The new shakedown

In a warm-up match for the forthcoming battle over slavery reparations, MetLife Inc., the nation's largest life insurance company, recently announced it will set aside a quarter-of-a-billion dollars to settle a class-action lawsuit brought by former black policyholders.
Nearly 60 years ago, MetLife sold life insurance policies to blacks that were more expensive and provided fewer benefits than policies marketed to whites. For this past practice, MetLife shareholders, employees and policyholders will pay a steep price. In its defense, MetLife claimed the statute of limitations had run out for the plaintiffs. Furthermore, it argued, the company began phasing out race-based underwriting in 1948 and hadn't used race at all since the mid-60s. In any event, the company also claimed that selling these weekly-pay burial policies to low-income, inner-city customers made perfect sense because most had difficulty paying larger monthly premiums. Besides, the actuarial cost of insuring blacks — whose life expectancy was much shorter and incomes much lower — was dramatically greater than insuring middle-class whites.
None of these arguments, however, persuaded a New York appellate court, which rejected MetLife's motions for summary judgment and paved the way for a full trial. Sensing a public relations nightmare, MetLife crumbled and wrote the check.
Meanwhile, the slavery reparations movement — including high-profile black lawyers such as Johnnie Cochran — has just filed a new lawsuit against Aetna, CSX and FleetBoston claiming they profited from the American slave trade prior to 1865.
Although the slavery reparations lawsuits will eventually target the U.S. government, most observers — even the pro-reparations activists themselves — understand that getting the courts to find for the descendants of slavery and against the federal government, 137 years after the institution was abolished seems remote.
So Mr. Cochran, Jesse Jackson, Al Sharpton and the others really have their sights leveled on corporate America. They anticipate that the cry for help from the two-dozen or so blue-chip corporations they target — who, like MetLife, face litigation and boycotts — will pressure the federal government to fashion a legislative remedy.
But even if the federal government doesn't offer them a bailout, the reparations lawyers know it is in the court of public opinion where most racial-bias lawsuits are settled. Texaco, Denny's, Coca Cola and others have settled specious bias claims rather than have Mr. Sharpton, Mr. Jackson and the members of the Congressional Black Caucus call for a nationwide boycott of their companies.
This is not some big, secret strategy for the reparations crowd, either. Randall Robinson, author of "The Debt," the manifesto of the reparations movement, was quoted in USA Today as admitting, "Once the record is fleshed out and made fully available to the American people, I think companies will feel some obligation to settle. Regret is not good enough. Aetna made money derivatively at least, from the business of slavery … Aetna has to answer for that."
And judging from how most of corporate America has responded to racial-bias allegations in the past, they will pay up once again, even though polling results indicate only 11 percent of white respondents believe corporations that made profits from slavery should make cash payments to black Americans who are descendants of slaves.
But frankly, in a perverse way, many of these companies deserve their fate. Once they started down the road of paying for lawsuit protection in the form of diversity training, affirmative action hiring and promotion, and cultural awareness, they were doomed. Every Mafiosi knows that once a business starts paying him for protection, the premiums grow larger and larger until he gets it all.
MetLife should have gone to court and fought. Other American companies, however, should learn an important lesson from this: elevating an individual's race as an element in contracting, hiring and promoting won't indemnify your company from a racial-bias litigation. In the end, every American pays for this capitulation since companies inevitably pass on their expenses to consumers.
But most tragically of all is the cost borne by black Americans, who ultimately pay the steepest price for this corporate surrender. As author Shelby Steele has noted, too many blacks suffer "from bad ideas, from ignorance, fear, a poor assessment of reality and from a politics that commits them to the idea of themselves as victims." His voice is complimented by National Public Radio's Juan Williams who has stated that slavery reparations "would tell Americans . . . that blacks, especially poor blacks, are a broken people who must be treated as wards of the state. Black people would be more highly stigmatized and negatively stereotyped than ever before."
Our society struggles to overcome the myth that many blacks are simply unable to make it in America. Slavery reparations are tailor-made not only to foster a sense of black victimhood, but further reinforce the stigma of black inferiority.
If corporate America takes the easy way out and abandons principle, it won't be a surprise — only a shame.

Ward Connerly is chairman and Edward Blum is director of legal affairs at the American Civil Rights Institute.