Xrhrft

I'm trying to identify a science fiction short story I read many years ago.

In it, Earth receives an emissary from the Galactic Government, who informs us that (our sense of self-importance notwithstanding) Earth is in a remote backwater and has only recently come to the attention of the Galactic Empire, which has assigned us a governor who is exceedingly and unpleasantly oppressive.

Worse yet, this Governor is notoriously color-prejudiced, strongly preferring beings who are green, or perhaps blue... Really, there are no humans who look like that? Oh, dear. That is really quite bad...

"Down the River." A short story written by Mack Reynolds. First published in Startling Stories (September 1950). I first encountered it in the anthology Galactic Empires, Volume 2, edited by Brian Aldiss.

A little Googling found portions of the text for me on Google Books, part of a collection called The Second Mack Reynolds Megapack: 21 Classic Tales of Science Fiction, which is available via Amazon (in a Kindle e-book edition) for a mere $0.99 in U.S. money.

It appears that for a long time, Earth has basically been primitive territory under the silent protection of "the Gabon of Carthis." However, some recent high-level negotiations among the great Galactic powers have led to a transfer of this territory to "the Gabon of Wharis," who is the ruler of the Wharis Empire. A new Graff (sort of like a provincial governor) will soon be sent out to represent that empire, and Wharis is not so laissez-faire about primitive native tribes as the rulers of Carthis have traditionally been. We can look forward to having our natural resources plundered for the benefit of more advanced worlds.

The old Graff, who is explaining this to leaders of the human nations before he leaves our solar system forever, draws an explicit comparison to the Louisiana Purchase, where France sold a huge chunk of North America to the USA, with none of the Native American tribes in that territory even being consulted in the matter, since their opinions simply didn't count!

And of course the story's title refers to the pre-Civil War tradition, in the USA, of selling a slave "down the river," which was understood in such places as Missouri (one of the northernmost slave states in those days, and located along the Missisippi River) to mean the slave would probably end up far worse off than he was before. (As a child, I think I first learned that meaning of "sold down the river" when I read Mark Twain's novel Pudd'nhead Wilson.)

The last paragraphs of Reynolds's story are visible on Google Books. I will quote them to show that this is definitely the same thing you were remembering. The old Graff, the one about to leave, is the person speaking first. The President of the United States is the other participant in this conversation.

"There is one thing I can suggest that might help you considerably in
your dealings with Belde Kelden Forty-eight L. I hope that in telling
you of it, I don't hurt your feelings."

"Of course not," the President said hurriedly and hopefully. "The fate
of the whole world is at stake. Anything that will help--"

"Well, then, I might say that I consider myself completely without
prejudice. It means nothing to me if a person has a green skin, a
yellow one, or is white, brown, black, or red. Some of my best friends
are unfortunately colored.

"However, well, don't you have any races on
this planet with a green complexion? Graff Belde Kelden Forty-eight L
is known to be extremely prejudiced against races of different colors.
If you had some green representatives to meet him--"

The President, who was from Mississippi, stared at him dumbly.

The Graff was distressed. "You mean you have no races at all on Earth
of green complexion?--or, at very least, blue?"

(Frankly, for a long time I've been thinking that the human race's best bet might be to use some Hollywood makeup artists to make certain people look green-skinned, and then send them out to be as charming as possible in representing us to the new Graff so that he would go comparatively easy on the rest of us. It might not work, but it could scarcely make things worse!)