By Greg Milam, US Correspondent
Barack Obama has labelled what happened in the Missouri city of Ferguson as "oppressive and abusive", on the eve of a visit to one of the civil rights movement's most historic landmarks.
The US President will speak in Selma, Alabama, later to mark the 50th anniversary of the marches that took place to protest against the lack of voting rights.
The anniversary comes with America digesting the report from the Department of Justice detailing racial bias in Ferguson, a city which saw violent protests over the killing of an unarmed black man by a white police officer last summer.
"What we saw was that the Ferguson Police Department in conjunction with the municipality saw traffic stops, arrests, tickets as a revenue generator, as opposed to serving the community, and that it systematically was biased against African-Americans in that city who were stopped, harassed, mistreated, abused, called names, fined," Mr Obama said at a town hall-style meeting in Columbia, South Carolina.
He said Ferguson must now make a decision about how to move forward.
"Are they going to enter into some sort of agreement with the Justice Department to fix what is clearly a broken and racially biased system?" Mr Obama said.
"Or, if they don't, then the Justice Department has the capacity to sue the city for violations of the rights of the people of Ferguson."
Mr Obama will later be joined in Selma by the first family and former president George W Bush.
"Selma is not just about commemorating the past, it's about honouring the legends who helped change this country through your actions today, in the here and now," Mr Obama said at the South Carolina meeting.
"Selma is now."
The city has been propelled into the global spotlight again this year with the release of the movie Selma and the controversy over its shortage of Oscar nominations.
In March 1965, the city saw police beat back crowds attempting to march to the state capital Montgomery to protest over the inability of black people to register to vote.
The violent images broadcast on national television helped lead to passage of the Voting Rights Act after protesters were joined by Dr Martin Luther King.
Dr F D Reese, who invited Dr King to Selma to lead the protests, says some of the legacy has been wasted.
He told Sky News: "The civil rights movement still has more to do because when you deal with human beings, people have opportunities to do great things but then after doing great things, they fail to do certain things that they should do in the future."
The anniversary events will be focussed on the Edmund Pettus Bridge.
A unity march of leaders from all faiths will be staged over the weekend.
Dr Jerry Light, leader of the First Baptist Church, said: "1965 was a horrible time for Selma but it was a horrible time for all of the South and, just like many of the other cities, we have overcome.
"We are not where we want to be but we are working in that direction."
Selma, which sits on the Alabama River, grew as a cotton port but its economy has suffered with the loss of a major military base.
Some in the city say it suffers a stigma from its association with such a notorious chapter in American history and has struggled to attract investment, but the mayor denies that.
George Evans told Sky News: "I think there is still a lot of room for improvement when it comes to race relations.
"There are still people living in the past but I think the mass majority of people in the United States and Selma are interested in moving forward.
"What happened in '65 is what happened in '65, what is happening now is another world.
"The idea now is not to try and get even but to get it right."
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Gallery: Nov 25 - Protests Turn Ugly In Missouri
A man watches a burning building after a grand jury returned no indictment in the shooting of Michael Brown in Ferguson, Missouri
Lesley McSpadden, mother of Michael Brown, reacts to hearing the grand jury decision over the death of the 18-year-old unarmed black teenager, shot by a white police officer in Ferguson, Missouri
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