Thomas Perez, the president's nominee to lead the Department of Labor and a high-profile Latino advocate for civil rights, is scheduled for a Senate confirmation hearing April 18. But behind-the-scenes wrangling over his nomination, and his controversial role in a Supreme Court case, is already well under way.
House Oversight and Government Reform Committee Chairman Darrell Issa, R-Calif., and the ranking GOP member on the Senate Judiciary Committee, Charles Grassley, are investigating what they call a quid pro quo deal that may have cost the federal Treasury as much as $180 million.
The GOP lawmakers are upset by the appearance that the Justice Department used inappropriate reasons to stay out of a whistle-blower lawsuit that claimed the city of St. Paul, Minn., had misused funds it got from the Department of Housing and Urban Development. Under the False Claims Act, the Justice Department can intervene in such cases and support whistle-blowers, which often leads to victories or settlements that return millions of dollars to the U.S. Treasury.
Under the GOP theory, the Justice Department declined to throw its weight into that whistle-blower case as part of an improper deal with St. Paul, Minn. What's the other end of the alleged quid pro quo? That would be St. Paul agreeing to withdraw its bid for Supreme Court review in a separate case that put at risk a major legal tool the federal government uses in civil rights and housing discrimination cases.
In the case, Magner v. Gallagher, St. Paul asked the Supreme Court to consider the government's use of the so-called disparate impact theory, which allows lawsuits to proceed under the Fair Housing Act if people can prove a practice has a statistically significant negative impact on minorities, rather than specific bad acts involving individual landlords. That theory has been a frequent target of political conservatives and some members of Congress, and its supporters fear if the issue gets to the Supreme Court, it could be invalidated there.
Republican lawmakers have demanded more answers from Perez, the assistant attorney general for civil rights, and others in the Justice Department who may have played a role in that decision, which they consider a "dubious bargain."
Grassley told reporters earlier this month, "It's hard to believe that the president would nominate somebody at the heart of a congressional investigation and so deeply involved in a controversial decision to make a shady deal with the city of St. Paul, Minn."
New documents indicate Perez and other top DOJ officials have spent hours talking to members of Congress behind closed doors this month about that arrangement.
Perez told investigators in an eight-hour session on March 22 that the St. Paul case heading to the Supreme Court last year "caught my attention and was a source of concern."
In the first explanation of his role in the case, Perez said the dispute headed toward the Supreme Court presented some bad facts, and "because bad facts make bad law, this could have resulted in a decision that undermined our ability...to protect victims of housing and lending discrimination." He told lawmakers he reached out to people in Minnesota and found out they were interested in getting the Justice Department to stay out of a separate whistle-blower case that could cost the state money.
Perez said he reached out inside the Justice Department for ethics advice and told lawmakers he learned "there would be no concerns so long as I had permission" from counterparts in the civil unit handling the whistle-blower case and that "there was no prohibition on linking matters."
He added that he learned former Vice President Walter Mondale, who played a role in sponsoring the Fair Housing Act in Congress, and who had close ties to the mayor of St. Paul, was going to reach out regarding the Supreme Court case and its effects on civil rights enforcement as well.
"I believe then, and I believe now, that the result achieved here was in the best interests of the United States," he said.
Justice Department officials have turned over 1,500 pages of documents about the controversy, but that's unlikely to satisfy Republicans on Capitol Hill.
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