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.[2]  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.[3]  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.[4]

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.[5]  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.[6]  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.”[7]  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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The Cowardly Liar Holder and “his” people are at it again.

Flange on September 28, 2012 at 9:25 AM

They actually NEED “unintentional racism” to exist in order to justify their power.

That just proves to me what I have always suspected. There is very little real racism in this country. It has all become institutionalized now.

Mord on September 28, 2012 at 9:31 AM

Most ethical evah.

hoakie on September 28, 2012 at 9:31 AM

Quid pro quo“…not just for Romans anymore.

coldwarrior on September 28, 2012 at 9:35 AM

MSM their reputation and ethical leadership gone. Soon they will be gone. Journalists have made themselves less relevant than The End of The World guy on a street corner. Nobody is listening or believes anything they say anymore. “GAME OVER, MAN !

stormridercx4 on September 28, 2012 at 9:35 AM

This issue would seem to go to the heart of the banking debacle. Banks were forced to give mortgages to unqualified individuals who later, predictably, defaulted.

A ruling in favor of St Paul’s uniform application of the housing code would have likely translated into a the ability to similarly apply mortgage application criteria uniformly, regardless of disparate impact on various minority or special interest groups.

STL_Vet on September 28, 2012 at 9:35 AM

It should be a scandal

Ed, the last 4 years seem to be amounting to one big scandal…

Gatsu on September 28, 2012 at 9:39 AM

There are no scandals in the Obama Administration. As long as the Obama Phones keep working and the checks keep coming.

Curtiss on September 28, 2012 at 9:39 AM

This was an extremely important FHA case which could have challenged the assumption that FHA prohibits “disparate impact” discrimination.

Conservative in NOVA on September 28, 2012 at 9:40 AM

Eric the with-Holder should be perp-walked out of the DOJ to the slammer.

It really chaps me that Alberto Gonzales was hounded out of office for firing a handful of US Attorneys -Political appointees that serve ‘At the pleasure of the President’- while this POS dismisses cases of clear voter intimidation, heads up an operation that sends thousands of guns to Mexican drug cartels, and makes dirty deals with dirty politicians.

DC will have to be fumigated to remove the stench of these crooks after they’re thrown out!

Dexter_Alarius on September 28, 2012 at 9:40 AM

My Outraged Meter shorted out weeks ago.

BigGator5 on September 28, 2012 at 9:42 AM

How many other of these ‘deals’ has the DOJ made in the last 4 years that has perverted justice? Notice how it is the slumlords who got the protection. Do they have a club they belong to with the slumlords in the WH so they can discuss strategery? 39 Days!

Kissmygrits on September 28, 2012 at 9:44 AM

Even Ed is starting to coming around. Every aspect of this Admin. is crooked,corrupt and without Shame.

Offhanded on September 28, 2012 at 9:44 AM

It’s a HUGE scandal and I thank Ed for covering it.

There is NO legal authority in the Fair Housing Act for the government to bring a discrimination case based on disparate impact. NONE. Even the Clinton Administration understood this and never attempted such a claim. This would have been another 9-0 smackdown by the Supreme Court.

Disparate impact claims in lending are brought solely based on statistical analysis of loan files. In this case, DOJ is bringing ex post claims based on a legal theory that was not in play when the loans were made, and they use statistical models which are not made public and not known to the lender until the suit is filed. Lenders are being accused falsely of discrimination, which is a giant reputational risk that no bank wants to accept. So they are all settling these cases and not going to trial, even though they would probably win. Some of the settlement money is going to ACORN-type community organizations, too.

This is nothing more than a shakedown operation against banks. The government is not trying to force them back into making bad loans to poor credit risks, it is simply suing them to get large monetary settlements, based on a legal theory that is not authorized at all by the law.

rockmom on September 28, 2012 at 9:47 AM

In the Obama Administration, that’s a feature, not a bug.

stoutcat on September 28, 2012 at 9:49 AM

If only this Holder clown would simply fire some federal attorneys, then, perhaps, Congress would demand his head on a plate…

locomotivebreath1901 on September 28, 2012 at 9:53 AM

Obama and Holder, together, are twin terrors (sort of like having Jason Voorhees and Michael Myers in one movie) ripping the guts out of America.

MaiDee on September 28, 2012 at 9:57 AM

Read about this in the WSJ yesterday. Like Ed, I’m becoming immune to outrage over crap like this and it scares me. I’ve come to expect this.

Anyone else getting a powerless feeling?

Red Cloud on September 28, 2012 at 10:03 AM

Transparent as a sheet of lead.

