The Divide: American Injustice in the Age of the Wealth Gap

by Matt Taibbi

  The man says nothing, moves into her bedroom. It only takes a few steps to get there because it’s a one-room apartment. The apartment is so small, it’s almost like a walk-in freezer.

  The man starts going through her dresser drawers. He’s looking for men’s clothes. He thinks Eduardo still lives here, that the whole thing is a con. Maria explains: You’re not going to find anything, he doesn’t live here anymore. That’s why I applied for help, because I finally got him to move out. “Why would I want him back, after going through all that trouble?”

  The man shrugs again. “Well,” he says, fixing his eyes on her, “maybe you like that kind of life.”

  Maria says nothing.

  “I mean, maybe that’s the kind of man you like,” he says, grinning. “How should I know?”

  Maria feels herself getting dizzy and reaches out to try to find a chair to support herself. If this man works for the welfare office, she thinks, he must have seen the police reports, he must know my situation. So why is he saying these things? She’s so stunned that she barely notices that he’s asking her another question.

  “Huh, what?” she says. “I didn’t hear you.”

  “I said,” he repeats, “if he’s so bad, if he’s so mean, how come you haven’t moved away? Why are you still in Los Angeles? Why don’t you go back to Mexico?”

  Maria shakes her head. “Because I don’t have any money to move. That’s why I applied for welfare!”

  He shakes his head, chuckling. He’s still sifting through her drawers. He checks the socks, the underwear. He holds up pairs of pants to see if they might be big enough for a man. No, those are women’s clothes; he puts them back. As he goes about this benign-looking activity—he might be a bachelor folding clothes in a laundromat—he then mentions, offhandedly as it were, that she needs to pick up the phone if Eduardo ever comes back.

  “You need to report it if you let him back in your life,” he says. “Because I can take your kid from you. You understand?”

  Maria freezes.

  “Again, just so you’re clear. If you continue that relationship, I can take the kid. I will take your kid.”

  Maria is crying by now. The social worker finishes his bedroom exam, takes a cursory look in the bathroom—these inspectors glean quite a bit from the contents of a bathroom—then walks out the door.

  This all happened in 1989. Twenty-two years later Maria is telling me this story in her new home city of San Diego. We’re meeting in a ramshackle office on the outskirts of town that’s used by a local AA group. The lights are down, and just above us there are two huge dust-streaked posters in old calligraphy listing the twelve steps.

  Midway through the story, I could see Maria’s eyes wandering. She was reliving the experience. When she got to the part where the social worker says, “I mean, maybe that’s the kind of man you like,” she burst out crying. There was a stack of almost cardboardlike paper towels next to the coffee machine (all AA offices have an old, stained coffee machine) and by the end of the story she had gone through six or seven of those rough towels; she was falling apart.

  “They make you feel like a piece of garbage,” she says.

  Maria Espinosa was a pioneer. The sifting-through-the-dresser-drawer search she experienced in the early years of the George H. W. Bush presidency was an informal precursor to a Minority Report–style program that, in the Bill Clinton years, would become formalized in her new home county of San Diego. In San Diego County, from the late 1990s on, through today, the state preemptively searches for evidence of fraud in the homes of the tens of thousands of people who have applied and are applying for cash assistance via CalWORKs, the California version of Temporary Assistance for Needy Families, or TANF—what we used to call welfare.

  Today, every single person who applies for aid and is accepted has to be preemptively searched. These people are almost all nonwhite. And while in L.A. in the late 1980s, the person visiting the home of someone like Maria Espinosa was just a social worker from the local welfare office, the state has since upgraded. In San Diego now it’s a law enforcement official, a representative of the district attorney’s office, who comes in to look through your underwear drawer. The city has a team of investigators whose sole purpose is to conduct the searches for this program, which is called Project 100% or “P100” for short.

