Justice Ginsburg wrote a dissent in essence arguing for the good to be had from practicing reverse discrimination in the future to atone for original sins of our forebearers. Richard Epstein does a good job of fisking her stroll down memory lane.

On a final note, the facts of this case are far more objectionable than I have ever seen in the MSM stories covering it. The City threw out the test not simply out of fear of being sued disparate impact. Reverse racism played a predominant and ugly role. Justice Alito tells us the rest of the story in his concurring opinion.

This story is, I think, truly typical of the split in the African American community. You see on one side the majority of the african american community who take no substantial part in identity politics. On the other side are those for whom identity politics defines everything. Thus, in this case, the vast majority of African Americans who were involved in the hiring process thought it fair and that the results should be certified. Where you get the vile reverse racism is from a race baiting community organizer/Rev. Wright style preacher and a left wing Mayor who feeds the preacher in return for votes.

Here are the facts from Justic Alito's opinion minus the citations:

. . . “[A] jury could rationally infer that city officials worked behind the scenes to sabotage the promotional examinations because they knew that, were the exams certified, theMayor would incur the wrath of [Rev. Boise] Kimber and other influential leaders of New Haven’s African-American community.”

This admission finds ample support in the record. Reverend Boise Kimber . . . is a politically powerful New Haven pastor and a self-professed “‘kingmaker.’” On one occasion, “[i]n front of TV cameras, he threatened a race riot duringthe murder trial of the black man arrested for killing white Yalie Christian Prince. He continues to call whites racist if they question his actions.”

Reverend Kimber’s personal ties with seven-term New Haven Mayor John DeStefano (Mayor) stretch back more than a decade. In 1996, for example, Mayor DeStefano testified for Rev. Kimber as a character witness when Rev. Kimber — then the manager of a funeral home — was prosecuted and convicted for stealing prepaid funeral expenses from an elderly woman and then lying about the matter under oath. “Reverend Kimber has played a leadership role in all of Mayor DeStefano’s political campaigns, [and] is considered a valuable political supporter and vote-getter.” According to the Mayor’s former campaign manager (who is currently his executive assistant), Rev. Kimber is an invaluable political asset because “[h]e’s very good at organizing people and putting together field operations, as a result of his ties to labor, his prominence in the religious community and his long-standing commitment to roots.”

In 2002, the Mayor picked Rev. Kimber to serve as the Chairman of the New Haven Board of Fire Commissioners (BFC), “despite the fact that he had no experience in the profession, fire administration, [or] municipal management.” In that capacity, Rev. Kimber told fire fighters that certain new recruits would not be hired because “‘they just have too many vowels in their name[s].’” After protests about this comment, Rev. Kimber stepped down as chairman of the BFC, but he remained on the BFC and retained “a direct line to the mayor.”

Almost immediately after the test results were revealed in “early January” 2004, Rev. Kimber called the City’s Chief Administrative Officer, Karen Dubois-Walton, who “acts ‘on behalf of the Mayor.’” Dubois Walton and Rev. Kimber met privately in her office because he wanted “to express his opinion” about the test results and “to have some influence” over the City’s response. . . . Rev. Kimber adamantly opposed certification of the test results . . .

On January 12, 2004, Tina Burgett (the director of theCity’s Department of Human Resources) sent an e-mail toDubois-Walton to coordinate the City’s response to the test results. Burgett wanted to clarify that the City’s executive officials would meet “sans the Chief, and that once we had a better fix on the next steps we would meet with theMayor (possibly) and then the two Chiefs.” The “two Chiefs” are Fire Chief William Grant (who is white) and Assistant Fire Chief Ronald Dumas (who is African-American). Both chiefs believed that the test results should be certified.

