Grassley, Goodlatte and Issa Release Report: How Assistant Attorney General Thomas Perez Manipulated Justice and Ignored the Rule of Law

Press Release

By:  Bob Goodlatte Darrell Issa Chuck Grassley
Date: April 15, 2013
Location: Washington, DC

Today, House Oversight and Government Reform Committee Chairman Darrell Issa , House Judiciary Committee Chairman Bob Goodlatte and Senate Judiciary COMMITTEE Ranking Member Chuck Grassley released a joint staff report "Department of Justice's (DOJ) Quid Pro Quo with St. Paul: How Assistant Attorney General Thomas Perez Manipulated Justice and Ignored the Rule of Law". The report details how DOJ's civil RIGHTS division chief Thomas Perez made a secret deal with the City of St. Paul that ultimately prevented the Justice Department from recovering UP TO $200 million for taxpayers.

"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."

"Mr. Perez will have a lot of questions to answer this week as the Senate considers his nomination. I'm hard-pressed to understand why, with his engagement in this highly questionable activity, the President wants to promote him," Grassley said. "Not only was he the ring leader of the quid pro quo deal that ensured the taxpayer would not be able to recover hundreds of millions of dollars, but he has been misleading and less than forthcoming with our Committees and the U.S. Civil Rights Commission. And what's just as disappointing is the whistleblower he left out in the cold. These actions should give anybody pause."

"Mr. Perez overruled career attorneys and orchestrated a secret deal to block Supreme Court review of his Division's controversial legal tactics, said Goodlatte. "In exchange, the Justice Department agreed to abandon an unrelated fraud case worth as much as $200 million taxpayer dollars. Mr. Perez should face tough questions about this backroom deal he helped coordinate, his role in interfering with a Supreme Court case, and his mismanagement of the Civil Rights Division. His involvement in the quid pro quo arrangement casts doubt on his ability to lead and tarnishes the Department of Justice."

Key Findings:

*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.