Select Page

Disparate Impact Alive and Well

I’ve written about disparate impact numerous time over the years, warning that this tactic would begin to be seen more frequently beyond the business world, such as in housing and labor.  Thomas Perez and Loretta Lynch are two of its fiercest advocates, and a recent story in the Wall Street Journal suggests that my prediction is coming true.

The idea of “disparate impact” holds that a defendant can be held liable for discrimination for a race-neutral policy that statistically disadvantages a specific minority group even if that negative “impact” was neither foreseen nor intended.  The Department of Labor has leveled that charge at a Silicon Valley software firm, Palantir Technologies.

According to the Wall Street Journal, five years ago, the Department of Labor accused Palantir of racial discrimination against Asian-Americans on three occasions, saying “the racial composition of Palantir’s hires for three positions—out of 44 job titles—in 2010 and 2011 didn’t mirror its applicant pool. Palantir hired one Asian and six non-Asian applicants for a quantitative-analysis position out of a pool of 730 “qualified applicants,” 77% of whom were Asian. For a software-engineer position, the company hired 14 non-Asian and 11 Asian applicants out of 1,160 applicants (85% of whom were Asian). The complaint says the odds of this occurring “by chance” are one in 3.4 million.”

But here’s the problem. The Department of Labor, by looking at everything entirely by race, completely ignores (excludes?) the idea that a company hire employees based on skill. Palantir argued this point in response: that the Department of Labor’s “analysis assumes incorrectly that anyone having any ‘domestic education,’ any ‘internship,’ any ‘prior experience,’ and ‘Java skills’ should be considered ‘equally or more qualified’ for the positions.”  It adds that the department is “essentially advocating” an “illegal quota system.”

“Palantir notes that a quarter of its workforce and 37% of its product engineering team are of Asian descent. Of the 33 hired by Palantir during 2010 and 2011, 36% were Asian. Two of the four members of Palantir’s senior leadership identify as Asians. And more than half of the managers who oversaw the hiring process are Asian.

If Palantir had selected employees at random, 80% would be Asian. Then Labor might have said it is guilty of discriminating against Latinos and blacks.”

As if the charges weren’t bad enough, the Department of Labor decided to take it further this month after Palantir fought back with its responses. Labor has requested a “an administrative-law judge to cancel Palantir’s federal contracts and force the company to compensate the alleged victims of its discrimination.”  Of course, since Palantir did not actually discriminate against anyone, no one has requested compensation.  Only in the world of disparate impact analysis did Palantir do anything wrong, and since the Department of Labor does not disclose its methodology of determining disparate impact violations (except for broad statistics), no company can actually know if they are violating this kind of bogus “policy” of the Department of Labor.

It’s this kind of  egregious action by the Department of Labor that makes being a business owner in the current climate a very difficult thing.

Disparate Impact Cases Will Now Become More Commonplace

For months now, I have written about “disparate impact”. The idea of “disparate impact” holds that “a defendant can be held liable for discrimination for a race-neutral policy that statistically disadvantages a specific minority group even if that negative “impact” was neither foreseen nor intended. Loretta Lynch, the new Attorney General, recently signaled a strong interest in making “disparate impact” a priority of her term.

Disparate impact is rapidly being expanded into other sectors such as housing and labor, beyond the business world where it originated. In disparate impact cases, defendants can be forced to pay for harm caused not by their own actions, but by economic and statistical realities, even if beyond their control.

The Obama Administration is particularly interested in this tactic. They first put forth Thomas Perez, the current Labor Secretary, as the preferred nominee for Attorney General. Thomas Perez has arguably been one of the biggest proponents of disparate impact in the workplace; his confirmation would have thrust “disparate impact” firmly into the spotlight.

Ultimately, Loretta Lynch became the next Attorney General . Lynch is a tough woman, known for her penchant for civil asset forfeiture cases. As such, it became apparent she would be a great choice for advocating and implementing disparate impact policies as well. After two cases before the Supreme Court that were unsuccessful putting forth disparate impact, the Supreme Court ruled in favor of the policy on June 25th with the Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc. Lynch put out a press release praising the outcome and the policy of disparate impact; you can read that here.