Petitioners allege, and the record suggests, that the Mayor and his staff colluded “sans the Chief[s]” because “the defendants did not want Grant’s or Dumas’ views to be publicly known; accordingly both men were prevented by the Mayor and his staff from making any statements regarding the matter.” The next day, on January 13, 2004, Chad Legel, who had designed the tests, flew from Chicago to New Haven to meet with Dubois-Walton, Burgett, and Thomas Ude, the City’s corporate counsel. “Legel outlined the merits of the examination and why city officials should be confident in the validity of the results.” But according to Legel, Dubois-Walton was “argumentative”and apparently had already made up her mind that the tests were “‘discriminatory.’” Again according to Legel, “[a] theme” of the meeting was “the political and racial overtones of what was going on in the City.” “Legel came away from the January 13, 2004 meeting with the impression that defendants were already leaning toward discarding the examination results.”

On January 22, 2004, the Civil Service Board (CSB orBoard) convened its first public meeting. Almost immediately, Rev. Kimber began to exert political pressure on the CSB. He began a loud, minutes-long outburst that required the CSB Chairman to shout him down and hold him out of order three times. Reverend Kimber protested the public meeting, arguing that he and the other fire commissioners should first be allowed to meet with the CSB in private.

Four days after the CSB’s first meeting, Mayor DeStefano’s executive aide sent an e-mail to Dubois-Walton, Burgett, and Ude. The message clearly indicated that the Mayor had made up his mind to oppose certification of the test results but nevertheless wanted to conceal that fact from the public:

“I wanted to make sure we are all on the same pagefor this meeting tomorrow. . . . [L]et’s remember, that these folks are not against certification yet. So we can’t go in and tell them that is our position; we have to deliberate and arrive there as the fairest and most cogent outcome.”

On February 5, 2004, the CSB convened its second public meeting. Reverend Kimber again testified and threatened the CSB with political recriminations if they voted to certify the test results:

“I look at this [Board] tonight. I look at three whites
and one Hispanic and no blacks. . . . I would hope that you would not put yourself in this type of position, a political ramification that may come back upon you as
you sit on this [Board] and decide the future of a department and the future of those who are being promoted.

One of the CSB members “t[ook] great offense” because he believed that Rev. Kimber “consider[ed] [him] a bigot because [his] face is white.” The offended CSB member eventually voted not to certify the test results.

One of Rev. Kimber’s “friends and allies,” Lieutenant Gary Tinney, also exacerbated racial tensions before the CSB. After some firefighters applauded in support of certifying the test results, “Lt. Tinney exclaimed, ‘Listen to the Klansmen behind us.’” Id., at 225a. Tinney also has strong ties to the Mayor’s office. After learning that he had not scored well enough on the captain’s exam to earn a promotion, Tinney called Dubois-Walton and arranged a meeting in her office. Tinney alleged that the white firefighters had cheated on their exams — an accusation that Dubois-Walton conveyed to the Board without first conducting an investigation into its veracity. The allegation turned out to be baseless.

Dubois-Walton never retracted the cheating allegation, but she and other executive officials testified several times before the CSB. In accordance with directions from the Mayor’s office to make the CSB meetings appear deliberative, executive officials remained publicly uncommitted about certification — while simultaneously “work[ing] as a team” behind closed doors with the secretary of the CSB to devise a political message that would convince the CSB to vote against certification. At the public CSB meeting on March 11, 2004, for example, Corporation Counsel Ude bristled at one board member’s suggestion that City officials were recommending against certifying the test results. . . . But within days of making that public statement, Ude privately told other members of the Mayor’s team “the ONLY way we get to adecision not to certify is” to focus on something other than “a big discussion re: adverse impact” law.

