The Corner

Politics & Policy

New Democratic Party Chair Thomas Perez Was Cited By Congress For Official Misdonduct

After a length and contentious campaign, the Democratic Party has chosen Thomas Perez, who served as Labor Secretary and Assistant Attorney General for Civil Rights under President Obama, as its new chairman over Congressman Keith Ellison. Perez was seen as the more establishment choice, given his ties to Obama and Hillary Clinton and Ellison’s incendiary history. He is, however, every bit as much a hard-left progressive. Moreover, it is worth recalling that in 2013, when he was under consideration for the Labor job, Perez was cited by an unusual joint Congressional report for manipulating the legal system and misleading Congress in sworn testimony.

The controversy arose from Perez’s efforts in 2011-12 to prevent the Court from hearing a case challenging “disparate impact” theories of liability under the Fair Housing Act. Perez was apparently concerned that this expansive theory would not survive the Court’s scrutiny, and undertook an unconventional series of steps to prevent the case from reaching the Court. As the joint report by the Senate and House Judiciary Committees and the House Oversight Committee found:

  • The Department of Justice entered into a quid pro quo arrangement with the City of St. Paul, Minnesota, in which the Department agreed to drop two cases — United States ex rel. Newell v. City of St. Paul and United States ex rel. Ellis v. City of St. Paul et al. — in exchange for the City withdrawing Magner v. Gallagher from the Supreme Court.
  • In declining to intervene in a whistleblower complaint as part of the quid pro quo with the City of St. Paul, the Department of Justice gave up the opportunity to recover as much as $200 million.
  • The initial development of the quid pro quo by senior political appointees, and the subsequent 180 degree change of position, confused and frustrated the career Department of Justice attorneys responsible for enforcing the False Claims Act, who described the situation as “weirdness,” “ridiculous,” and a case of “cover your head ping pong.”
  • The “consensus” of the federal government to switch its recommendation and decline intervention in Newell was the direct result of Assistant Attorney General Perez manipulating the process and advising and overseeing the communications between the City of St. Paul, the Department of Housing and Urban Development, and the Civil Division within the Department of Justice.
  • 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.”
  • Assistant Attorney General Perez made multiple statements to the Committees that contradicted testimony from other witnesses and documentary evidence. 
  • The ethics and professional responsibility opinions obtained by Assistant Attorney General Thomas Perez and his staff were narrowly focused on his personal and financial interests in a deal and his authority to speak on behalf of the Civil Division, and thus do not address the quid pro quo itself or Perez’s particular actions in effectuating the quid pro quo.
  • The Justice Department marginalized a whistleblower and reduced him to a “bargaining chip” in his own words to advance their agenda.

Darrell Issa issued a scathing statement at the time:

“After a year of investigation by three congressional committees, we have found that Mr. Perez inappropriately used a whistleblower as bargaining chip and passed on an opportunity to collect $200 million for taxpayers,” said Issa. “This occurred as part of a deal he arranged to ensure an ideological pet policy of the Obama Administration would avoid Supreme Court scrutiny.  In addition, Perez took steps attempting to cover-up his involvement in the quid pro quo and offered numerous misleading statements to investigators that are contradicted by the evidence.  Mr. Perez’s conduct has stained the integrity of the Justice Department and created serious doubt about its commitment to protecting the legal rights of whistleblowers who come forward with legitimate information about abuses of taxpayer funds.”

As Chuck Grassley noted in an uncharacteristically blistering speech opposing Perez’s nomination, after laying out the evidence of Perez’s conduct leading up to the quid pro quo deal with St. Paul: 

 Mr. Perez offered to provide the other side with information that would help them defeat Mr. Newell in this case on behalf of the United States. In my opinion, this is simply stunning.  Mr. Perez represents the United States.  Any lawyer would say it is highly inappropriate to offer to help the other side defeat their own client. 

As it turned out, Perez faced no consequences for any of this, and disparate impact was ultimately upheld 5-4 in 2015, thanks to Justice Kennedy, over a blistering dissent by Justice Thomas that traced the origins of the doctrine all the way through Perez as being rife with misleading conduct by the government and its lawyers.

Meet the new boss, Democrats. Same as the old boss.

Dan McLaughlin is an attorney practicing securities and commercial litigation in New York City, and a contributing columnist at National Review Online.

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