Bishop on September 28, 2012 at 10:07 AM

If obama had a son, he would be eric holder…..cut from the same cloth

crosshugger on September 28, 2012 at 10:09 AM

It’s all about fairness. Minorities have no equal opportunity to live, get an education, work, save, succeed. When I was born, the hospital matched me up with a nice black kid born the same day and I’ve been actively holding him down and preventing him from getting a college degree or a job ever since. He’s in a crackhouse right now. My job is done for today. There’s a liquor store and Kennedy Fried Chicken right down the street. Yum, lunch.

smfic on September 28, 2012 at 10:19 AM

Cleaning house at the DoJ is the most important reason that Obama must lose. (Although, foreign policy is getting to be right up there with DoJ in terms of Obama disaster levels.)

besser tot als rot on September 28, 2012 at 10:26 AM

We live in a banana republic.

BuckeyeSam on September 28, 2012 at 10:27 AM

Remember, Perez is the guy who, in Congressional hearings, refused to say that the DOJ would never diddle with the 1st Amendment.

a capella on September 28, 2012 at 10:36 AM

rockmom on September 28, 2012 at 9:47 AM

Everything Jesse Jackson taught them is now official policy and strategy.

Difficultas_Est_Imperium on September 28, 2012 at 10:36 AM

Liberals, more like Taliban every day.

Speakup on September 28, 2012 at 10:55 AM

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.

And now Babs Boxer wants DoJ to look into “intimidation” in Ohio by the Tea Party for supposed “voter intimiation” by ensuring people are correctly resgistered, i.e. making sure that they are supposed to vote. The black panthers were standing there with sticks, with one democrat saying it was the worst case he has ever seen.

This type of intimidation must stop. I don’t believe this is “True the Vote.” I believe it’s “Stop the Vote.”

The right to vote has been the result of a long and difficult struggle in America. It has taken generations to ensure full voting rights for minorities, women, and young people. No group can be allowed to intimidate or interfere with this fundamental right that is essential for American democracy.
The Voting Rights Act of 1965 and the National Voter Registration Act of 1993 prohibit persons from knowingly and willfully intimidating or attempting to intimidate, threaten or coerce another person for voting, attempting to vote, or registering to vote.
Please let me know if you are investigating voter suppression incidents such as the type described in the Los Angeles Times and the steps you are taking to enforcing voting rights laws across the country to ensure free and fair elections.


Yes, but it is your side that is doing the intimidating. Maybe you should be asking the DoJ about that.

Patriot Vet on September 28, 2012 at 11:15 AM

Even Ed is starting to coming around. Every aspect of this Admin. is crooked,corrupt and without Shame.

Offhanded on September 28, 2012 at 9:44 AM

…a lot of what Ed and the writers here write about…I don’t see looking at my regular news sources…and most of America would have no idea of how corrupt these ’emperors’ really are. There’s no “coming around” here!

KOOLAID2 on September 28, 2012 at 11:19 AM

Nice city youze got der. *knuckle-crack* Hate ta see anyting happen to it.

GWB on September 28, 2012 at 12:35 PM

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.

Stop being nice to your colleagues, Ed. Democrat scandals don’t interest the MSM at all when a Democrat is in the White House.

woodNfish on September 28, 2012 at 12:42 PM

I don’t see the problem. Sounds like They got them to drop a suit about the DoJ discriminating in return for dropping one about them discriminating. Isn’t discrimination a good thing?

OBQuiet on September 28, 2012 at 12:53 PM

This is the most corrupt administration in my memory and my lifetime—and my memory goes back to Truman. Obama makes Lyndon Johnson look like a Sunday School teacher.

If our justice system still worked, half this administration would be in jail. If our news media worked, the President would be impeached.

How many times has my outrage meter exploded in the last four years? Too many. It’s a miracle I’m still alive.

Portia46 on September 28, 2012 at 1:16 PM

Recently Ed has really had an eye opening experience, what with the Bengahzi consulate/Ambassador murder/ crooked and defiant pollsters, NBC editing , etc. and has been near to Anger on T.E.M.S., over the arrogance and belittling of the Dead, by this outlaw Regime. Wellcome Aboard Cap’n!

Offhanded on September 28, 2012 at 1:47 PM

Seen, but not yet confirmed… over the shoulder of Eric Holder on his smartphone e-chat……

“Bro, You scratch my back I’ll scratch yours, afterwards… we’ll head to the bar and drink to our success of our redistribution of justice immediately following”.

ActinUpinTexas on September 28, 2012 at 3:19 PM

DOJ scoring with the sycophants.

Free phones, and now approved corruption in federal programs that benefit…the sycophants.

This is how wealth is re-distributed.

BobMbx on September 28, 2012 at 4:40 PM

We live in a banana republic.

BuckeyeSam on September 28, 2012 at 10:27 AM

How far are we from Brazilian and burning tire neckties?

BobMbx on September 28, 2012 at 4:43 PM