As part of its effort to deflect attention from the specifics of the test, the City relied heavily on the testimony of Dr.Christopher Hornick, who is one of Chad Legel’s competitors in the test-development business. Hornick never “stud[ied] the test [that Legel developed] at length or in detail,” but Hornick did review and rely upon literature sent to him by Burgett to criticize Legel’s test. For example, Hornick “noted in the literature that [Burgett] sent that the test was not customized to the New Haven Fire Department.” The Chairman of the CSB immediately corrected Hornick. . . . Hornick also relied on newspaper accounts — again, sent to him by Burgett — pertaining to the controversy surrounding the certification decision. Although Hornick again admitted that he had no knowledge about the actual test that Legel had developed and that the City had administered, the City repeatedly relied upon Hornick as a testing “guru” and, in the CSB Chairman’s words, “the City ke[pt]quoting him as a person that we should rely upon more than anybody else [to conclude that there] is a better way — a better mousetrap.” Dubois-Walton later admitted that the City rewarded Hornick for his testimony by hiring him to develop and administer an alternative test.

At some point prior to the CSB’s public meeting on March 18, 2004, the Mayor decided to use his executive authority to disregard the test results — even if the CSB ultimately voted to certify them. Accordingly, on the evening of March 17th, Dubois-Walton sent an e-mail to the Mayor, the Mayor’s executive assistant, Burgett, and attorney Ude, attaching two alternative press releases. The first would be issued if the CSB voted not to certify the test results; the second would be issued (and would explain the Mayor’s invocationof his executive authority) if the CSB voted to certify the test results. Half an hour after Dubois-Walton circulated the alternative drafts, Burgett replied: “[W]ell, that seems to say it all. Let’s hope draft #2 hits the shredder tomorrow nite.”

Soon after the CSB voted against certification, Mayor DeStefano appeared at a dinner event and “took credit for the scu[tt]ling of the examination results.”

Those are some ugly facts indeed, but are hardly unique. To the contrary, this fact pattern is often seen with the race baiting crowd, from Al Sharpton, to Jeremiah Wright to Jesse Jackson, etc. They have suffered a significant blow as a result of Ricci. They only bad thing about this decision is that it was a 5-4 split. Should we lose any of the conservative justices, instead of equal protection of the laws, we will have reverse discrimination ensconced as Constitutional law. God please save the Court . . . at least through 2012.

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Supreme Court's Ricci Decision - Half A Loaf (Updated)

I just scanned the Supreme Court's decision in Ricci v. DeStafano, holding 5-4 for the firefighters. That was the case brought by 11 New Haven Connecticut firefighters who had all achieved top scores on a promotion test. The City threw out the test results because no blacks were among their number. The firefighters argued that this act was unlawful under Title VII and that it was unlawful under the Equal Protection Clause of the Constitution.

Unfortunately, the Court's decision was limited in scope. Instead of deciding the penultimate issue - that the Equal Protection clause means that all discrimination, including reverse discrimination, is unlawful - the Supreme Court opted to limit its holding to Title VII. The decision changes the law of Title VII disparite impact claims - i.e., claims established based on a purely statitstical analysis of whether a hiring criteria resulted in too few of whatever minority or gender were hired as a result. If my initial read is correct, the holdings effect is ultimately to lessen the evidentiary value of such statistical claims as proof of racism.

While the outcome of the case is good, and it certainly points in the direction of an ultimate holding that the Equal Protection clause means what it says, the fact is that four liberal justices would have held otherwise. We are but one activist justice away from an Obama Supreme Court given the racially tinged green light to reverse racism.

Much more on this after I have a chance to pull it apart.

Update: Heh. I missed this. Johnathan Adler at The Volokh Conspiracy points out that Justice Alito, in his concurring opinion, had a terse rebuke of the "empathy standard":

There's also some interesting language at the close of Justice Alito's concurrence (joined by Justices Thomas and Scalia) that I read as a subtle rebuke to Judge Sotomayor and the Second Circuit panel (which expressed sympathy to the firefighters in its per curiam opinion), as well as a rejection of an "empathy" standard for judicial decision-making.

. . . The dissent grants that petitioners’ situation is “unfortunate” and that they “understandably attract this Court’s sympathy.” Post, at 1, 39. But “sympathy” is not what petitioners have a right to demand. What they have a right to demand is evenhanded enforcement of the law—of Title VII’s prohibition against discrimination based on race. And that is what, until today’s decision, has been denied them.

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