The United States has a long legacy of racial oppression, despite legal and social condemnation of discriminatory behavior. While overt racism has declined, insidious racism—subtle, intentional racism—persists. Existing research on contemporary racism, including aversive, laissez-faire, symbolic, and color-blind racism, primarily focuses on unintentional racism. This article addresses a gap in the literature by focusing on insidious racism, a form of intentional racism that is deliberately subtle and exploits institutional weaknesses. The article introduces a framework to understand how the interaction between institutional design and administrator ideologies shapes the environment for insidious racism to flourish. It will analyze this framework using national (Wells Fargo and the Great Recession) and local (Los Angeles City Council redistricting) case studies.

The article critically examines existing theories of contemporary racism, including aversive racism, laissez-faire racism, color-blind racism, and symbolic racism. These theories, while valuable in explaining unintentional biases and systemic inequalities, are limited in their ability to account for intentional, subtle racist actions. Aversive racism highlights implicit biases in well-meaning individuals, while laissez-faire, color-blind, and symbolic racism emphasize the denial of the ongoing effects of historical oppression. These theories predominantly address unintentional racism, failing to capture the deliberate, concealed nature of insidious racism, which actively exploits institutional loopholes to achieve racist goals.

The study utilizes a qualitative methodology, employing a deviant case selection strategy to identify instances where the outcomes differ from predictions of conventional racism theories. Two case studies are analyzed: the first examines cases filed against Wells Fargo Bank following the Great Recession, focusing on discriminatory mortgage lending practices. The second investigates the 2021 Los Angeles City Council redistricting scandal, where leaked recordings revealed intentional efforts to manipulate district boundaries to the detriment of Black voters. Data for the Wells Fargo case come from a textual analysis of federal court opinions, memorandums, and orders related to Fair Housing Act violations. The Los Angeles case relies on a textual analysis of the leaked audio recording, transcripts, and relevant legal oversight documents such as the Ralph M. Brown Act. The framework presented analyzes the interplay between institutional oversight (police patrols and fire alarms) and the interventionist ideologies of administrators. The article examines how these factors create opportunities for insidious racism to manifest. Four key assumptions underpin the theoretical framework: profit maximization in for-profit entities, utility maximization in individual actors, the significance of color-blind ideology in shaping behaviors, and the relative resistance to racial inequity in Democratic-controlled institutions.

The Wells Fargo case illustrates how inadequate institutional oversight, specifically loopholes in Regulation B, allowed loan officers to engage in insidious racism by disproportionately steering Black and Latino borrowers into subprime mortgages. The low level of oversight coupled with a lack of administrative intervention created an environment conducive to this form of discrimination. The case reveals instances of explicit racist statements and practices within Wells Fargo, highlighting the intentional and not merely implicit nature of the discrimination. The Los Angeles City Council redistricting case demonstrates how a seemingly race-neutral process, governed by the California Brown Act, could be manipulated to achieve racist political goals. The leaked audio recording revealed that council members knowingly and intentionally conspired to manipulate district boundaries to dilute the political power of Black Angelenos, showcasing how the limitations of the Brown Act allowed for secret, strategic racism. The cases demonstrate that low institutional oversight, coupled with administrators holding low interventionist beliefs, creates fertile ground for insidious racism. Conversely, high institutional oversight can effectively mitigate the opportunity for insidious racism to take hold. However, even with high oversight, if administrators hold low interventionist beliefs, there remains a potential for insidious racism, depending on their capacity to intervene.

The findings demonstrate that insidious racism thrives in environments with low institutional oversight and administrators with limited interventionist ideologies. This contrasts sharply with conventional understandings of racism which mostly focus on implicit bias. The case studies highlight that overt, intentional racism persists and can be strategically employed to exploit existing institutional structures for political and economic gain. The article emphasizes the importance of addressing not only individual biases, but also designing institutions and empowering administrators to actively prevent and counter insidious forms of racism. The study reveals the need for robust oversight mechanisms and for administrators to adopt interventionist beliefs that actively promote fairness and equity.

This article introduces the concept of insidious racism and develops a framework to understand how institutional constraints and administrator ideologies shape its manifestation. The case studies of Wells Fargo and the Los Angeles City Council illuminate the crucial role of institutional design and administrator beliefs in creating environments that either prevent or permit insidious racism. Future research should focus on identifying other policy areas vulnerable to insidious racism and develop strategies to improve institutional designs and promote interventionist approaches among relevant authorities.

The study relies on qualitative case studies, limiting the generalizability of the findings. The cases selected might not be fully representative of all instances of insidious racism. The analysis of the interventionist beliefs of administrators is largely inferred from their actions, rather than directly measured. Further research using a larger sample size and mixed-methods approach would provide a more comprehensive understanding of this phenomenon.