GOP Lawmakers Blast Obama’s Labor Secretary Nominee for Misusing His Power

In a blistering report, Republican lawmakers sharply criticized Labor secretary nominee Thomas Perez over what they said was a questionable deal he brokered while serving as head of the Justice Department’s Civil Rights Division.

The 63-page report, issued Sunday after months of investigation, is certain to provide fodder for Republicans seeking to challenge Perez at his Senate confirmation hearing Thursday.

The GOP lawmakers accuse Perez of misusing his power last year to persuade the city of St. Paul, Minn., to withdraw a housing discrimination case before it could be heard by the Supreme Court. In exchange, the Justice Department agreed not to intervene in two whistleblower cases against St. Paul that could have won up to $200 million for taxpayers.

Perez has defended his reason for wanting St. Paul to drop its case, telling investigators that he feared an adverse ruling from the Supreme Court would jeopardize the government’s use of statistics to win housing discrimination cases. The Justice Department also says Perez got proper clearance and made the deal in the best interests of the nation.

But Republicans say the deal was dubious, that Perez misled senior officials about his intentions, and that he tried to cover up the true reason for his decision not to intervene in the whistleblower cases.

“This offer was inappropriate and potentially violated Perez’s duty of loyalty to his client, the United States,” said the report from Iowa Sen. Charles Grassley, California Rep. Darrell Issa and Virginia Rep. Bob Goodlatte.

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Top Democrats on the House Oversight Committee issued their own report on the investigation Sunday, writing that Perez “acted professionally to advance the interests of civil rights and effectively combat the scourge of housing discrimination.”

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The report also quotes the handwritten notes from one Justice lawyer who wrote after a January 2012 conference call: “Message from Perez. When you are working on memos make sure you don’t talk about Sup. Ct. case.”

But Democrats claim Perez was up front about using the strategy and cleared it with ethics and professional responsibility officials before it was finalized. Associate Attorney General Tom Perrelli told investigators it was common Justice Department practice to encourage parties not to pursue Supreme Court cases with poor fact patterns that could lead to adverse national interests.

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Federal law allows whistleblower cases alleging misuse of public funds to be brought by private parties. If they win, they can keep a percentage of the proceeds while the government gets the rest. The Justice Department intervenes in about 22 percent of federal whistleblower lawsuits, a move that can give the case a better chance of winning. The department has recovered more than $13 billion from such cases over the past four years, according to Justice Department statistics.

After the Justice Department declined to join the whistleblower cases against St. Paul, one of them was later dismissed. The second is still being litigated by a private plaintiff.