  One hundred percent compliance, that’s the idea. No outliers, no excuses. Fraud must not be tolerated, not even the smallest kind. So the program must be large, and appropriate resources must naturally be devoted to crime detection. In just one year, 2011, the county conducted an astonishing 26,000 home searches.

  P100 generates, by the thousand, stories that sound like testimonials culled from refugees of some distant, low-rent, third-world despotate. The stories are terrible, humiliating, abusive.

  “The first case I ever had was a Vietnamese woman who had lost one of her children in a refugee camp,” says Joni Halpern, a San Diego lawyer who has spent the last decade defending people on public assistance. “She’d come to America after suffering all kinds of abuse; she was a rape victim.

  “She applies for public assistance and a few days later there’s a knock on the door. The investigator comes in and immediately starts yelling at her, telling her he can take her children or take her to jail if she’s lying about not having a boyfriend.

  “He starts going through her dresser drawer. He opens her underwear drawer, sticks a pencil in there, and uses the pencil eraser to pull out a pair of panties that he thinks are too sexy for a woman living alone. And still holding them up by the eraser, he waves them at her, accusing her of having a man in the house.

  “That woman didn’t open the door to anyone for any reason for over a year after that,” Halpern says.

  Karen Bjorland, a white woman, applied for welfare in her twenties, when she was jobless and trying to raise her two-year-old son by herself. She remembers the caseworker coming through her door and immediately telling her that he can arrest her on the spot if she lied on her application. She remembers him going through everything in her apartment, commenting that the fridge was too stocked with food, sifting through her drawers, her medicine cabinet, even examining the stuffed animals in her son’s crib.

  Then she remembers how he went into the bathroom and whipped around in an apparent eureka! moment after finding two toothbrushes in her toothbrush holder.

  “What do you need two toothbrushes for?” he snapped.

  “I use them!” she protested.

  Years later, when Bjorland became one of a number of women who joined in a lawsuit against the county challenging the legality of the P100 program, she was again asked about the two toothbrushes by one of the county’s lawyers.

  “He asked me, ‘Why did you need two toothbrushes?’ ” Bjorland recalls today. “And I turned it right back around at him. ‘Let me ask you something, how many toothbrushes do you have?’ I said. And he was like, ‘Okay, forget about that question.’ ”

  In those tens of thousands of searches over the years, P100 investigators have looked in every nook and cranny, finding sins everywhere. They rejected an applicant who shared an apartment with a roommate for failing to properly label her food in the refrigerator—how could the state be sure, after all, that the applicant wasn’t illegally sharing food with her roommate? They rejected a woman for having a Victoria’s Secret bra (“How can you afford this?” the investigator asked, again holding up the item with the favored pencil eraser end), for having too big a jacket in the closet (it must be a man’s!), for having a teenage son whose pants were too ghetto (too baggy—again, it must be a man’s clothes). Searchers looked in dresser drawers, in bathrooms, in freezers and refrigerators, under and behind couches, everywhere.

  And eventually, of course, after twenty or thirty thousand of these searches, a few of these mostly black and Latina women on benefits who were in a job-counseling class together got together and decided, with the help of a few do-gooder local lawyers, to sue. After all, how
could a preemptive search by a law enforcement officer possibly be constitutional? Didn’t the state need a warrant, or probable cause, to conduct any kind of intrusive search, even of a car—much less someone’s home?

  That was the idea behind Rocio Sanchez et al. v. County of San Diego, a case filed with the aid of the local ACLU in 2004. Karen Bjorland, the woman who had too many toothbrushes, was one of six litigants in the class-action case. You would think this was a slam-dunk civil liberties case, but you’d be wrong. In fact, courts have been slowly chipping away at the Fourth Amendment protection against unreasonable searches and seizures for a long time, and the dominant theme in this gradual legal erosion has been an innovative new form of institutional racism, and a creepy inverse correlation between rights and need.