Now it has subsequently been revealed by The New York Post a few days ago that the Obama Administration has created a secret database. It is apparent now that “a key part of President Obama’s legacy will be the fed’s unprecedented collection of sensitive data on Americans by race. The government is prying into our most personal information at the most local levels, all for the purpose of “racial and economic justice.”

The purpose of this endeavor is to help expand disparate impact claims. “This Orwellian-style stockpile of statistics includes a vast and permanent network of discrimination databases, which Obama already is using to make “disparate impact” cases against: banks that don’t make enough prime loans to minorities; schools that suspend too many blacks; cities that don’t offer enough Section 8 and other low-income housing for minorities; and employers who turn down African-Americans for jobs due to criminal backgrounds.”

Besides the enormous invasion of privacy that such databases represent, just as alarming is the fact that race will now be analyzed and micromanaged in every aspect of modern society. With that, disparate impact claims, led by Lynch and the Department of Justice are certain to grow, impact, and cripple many industries in the years to come.

Below is the New York Post article in its entirety, for those who are interested:

Obama Collecting Personal Data For A Secret Race Database

A key part of President Obama’s legacy will be the fed’s unprecedented collection of sensitive data on Americans by race. The government is prying into our most personal information at the most local levels, all for the purpose of “racial and economic justice.”

Unbeknown to most Americans, Obama’s racial bean counters are furiously mining data on their health, home loans, credit cards, places of work, neighborhoods, even how their kids are disciplined in school — all to document “inequalities” between minorities and whites.

This Orwellian-style stockpile of statistics includes a vast and permanent network of discrimination databases, which Obama already is using to make “disparate impact” cases against: banks that don’t make enough prime loans to minorities; schools that suspend too many blacks; cities that don’t offer enough Section 8 and other low-income housing for minorities; and employers who turn down African-Americans for jobs due to criminal backgrounds.

Big Brother Barack wants the databases operational before he leaves office, and much of the data in them will be posted online.

So civil-rights attorneys and urban activist groups will be able to exploit them to show patterns of “racial disparities” and “segregation,” even if no other evidence of discrimination exists.

Housing database

The granddaddy of them all is the Affirmatively Furthering Fair Housing database, which the Department of Housing and Urban Development rolled out earlier this month to racially balance the nation, ZIP code by ZIP code. It will map every US neighborhood by four racial groups — white, Asian, black or African-American, and Hispanic/Latino — and publish “geospatial data” pinpointing racial imbalances.
The agency proposes using nonwhite populations of 50% or higher as the threshold for classifying segregated areas.

Federally funded cities deemed overly segregated will be pressured to change their zoning laws to allow construction of more subsidized housing in affluent areas in the suburbs, and relocate inner-city minorities to those predominantly white areas. HUD’s maps, which use dots to show the racial distribution or density in residential areas, will be used to select affordable-housing sites.
HUD plans to drill down to an even more granular level, detailing the proximity of black residents to transportation sites, good schools, parks and even supermarkets. If the agency’s social engineers rule the distance between blacks and these suburban “amenities” is too far, municipalities must find ways to close the gap or forfeit federal grant money and face possible lawsuits for housing discrimination.
Civil-rights groups will have access to the agency’s sophisticated mapping software, and will participate in city plans to re-engineer neighborhoods under new community outreach requirements.
“By opening this data to everybody, everyone in a community can weigh in,” Obama said. “If you want affordable housing nearby, now you’ll have the data you need to make your case.”

Mortgage database

Meanwhile, the Federal Housing Finance Agency, headed by former Congressional Black Caucus leader Mel Watt, is building its own database for racially balancing home loans. The so-called National Mortgage Database Project will compile 16 years of lending data, broken down by race, and hold everything from individual credit scores and employment records.

Mortgage contracts won’t be the only financial records vacuumed up by the database. According to federal documents, the repository will include “all credit lines,” from credit cards to student loans to car loans — anything reported to credit bureaus. This is even more information than the IRS collects.

The FHFA will also pry into your personal assets and debts and whether you have any bankruptcies. The agency even wants to know the square footage and lot size of your home, as well as your interest rate.
FHFA will share the info with Obama’s brainchild, the Consumer Financial Protection Bureau, which acts more like a civil-rights agency, aggressively investigating lenders for racial bias.

