The roots of the story are the midwest "penny auctions" of the 1930's. Where entire communities were under financial duress, farmers would rig land auctions against foreclosure. it was illegal even then, but at least you could stretch for moral justification. Although bankers and auctioneers were also members of the community, so there were always innocent victims. In any event, it was a radical political act at the time, and acknowledged as such by the participants. It would be so today if it was true, which I doubt.

In modern times, there are more mechanisms to defend against collusive bidding, such as reserve auctions. And in some cases, the auctioneer can pass the lot if there wasn't a competitive bid. In this case, someone thought they could draw on the history of 1930's radicalism and construct support for a political or social point with a parable of blood and land.

To set this right, here is the original story, in the original context:

"Like a Thick Wall": Blocking Farm Auctions in Iowa