  Over and over again, we hear that if you owe money in a certain way, or if you receive a certain kind of public assistance, you forfeit this or that line item in the Bill of Rights. If you’re a person of means, you get full service for all ten amendments, and even a few that aren’t listed. But if you owe, if you rent, you get a slightly thinner, more tubercular version of the Fourth Amendment, the First Amendment, the Fifth and Sixth Amendments, and so on.

  It’s not that it’s written anywhere that if you’re black and you live in the projects, you don’t get protection against illegal searches—it just sort of works out that way. And if this makes any sense at all, it’s not about skin color. This is a cultural kind of bias. White people who live the wrong way get caught in the net, too. And as the income gap gets bigger and bigger, more and more white people are being pushed behind the line.

  The major precedent for the Sanchez v. San Diego suit was a Supreme Court case from the 1970s called Wyman v. James. In that one, a black single mother named Barbara James applied for and received welfare. After some time on public assistance, a caseworker called and asked to set up an appointment to see James in her home. James told the caseworker she was happy to meet on neutral territory, but that she didn’t see any need to let the caseworker into the house. The caseworker disagreed and nixed her benefits. A lawsuit ensued, and it made it all the way to the Supreme Court in 1971, where the nation’s top justices asked the question: Does the Fourth Amendment apply to people on welfare?

  Justice Harry Blackmun, writing for the majority, explained that it didn’t. The state, Blackmun wrote, “has appropriate and paramount interest and concern in seeing and assuring that the intended and proper objects of that tax-produced assistance are the ones who benefit from the aid it dispenses.” He added that “surely it is not unreasonable … that the State have at its command a gentle means … of achieving that assurance.”

  Writing the dissent in Wyman was Justice William Douglas, ably playing the supporting-actor part of the concerned-but-habitually-ignored civil libertarian. (Most of the legal dramas resulting in lost rights over the years would feature the same mopey character.) Douglas argued that the Wyman ruling was nuts because not just poor black ladies from the Bronx, but almost everyone lives off the government teat to one degree or another:

  We are living in a society where one of the most important forms of property is government largesse which some call the “new property.” … Defense contracts, highway contracts, and the other multifarious forms of contracts are another part. So are subsidies to air, rail, and other carriers. So are disbursements by government for scientific research. So are TV and radio licenses to use the air space which of course is part of the public domain.…

  In 1969 roughly 127 billion dollars were spent by the federal, state, and local governments on “social welfare.” To farmers alone almost four billion dollars were paid.… Almost 129,000 farmers received $5,000 or more, their total benefits exceeding $1,450,000,000.

  If we eliminate Fourth Amendment protection for everyone who receives public assistance, he implied, where does it end? Who wouldn’t have to let a government worker into his house? Would all 129,000 farmers have to let government agents into their homes, to make sure the subsidies reached the right target?

  “If you go by the logic in Wyman,” says Halpern, the San Diego lawyer, “anyone who claims a tax deduction could be searched.”

  But Douglas was overruled, of course, because the implicit intent of Wyman—not its explicit intent, but very much the implied meaning—didn’t cover everyone, just black welfare moms like Barbara James. No one else had to trade the Bill of Rights for government aid. So the state got to keep its “gentle means” of checking to make sure tax dollars were reaching appropriate destinations.

  Incidentally, the Court back then specifically noted that the “gentle means” was not made by “police or uniformed authority,” and that the visiting agent was “not a sleuth but rather, we trust … a friend to one in need.”

  Thirty-five years later, in Sanchez v. San Diego, the visiting agent would be transformed into a law enforcement agent and professional sleuth, and the “friend in need” would be someone who roots around in underwear drawers with pencil ends. But the U.S. Ninth Circuit Court of Appeals, led by an internment camp survivor named A. Wallace Tashima, nonetheless decided P100 wasn’t in any way unconstitutional. Tashima’s bizarre reasoning was that the P100 visits were not searches under the Fourth Amendment—but even if they were searches, they were not unreasonable.