The FHFA has offered no clear explanation as to why the government wants to sweep up so much sensitive information on Americans, other than stating it’s for “research” and “policymaking.”

However, CFPB Director Richard Cordray was more forthcoming, explaining in a recent talk to the radical California-based Greenlining Institute: “We will be better able to identify possible discriminatory lending patterns.”

Credit database

CFPB is separately amassing a database to monitor ordinary citizens’ credit-card transactions. It hopes to vacuum up some 900 million credit-card accounts — all sorted by race — representing roughly 85% of the US credit-card market. Why? To sniff out “disparities” in interest rates, charge-offs and collections.

Employment database

CFPB also just finalized a rule requiring all regulated banks to report data on minority hiring to an Office of Minority and Women Inclusion. It will collect reams of employment data, broken down by race, to police diversity on Wall Street as part of yet another fishing expedition.

School database

Through its mandatory Civil Rights Data Collection project, the Education Department is gathering information on student suspensions and expulsions, by race, from every public school district in the country. Districts that show disparities in discipline will be targeted for reform.
Those that don’t comply will be punished. Several already have been forced to revise their discipline policies, which has led to violent disruptions in classrooms.

Obama’s educrats want to know how many blacks versus whites are enrolled in gifted-and-talented and advanced placement classes.

Schools that show blacks and Latinos under-enrolled in such curricula, to an undefined “statistically significant degree,” could open themselves up to investigation and lawsuits by the department’s Civil Rights Office.

Count on a flood of private lawsuits to piggyback federal discrimination claims, as civil-rights lawyers use the new federal discipline data in their legal strategies against the supposedly racist US school system.

Even if no one has complained about discrimination, even if there is no other evidence of racism, the numbers themselves will “prove” that things are unfair.

Such databases have never before existed. Obama is presiding over the largest consolidation of personal data in US history. He is creating a diversity police state where government race cops and civil-rights lawyers will micromanage demographic outcomes in virtually every aspect of society.
The first black president, quite brilliantly, has built a quasi-reparations infrastructure perpetually fed by racial data that will outlast his administration.

Paul Sperry is a Hoover Institution media fellow and author of “The Great American Bank Robbery,” which exposes the racial politics behind the mortgage bust.

Loretta Lynch on Disparate Impact

I have written about disparate impact many times over the past couple of years. I was gravely concerned about Loretta Lynch’s nomination to be the next Attorney General because of the huge role she has played in civil asset forfeiture cases. Now that the disparate impact case has been decided by the Supreme Court, I am concerned that she will now take up the mantle of disparate impact, much in the way Thomas Perez, the Labor Secretary, has done (and don’t forget, Perez was the original front runner for the AG job).

Below is Loretta Lynch’s statement on the SCOTUS ruling regarding disparate impact — the last line says it all: “Bolstered by this important ruling, the Department of Justice will continue to vigorously enforce the Fair Housing Act with every tool at its disposal – including challenges based on unfair and unacceptable discriminatory effects.”

Remember, disparate impact allows if a protected class of citizens has a statistically lesser representation with respect to a business (hiring, mortgages origination, etc) it may be implied that the business or offender has intentionally discriminated — because there is an adverse impact as a result. In other words, “offenders” can be sought after for violating the law, whether or not there was actual intent. Unfortunately, disparate impact thus puts the burden to show lack of discrimination on the accused offender, meaning he is guilty until proven innocent.

It looks like with this statement that the Department of Justice will begin to more actively pursue disparate impact cases.

FOR IMMEDIATE RELEASE, Thursday, June 25, 2015

Attorney General Loretta E. Lynch Statement on the U.S. Supreme Court Ruling in Texas Department of Housing and Community Affairs v. Inclusive Communites Project Inc.
Attorney General Loretta E. Lynch released the following statement today after the Supreme Court ruling in Texas Department of Housing and Community Affairs v. Inclusive Communities Project Inc.:

“I am pleased that the Supreme Court has affirmed that the Fair Housing Act encompasses disparate impact claims, which are an essential tool for realizing the Act’s promise of fair and open access to housing opportunities for all Americans. While our nation has made tremendous progress since the Fair Housing Act was passed in 1968, disparate impact claims remain an all-too-necessary mechanism for rooting out discrimination in housing and lending. By recognizing that laws, policies and practices with unjustified discriminatory effects are inconsistent with the Fair Housing Act, today’s decision lends support to hardworking Americans who are attempting to find good housing opportunities for themselves and their families. Bolstered by this important ruling, the Department of Justice will continue to vigorously enforce the Fair Housing Act with every tool at its disposal – including challenges based on unfair and unacceptable discriminatory effects.”

