Official Ousted From Agriculture Department Had Taken USDA to Court, Won

The Agriculture Department has a lengthy history with the official forced to resign Monday over a controversial YouTube clip -- it turns out she and a group she helped found with her husband won millions last year in a discrimination suit settlement with the federal government.

The information about the suit only thickens the plot that has evolved seemingly by the hour since Shirley Sherrod resigned late Monday as the department's Georgia director of rural development.

She claims the video clip, which showed her telling a story about how she withheld her full assistance to a white farmer, omitted key details, and she argues she was pushed out by the Obama administration without getting a chance to tell her side. Agriculture Secretary Tom Vilsack is standing by his decision.

But it's not the first time Sherrod faced off against the federal government. Days before she was appointed to the USDA post last year, her group reportedly won a $13 million settlement in a longstanding discrimination suit against the USDA known commonly as the Pigford case.

The Rural Development Leadership Network announced last summer that New Communities Inc. -- a group Sherrod formed with husband Charles, who is a civil rights activist, and with other black farmers -- had reached the agreement. The RDLN said the USDA had "refused" to offer new loans or restructure old loans to members of New Communities, leading to the discrimination claim.

The announcement said that in addition to the $13 million to New Communities, Shirley and Charles Sherrod would each get $150,000 for "pain and suffering."

A USDA official told FoxNews.com on Tuesday that the settlement had "nothing to do with" Sherrod's hiring last year -- likewise, the official said her resignation was only the result of her comments in the video.

"This is all about her comments," the official said.

Sherrod's settlement was a drop in the bucket in terms of the money the federal government has paid out in Pigford claims to other black farmers over the years. The suit claimed the USDA racially discriminated against black farmers by not giving them fair treatment when they applied for loans or assistance. The case was first settled in 1999, resulting to date in more than $1 billion in compensation payments from the federal government.

In addition, the Obama administration has called for another $1.15 billion to settle claims for other black farmers -- Congress has not yet granted the money.

However, the case has attracted some scrutiny.

Former Agriculture Secretary Ed Schafer told Fox News that while those who were discriminated against "should be reimbursed," there are other hangers-on trying to game the system.

"The problem you have with the class-action lawsuits is a lot of people jump in that may be on the fringe, that maybe don't deserve it, that sounded good because their neighbor got a check ... (It) is very expensive, very time consuming," Schafer said. "It probably in the long run is going to be cheaper just to settle the whole thing -- so some people will get paid that probably don't deserve it. And to me, I don't like that kind of thing. I like to settle it on merit."

Vilsack appeared to reference the Pigford case, or the backstory behind it, in his statement Tuesday defending his decision to effectively dismiss Sherrod.

"Yesterday, I asked for and accepted Ms. Sherrod's resignation for two reasons. First, for the past 18 months, we have been working to turn the page on the sordid civil rights record at USDA and this controversy could make it more difficult to move forward on correcting injustices. Second, state rural development directors make many decisions and are often called to use their discretion," he said.

Sherrod claims the administration never bothered to find out "the truth" about the video clip. She says she was telling a story about something that happened more than two decades ago when she was working for a local nonprofit group. She ended up helping that farmer and says she was, in recalling the story, trying to impart a lesson about the importance of looking beyond race.