$1 Million Racism Payout For ‘Little Rascals’ Comment Deemed ‘Monstrously Excessive’

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Luke Rosiak Investigative Reporter
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A lawyer who represents federal employees who have been discriminated against said the payment of $900,000 by a federal agency to an employee whose feelings were hurt by a race-tinged “Little Rascals” reference appears “monstrously excessive” based on past precedent.

He said it could have been designed to prevent a wider, public investigation that would have exposed more serious misconduct at Ginnie Mae, the mortgage agency within the Department of Housing and Urban Development (HUD).

“There has been some motivation from agencies where a motivation to settle is to prevent the discovery and disclosure of misconduct that is far beyond what happened to a plaintiff, where what’s at issue is only a small part of a much bigger concern. There is a reaction that they will try to pay off the client to stop discovery,” Kevin Owen, a partner at Gilbert and Associates who has successfully represented federal employees in major discrimination cases, told The Daily Caller News Foundation. “I would suspect there’s something out there, there has to be.”

Ginnie Mae Chief Operating Officer Mary Kinney once called a black employee “Buckwheat,” a minstrel-like character from the 1930s films. A subordinate later authorized the nearly $1 million taxpayer lump sum payment last year to secure a promise from the offended woman that she wouldn’t file a public lawsuit.

It is unlikely that the lawsuit would have resulted in a judgement greater than that size, so preserving Kinney’s reputation appeared to be a goal.

Owen said it would be curious for Secretary of Housing and Urban Development Julian Castro not to intervene to ensure that Ginnie Mae staff too close to the situation weren’t spending taxpayer cash recklessly. The settlement was signed by Ginnie Mae officials. (RELATED: When VA Employees Say The Boss Is Corrupt, Same Boss Can Authorize Funds To Pay Them Off)

“Given the size of this settlement, it strikes me as the type of agreement that would have or should have been run by the secretary,” Owen added.

Another plaintiff-side discrimination lawyer, contacted during the months that The Daily Caller News Foundation’s Investigative Group was attempting to pry proof of the settlement from the agency, said a reporter’s lead must be wrong, because federal discrimination cases weren’t “bonanzas” and that people who have been seriously harmed generally have to “fight tooth and nail.”

That lawyer, who after the settlement was confirmed was less interested in talking or being named, said managers aren’t inclined to settle because they aren’t paying for lawyers out of their own personal bank accounts.

He also said that, since the purpose of a settlement is to pay a lower amount rather than fight a longer battle that could result in a more expensive judgment, settling for a massive amount made little sense. Judges rarely award millions of dollars to individual federal employees.

Owen said cases with “almost seven figure” settlements typically involve “permanent disfigurement,” since there has to be “provable direct damages.” If an employee can’t see, for example, he can’t do his job, so a decade of lost earnings could be a million dollars in “front pay,” he said.

In this case, the woman continued to work in her same job, but said she could “barely think of anything else all weekend” because being called Buckwheat conjured a “slow and ignorant African American.”

The agency asked for itemized “objective proof” showing the dollar amount that she was harmed by, and it apparently accepted her documentation without challenge.

Owen said several things were sloppy about the HUD agreement. “I don’t know why they didn’t structure this as an annuity,” and, “They had an erroneous statement, they called it punitive damages,” which are not permitted.

The agency acknowledged that “there must have been a steady barrage of opprobrious comments and not a casual comment or accidental or sporadic conversation in order to trigger an entitlement to relief … routine work assignments, instructions, and admonishments do not rise to the level of discriminatory harassment,” but sided with the employee anyway.

Owen said that agencies often offer higher financial payments to employees to extract additional conditions, such as a secrecy clause or the employee’s resignation.

But in this case, while there was a confidentiality clause, the employee didn’t resign, and in fact was given numerous non-monetary items on top of the $900,000, including vacation time, a top performance rating, and a promise of discipline to the offender.

Neither party was permitted to disclose the settlement, and, until TheDCNF reported the story, the public did not know that HUD had entered into multiple settlements of anti-black racism allegations against Kinney. Kinney went on to take a position with a government contractor that is given preference because of its racial-minority status.

“If they wanted to keep it confidential from [the inspector general], [Office of Special Counsel] or Congress, that’s actually not lawful,” Owen said.

Moreover, it made no sense to have a massive taxpayer payout resulting from racism in the workplace, but not let anyone find out about it, he said, because part of the purpose of large awards is to publicly show that such conduct is not acceptable.

“The whole purpose of Title 7 as the courts have interpreted it, litigants under title 7 are not only litigating for themselves, but also to advance policies of anti-discrimination,” Owen said.

He said such a massive payout, and the issues with a direct subordinate authorizing a payment that protected his boss’s reputation, should have resulted in a close scrutiny of agency policies. “What would be best is if the [inspector general] looked into this.”

But the inspector general’s office told TheDCNF they hadn’t investigated Kinney.

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