Did the DoJ play Let’s Make a Deal with St. Paul, MN?
posted at 9:21 am on September 28, 2012 by Ed Morrissey
Perhaps I’ve become inured to the politicization at the Department of Justice in this administration, where civil rights become bargaining chips for political appointees and everything is all about the ideological agenda. I first got tipped earlier this week to the strange deal cut between the DoJ and the capital of my state for each side to drop unrelated lawsuits against the other, which sounded more like Beltway Business as Usual than a scandal. However, four Republicans on Capitol Hill, including Senator Charles Grassley and House Oversight Chair Darrell Issa, want some answers from Eric Holder and Civil Rights Division chief Thomas Perez:
Four Republican lawmakers have accused the Justice Department of inappropriately striking a deal with city officials in St. Paul, Minn., to drop an appeal in a Supreme Court civil rights case in exchange for the federal government abandoning its support for a separate lawsuit against the city.
In a letter to Attorney General Eric H. Holder Jr., Sen. Charles E. Grassley (Iowa) and three House members said that Justice officials struck a quid pro quo in February with St. Paul officials to withdraw a housing discrimination case before the Supreme Court in exchange for Justice declining to intervene in an unrelated False Claims Act case against the city. …
“We were shocked to learn during this briefing and in subsequent document examination that Assistant Attorney General Tom Perez, over the objections of career Justice Department attorneys, enticed the city to drop its lawsuit that Mr. Perez did not want decided by the Supreme Court,” wrote Grassley and Reps. Darrell Issa (Calif.), Lamar Smith (Tex.) and Patrick T. McHenry (N.C.).
Sound familiar? Perez overruled career officials in the CRD to dismiss a voter-intimidation case against two members of the New Black Panther Party that the DoJ had already won. In one of the cases Perez bargained away, a local businessman claimed that Minnesota was fraudulently claiming to be using federal funds to create low-income jobs for all applicants, but instead only doing so for minority applicants. The career attorneys involved considered it a “particularly egregious violation” of federal certification laws, and wanted to make a point about enforcement.
So why did Perez trade it away? The four Republicans note that the lawsuit from St. Paul involved claims of federal overreach on housing discrimination law, and that the Supreme Court was widely expected to take their side:
On February 10, 2012, the City of St. Paul abruptly abandoned a case before the U.S. Supreme Court that observers said it was poised to win. Slumlords had sued the city to prevent it from enforcing its housing code on the grounds that it disproportionately decreased the amount of housing available to minorities. The City argued that the Fair Housing Act of 1968 (FHA) prohibits only intentional discrimination, not neutral practices like code enforcement that happen to impact particular groups disproportionately.
Mr. Perez fretted that a decision in the City’s favor would dry up the massive mortgage lending settlements his Division was obtaining by suing banks for housing discrimination based on disparate effects rather than any proof of intent to discriminate. Accordingly, as documents reviewed by Committee staff show, he orchestrated a deal to induce the City to drop its Supreme Court challenge. In exchange for St. Paul dropping its case before the high court, the Justice Department declined to intervene in an unrelated False Claims Act (FCA) case that had the potential to return over $180 million in damages to the U.S. treasury.
Many observers thought the Supreme Court was poised to hold that the FHA does not permit claims based on disparate impact when it agreed, in late 2011, to hear Magner v. Gallagher. However, on the eve of oral argument, St. Paul dropped the case. News accounts attributed the reversal to calls from the Administration and former Senator Walter Mondale who called the decision “courageous.” However, material reviewed by the Committees reveals the decision was in fact the result of a dubious bargain brokered by Mr. Perez in which the Department agreed, over the objections of career attorneys, not to join an unrelated fraud lawsuit against the City in exchange for the City’s dropping its Magner appeal.
In other words, Perez was happy to have St. Paul continue to commit fraud as long as they didn’t interfere with his power to impose DoJ will in housing decisions in which the federal government has no real authority.
Is this a scandal? The letter from the four Republicans say that the DoJ acknowledged that the deal was without precedent. It should be a scandal, but unfortunately, politicization at the DoJ interests the media a lot less when a Democrat is in the White House.
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