Loretta Lynch Vote is Drawing Near

The vote to confirm Loretta Lynch might happen as early as this week. The process has been stretched out under the auspices of being contingent on passing a human trafficking bill in the Senate, but it is just as likely that the vote was put quietly on hold in a “logjam” until 51 votes were clinched for certain. It has been a struggle to get enough votes throughout the process, with the 51 vote only been secured at the beginning of April. 5 Senate Republicans that were needed are: Sens. Orrin Hatch (Utah), Lindsey Graham (S.C.) and Jeff Flake (Ariz.) — all members of the Judiciary Committee — and moderate Sens. Mark Kirk (Ill.) and Susan Collins (Maine).

Lynch’s opponents have been painted as racist and anti-immigrant. But the most abhorrent reason for nominating Lynch is truly in the realm of civil rights, with the media turning a blind eye to her antics, specifically related to civil asset forfeiture.

The most ironic about the matter is that “Ten civil and human rights organizations, including the National Action Network, which is headed by the Rev. Al Sharpton, the League of United Latin American Citizens and the NAACP wrote a letter to McConnell [last] Friday urging a vote on Lynch.

A couple of months ago, I wrote an open letter decrying the nomination of Loretta Lynch and spelled out her egregious record on the issue of civil rights, which should be chilling for anyone considering her nomination. I will repost it here below, since the media has failed to give any real scrutiny to her time in New York.

The nomination of Loretta Lynch to the position of Attorney General is before you. Although her intelligence, experience, and poise may appear to make her a superb candidate, it is clear now that she would be an extremely poor – even dangerous — choice due to her strong position on civil asset forfeiture.

The need to safeguard civil liberties and individual rights is a priority for all Americans. Do you really want to consider confirming a person who has been exceedingly proud of her record of taking property without due process…of practicing guilty until proven innocent? This is a very serious issue, not to be taken lightly.

Civil asset forfeiture is a particularly egregious abuse of power, allowing the government to seize property and cash if it merely suspects wrongdoing, even with no evidence and no charging of a crime.

Loretta Lynch was particularly lucrative in this regard as the U.S. attorney for the Eastern District of New York. Between 2011 and 2013, the forfeiture operations under her management netted more than $113 million in civil actions. Lynch’s division was among the top in the country for its collections. But this is not something to be proud of.

In one particularly appalling case, Loretta Lynch’s office seized nearly a half-million dollars from two businessman in 2012 and sat on it for more than two years without a court hearing or appearance before a judge. In fact, no crime had been committed. These men were denied due process and deprived of their assets without warning or criminal charges. Lynch suddenly returned the money just weeks ago on January 20, 2015 — on the eve of her confirmation hearings, having found no wrongdoing by the men either.

During Lynch’s confirmation hearing testimony pertaining to civil asset forfeiture, Lynch stated that “civil and criminal forfeiture are very important tools of the Department of Justice as well as our state and local counterparts.” She further argued that forfeiture is “ done pursuant to court order, and I believe the protections are there.” This is, in fact, not true. In the case mentioned above, there was not only no court order, but also no hearing at any time in nearly three years. That is unconscionable. And this is only one of many similar, well-documented, incidents.

The problem of civil asset forfeiture is that the government can confiscate money or property under the mere suspicion of a crime without ever actually charging someone. The person must prove his innocence to reclaim what was seized, which is a burden of time and money and readily seems to go against our staunch American belief of “innocent until proven guilty.” What’s more, besides the obvious threat to civil liberties, those most likely to be victims are poor and minority citizens.

Thankfully, in recent months, individuals and organizations on both sides of the political aisle have come together to demand reform to this unjust practice. Bipartisan legislation has been proposed in Congress; groups ranging from the Heritage Foundation to the American Civil Liberties Union have been increasingly critical of civil asset forfeiture practices. Even Eric Holder has called for changes and the IRS has recently and publicly pledged to reduce its involvement as well.

