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Congressional Committe: Obama Nominee Perez Involved in ‘Quid Pro Quo’ Deal



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Obama labor-secretary nominee Tom Perez arranged a quid pro quo deal with the City of St. Paul to avoid the Supreme Court’s taking a case involving disparate impact, according to a report released today by the House Oversight Committee, the House Judiciary Committee, and the Senate Judiciary Committee.

“The quid pro quo between the Department of Justice and the City of St. Paul, Minnesota, is largely the result of the machinations of one man: Assistant Attorney General Thomas Perez,” the report states.

In the beginning of 2012, the case, Magner v. Gallagher, was slated to be heard by the Supreme Court. Landlords had brought the suit against St. Paul, arguing that enforcement about housing conditions had disproportionately affected and shut down housing on which minorities relied, and thus, that the housing code had had “disparate impact.” The case caused alarm among many liberals, who worried that the Supreme Court ruling could affect other disparate-impact cases. Perez, who was running the Civil Rights Division at the Department of Justice, discovered that St. Paul was also facing a lawsuit from Frederick Newell, a man who had “filed a whistleblower lawsuit alleging that the City of St. Paul had received tens of millions of dollars of community development funds, including stimulus funding, by improperly certifying its compliance with federal law,” according to the report. Ultimately, the DOJ didn’t pursue Newell’s case, and St. Paul withdrew its case against the landlords.

Direct quotes from the report after the jump.#more# The report explains:

There is much more to the story of how Assistant Attorney General Perez manipulated the rule of law and pushed the limits of justice to make this deal happen. In his fervor to protect disparate impact, Perez attempted to cover up the true reasons behind the Justice Department’s decision to decline Fredrick Newell’s case by asking career attorneys to obfuscate the presence of Magner as a factor in the declination decision and by refraining from a written agreement. In his zeal to get the City to agree, Perez offered to provide HUD’s  assistance to the City in moving to dismiss Newell’s whistleblower complaint. The facts surrounding this quid pro quo show that Perez may have exceeded the scope of the ethics and professional responsibility opinions he received from the Department and thereby violated his duties of loyalty and confidentiality to the United States. Perez also misled senior Justice Department officials about the quid pro quo when he misinformed then-Associate Attorney General Thomas Perrelli about the reasons for Magner’s withdrawal.

From the report’s findings:

Assistant Attorney General Perez was personally and directly involved in negotiating the mechanics of the quid pro quo with David Lillehaug and he personally agreed to the quid pro quo on behalf of the United States during a closed-door meeting with the Mayor in St. Paul. . . .

Assistant Attorney General Perez attempted to cover up the quid pro quo when he personally instructed career attorneys to omit a discussion of Magner in the declination memos that outlined the reasons for the Department’s decision to decline intervention in Newell and Ellis, and focus instead only “on the merits.”

Assistant Attorney General Perez attempted to cover up the quid pro quo when he insisted that the final deal with the City settling two cases worth potentially millions of dollars to the Treasury not be reduced to writing, instead insisting that your “word was your bond.”

Perez’s hearing before the Senate Labor Committee will occur Thursday, and it’s likely that this matter will receive significant attention during the hearing. 



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