Gov. Kate Brown and Attorney General Ellen Rosenblum defended Oregon’s new $62 million coronavirus relief fund for Black Oregonians and businesses Thursday after the state was named in a lawsuit challenging the constitutionality of the program.
Great Northern Resources, a small logging company in John Day, filed litigation last month in the U.S. District Court in Portland contending that the state and organizers of the Oregon Cares Fund were violating the equal protection clause of the U.S. Constitution by distributing government benefits on the basis of race.
The lawsuit lists The Contingent, a nonprofit that is administering the fund in partnership with the Black United Fund, and the Oregon Department of Administrative Services as defendants.
Brown and Rosenblum, both Democrats, insisted in a statement Thursday that the Cares Fund is constitutional and said the state will actively defend it.
“The fund provides narrow, timely, and targeted relief to Black-owned businesses, Black-led nonprofits and Black families that demonstrate financial adversity due to COVID-19," the statement said. “As a state, we have a duty to aid those in need. We must not allow pernicious and ideologically-motivated lawsuits to impede our efforts to deliver critical resources to Oregonians amid a devastating pandemic."
In the lawsuit, Great Northern Resources said it expects to lose $200,000 this year because of the coronavirus recession and contends that it has a right to compete for coronavirus relief money allocated to businesses.
“This express use of race in distributing government money is unprecedented and blatantly unconstitutional,” the complaint asserts.
Great Northern Resources filed a motion Saturday to block the fund from using race to allocate money until the courts resolve its legal challenge. As of Wednesday, organizers of the Oregon Cares Fund had already approved more than $37 million in payments and paid out more than $27 million to over 7,000 Black Oregonians and nearly 400 Black-owned businesses and nonprofits.
Lawyers for the fund responded by offering to post a $200,000 bond, more that the program’s maximum grant amount, to reserve for Great Northern Resources in case their lawsuit succeeds. The court scheduled a hearing Nov. 20 to decide whether Great Northern Resources could establish irreparable harm to support a preliminary injunction in light of the bond offer.
Tad Houpt, a lands-rights activist who was active in the events around the occupation of the Malheur National Wildlife Refuge in 2016, identifies himself as president of Great Northern Resources in the litigation. Grant County Commissioner Sam Palmer identified himself as Great Northern’s vice president in a filing with the state last year.
Conservative legal strategist Edward Blum, who has led high-profile challenges to the federal Voting Rights Act and to racial considerations in college admissions, said his organization is funding Great Northern’s lawsuit.
Brown and Rosenblum pointed to Blum’s involvement in their statement Thursday, saying that the lawsuit was being funded by an “out-of-state activist who is known to use the courts to try to undermine civil rights legislation and public policy.”
However, the Oregon Legislature’s Emergency Board was aware that the legality of the fund might be challenged when they voted in July to allocate federal CARES Act dollars to seed the fund.
A July 13 opinion by the Legislative Counsel’s Office said that setting aside funds for one race could be considered unconstitutional without strong data and evidence showing “past discrimination in the economic sphere.” The agency said it wasn’t aware of the Legislature compiling that evidence.
Proponents of the fund pointed to a separate legal opinion from firm Schwabe, Williamson & Wyatt that contended Black Oregonians are suffering disproportionate economic harms from COVID-19 and receiving less aid from existing relief efforts.
According to the Oregon Health Authority, Black Oregonians are more than three times as likely as White Oregonians to contract COVID-19.
A study conducted by the National Community Reinvestment Coalition in July found that Black business owners had a harder time securing coronavirus financial relief than white business owners. A separate study from researchers at the University of California, Santa Cruz found that Black-owned businesses were closing twice as fast as White-owned businesses during the pandemic.
“The data show that Black Oregonians are experiencing disproportionate harm from COVID-19," said Brown and Rosenblum in Thursday’s statement. "These harms, the result of long-standing systemic inequities, include higher rates of COVID-19 infection and a greater risk of adverse health impacts. Additionally, Black-owned businesses are less likely to have received federal aid, and are closing at a faster pace than other businesses.”
-- Jamie Goldberg | jgoldberg@oregonian.com | @jamiebgoldberg
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