Loretta Lynch and her record on civil asset forfeiture represents the worst of this “tool for law enforcement”. A vote for her confirmation is a vote you will never be able to walk back. Do you really want to confirm a person who is so deeply committed to civil asset forfeiture at the very same time in America that there is strong bipartisan support for protecting civil liberties and walking back the laws pertaining to this practice? It makes no sense to proceed down this path.

Loretta Lynch may arguably be the most successful forfeiture agent in government today. This is not a positive quality for an Attorney General. The practice is abusive and her tactics even more so. Voting to confirm a person with such an atrocious civil liberties record is certain to cause problems for you down the road when you have to answer for your support. Therefore, on behalf of all Americans, I urge you to vote no for her confirmation.

An Open Letter to the Senate Regarding Loretta Lynch


The nomination of Loretta Lynch to the position of Attorney General is before you. Although her intelligence, experience, and poise may appear to make her a superb candidate, it is clear now that she would be an extremely poor – even dangerous — choice due to her strong position on civil asset forfeiture.

The need to safeguard civil liberties and individual rights is a priority for all Americans. Do you really want to consider confirming a person who has been exceedingly proud of her record of taking property without due process…of practicing guilty until proven innocent? This is a very serious issue, not to be taken lightly.

Civil asset forfeiture is a particularly egregious abuse of power, allowing the government to seize property and cash if it merely suspects wrongdoing, even with no evidence and no charging of a crime.

Loretta Lynch was particularly lucrative in this regard as the U.S. attorney for the Eastern District of New York. Between 2011 and 2013, the forfeiture operations under her management netted more than $113 million in civil actions. Lynch’s division was among the top in the country for its collections. But this is not something to be proud of.

In one particularly appalling case, Loretta Lynch’s office seized nearly a half-million dollars from two businessman in 2012 and sat on it for more than two years without a court hearing or appearance before a judge. In fact, no crime had been committed. These men were denied due process and deprived of their assets without warning or criminal charges. Lynch suddenly returned the money just weeks ago on January 20, 2015 — on the eve of her confirmation hearings, having found no wrongdoing by the men either.

During Lynch’s confirmation hearing testimony pertaining to civil asset forfeiture, Lynch stated that “civil and criminal forfeiture are very important tools of the Department of Justice as well as our state and local counterparts.” She further argued that forfeiture is “ done pursuant to court order, and I believe the protections are there.” This is, in fact, not true. In the case mentioned above, there was not only no court order, but also no hearing at any time in nearly three years. That is unconscionable. And this is only one of many similar, well-documented, incidents.

The problem of civil asset forfeiture is that the government can confiscate money or property under the mere suspicion of a crime without ever actually charging someone. The person must prove his innocence to reclaim what was seized, which is a burden of time and money and readily seems to go against our staunch American belief of “innocent until proven guilty.” What’s more, besides the obvious threat to civil liberties, those most likely to be victims are poor and minority citizens.

Thankfully, in recent months, individuals and organizations on both sides of the political aisle have come together to demand reform to this unjust practice. Bipartisan legislation has been proposed in Congress; groups ranging from the Heritage Foundation to the American Civil Liberties Union have been increasingly critical of civil asset forfeiture practices. Even Eric Holder has called for changes and the IRS has recently and publicly pledged to reduce its involvement as well.

Loretta Lynch and her record on civil asset forfeiture represents the worst of this “tool for law enforcement”. A vote for her confirmation is a vote you will never be able to walk back. Do you really want to confirm a person who is so deeply committed to civil asset forfeiture at the very same time in America that there is strong bipartisan support for protecting civil liberties and walking back the laws pertaining to this practice? It makes no sense to proceed down this path.

Loretta Lynch may arguably be the most successful forfeiture agent in government today. This is not a positive quality for an Attorney General. The practice is abusive and her tactics even more so. Voting to confirm a person with such an atrocious civil liberties record is certain to cause problems for you down the road when you have to answer for your support. Therefore, on behalf of all Americans, I urge you to vote no for her confirmation.