The Times said Friday political appointees in the Obama administration, including Agriculture Secretary Tom Vilsack, pushed for the move, which committed the money to compensate thousands of Hispanic and female farmers who had never claimed bias in court, the report said.
Career lawyers in the agriculture and justice departments argued against the plan, saying that payouts to people who had never filed discrimination claims were vulnerable to fraud and there was no evidence women and Hispanic farmers had suffered widespread discrimination in government aid.
The farmers argued biased federal loan officers had blocked their attempts to borrow money to farm, the Times said.
"I think a lot of people were disappointed," said J. Michael Kelly, a former associate general counsel in the Agriculture Department. "You can't spend a lot of years trying to defend those cases honestly, then have the tables turned on you and not question the wisdom of settling them in a broad sweep."
Vilsack, on the other hand, told the Times the compensation plan brings "a new chapter of civil rights at USDA." He said the department is now a place where "we celebrate diversity instead of discriminate against it."
The administration changed course in 2010, shortly after the U.S. Supreme Court rejected claims that thousands of women and Hispanics had been denied agricultural loans. The Times said there was pressure from some members of Congress, including Sen. Robert Menendez, D-N.J., who pushed for compensation for Hispanic farmers, and from lawyers involved in the case.
The administration of President Bill Clinton decided to compensate black farmers for discrimination against them.