  Why are they reasonable? Because, Tashima said, the public “has a strong interest in ensuring that aid provided from tax dollars reaches its proper and intended recipients.”

  So the standard is, anyone who receives aid from taxpayers forgoes his rights, because the state has a “strong interest” in rooting out fraud.

  But of course not everyone who receives state aid forgoes his or her rights, not really. To whom does this legal principle apply?

  Well, we know to whom, but we can’t put it on paper. It’s like pornography, you know it when you see it. As Americans, we’re all beginning to develop a second sense about who gets to feel the business end of the criminal justice system, and when, and who doesn’t, and why.

  That second sense we all carry around in our minds is our true government. It’s very different from the Schoolhouse Rock! official version, and different from the one we see celebrated every four years in our presidential campaign system. Schoolhouse Rock! teaches us that everyone is treated equally under the law, and that our government is one we’ve chosen in free elections, but at the same time we somehow know not to be surprised when that turns out not to be completely true. This has been hammered home to all of us in the recent years following the financial crash, when the dichotomy in the system has grown more and more visible, creeping higher and higher in our collective consciousness.

  For instance, while the San Diego District Attorney’s Office spent more than a decade sifting through thousands of dresser drawers and bringing felony cases all the way to court for frauds as small as four hundred dollars, executives in the same general area of Southern California, at companies like Countrywide and Long Beach Mortgage, were pioneering the brilliant mass fraud scheme that involved the sales of toxic mortgage-backed securities.

  One of the favorite targets of that fraud scheme was government and the taxpayer. These companies, along with their bankers, loved more than anything to sell worthless mortgage bonds to Fannie Mae and Freddie Mac, the government-backed housing agencies.

  Just one Southern Californian company, Countrywide, dumped as much as $26.6 billion on the taxpayer and the state when it sold overvalued bonds to Fannie and Freddie. Bank of America, its eventual parent company, sold another $6 billion to Fannie and Freddie. Fifteen other companies also targeted the federal government for hundreds of millions and billions more. The state of California’s pension fund, CalPERS, was also the target of massive fraud schemes, as banks, mortgage lenders, and ratings agencies conspired to sell California workers billions more in worthless securities in exchange for their life savings.

  By the time all these companies were finished first inflating and then crashing a huge global ass
et bubble based on overvalued mortgages, the world had lost trillions of dollars—one extremely conservative estimate by the IMF put the losses at $4 trillion. But despite having been warned about the possibility of widespread mortgage fraud by the FBI as early as 2004, financial cops in regulatory agencies like the SEC and the OCC didn’t respond to the problem at all until well after the crash.

  When they finally did respond, they did so by bringing civil suits against companies like Countrywide, JPMorgan Chase, Bank of America, Wachovia, TD Ameritrade, Goldman Sachs, Charles Schwab, and others.

  In the twenty-one biggest federal settlements over mortgage fraud abuses—$300 million from State Street for lying to investors, $153 million from Chase in the Magnetar settlement, and so on—those companies and a few others paid a total of $26 billion in damages to the government. In every single one of those cases, the relevant companies were allowed to settle without admitting wrongdoing. Not a single individual was charged in any of those cases. Not a single individual had to pay so much as a dime of his own money in damages.

  Not one home was searched. No banker ever had someone pick up his underwear by a pencil end and wave it in his face.

  Twenty-six billion dollars of fraud: no felony cases. But when the stakes are in the hundreds of dollars, we kick in 26,000 doors a year, in just one county.

  You can drive yourself crazy trying to figure out how this makes sense, financial or otherwise. But it does make sense. It’s just not about money. It’s about fucking with people. It’s the logic of our new shadow government.

  It turns out that we’re too lazy to govern ourselves, so we’ve put society on bureaucratic autopilot—and autopilot turns out to be a steel trap for losers and a greased pipeline to money, power, and impunity for winners.