Washington, DC -- Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, and Rep. John Conyers, Ranking Member of the House Committee on the Judiciary, have issued a 26-page staff memo detailing the preliminary results of the Committees' joint investigation into the role of the Department of Justice in urging the City of St. Paul, Minnesota, to withdraw its appeal to the U.S. Supreme Court in Magner v. Gallagher.
This investigation was initiated when former Judiciary Committee Chairman Lamar Smith, Oversight Committee Chairman Darrell Issa, Representative Patrick McHenry, and Senator Charles Grassley accused Tom Perez, the Assistant Attorney General for the Civil Rights Division, of brokering a "dubious bargain" and a "quid pro quo arrangement" with St. Paul "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."
Below are select findings from the report based on documents produced to the Committees and transcribed interviews conducted by Committee staff to date:
* "Rather than identifying any unethical or improper actions by the Department, the overwhelming evidence obtained during this investigation indicates that Mr. Perez and other Department officials acted professionally to advance the interests of civil rights and effectively combat the scourge of discrimination in housing."
* "The evidence obtained by the Committee indicates that, by encouraging St. Paul to withdraw the Magner case, Mr. Perez was properly performing his role as head of the Civil Rights Division, effectively representing the position of the United States government, and advancing the national interest in combating racial discrimination in housing."
** Assistant Attorney General Tony West, head of Civil Division: "[T]here was a risk of bad law if the Supreme Court had considered this question, that it could undermine the disparate impact work in a very significant way. And, therefore, impair effective civil rights enforcement. And so it was a very important interest of the United States to try to minimize that possibility."
* "There was no dispute among the witnesses interviewed by the Committees that it was appropriate for Mr. Perez, as head of the Department's Civil Rights Division, to handle the Magner matter and contact St. Paul to urge the City to withdraw the case. During the course of this investigation, no witness interviewed by the Committees identified any improper or unethical action by Mr. Perez."
* "When St. Paul proposed linking its withdrawal of the Magner case to its request for the Department not to intervene in two unrelated False Claims Act cases, Mr. Perez sought and received approval from a DOJ ethics official, a DOJ professional responsibility official, and the head of the Civil Division before proceeding."
** Perez: "To address this concern my staff and I sought ethical and professional responsibility advice. I was informed that there would be no concern so long as I had permission from the Civil Division to engage in these conversations. I was also informed that because the United States is a unitary actor and entitled to act in its overall best interest, there was no prohibition on linking matters as Mr. Lillehaug had suggested.
** DOJ Ethics Officer: "Having reviewed the standards of ethical conduct and related sources, there is no ethics rule implicated by this situation and therefore no prohibition against your proposed course of action."
* "The decision not to intervene in the Newell case was made by Tony West, Assistant Attorney General for the Civil Division, based on the recommendation of then Deputy Assistant Attorney General Michael Hertz.
** "Mr. Hertz, who passed away in May 2012, had been a career employee of the Department for more than 30 years and was widely regarded as the Department's preeminent career expert on False Claims Act cases."
** West: "Mike Hertz was the undisputed expert on qui tam and False Claims Act in the Department of Justice. And that was his reputation.... the more he learned about the case, and the deeper he got into the case, the more doubtful he became about its worthiness as an intervention candidate, and came away from the impression that it was weak and that we should not litigate this case. That was very significant because when Mike spoke, you know, his opinion carried an enormous amount of weight within the Department, and within the Civil Frauds Section, appropriately so."
** Joyce Branda, Deputy Assistant Attorney General for the Commercial Litigation Branch at DOJ and former Director of the Fraud Section at DOJ, explained that "Mr. Hertz pulled her aside and told her 'this case sucks.'"
* "The evidence obtained by the Committees indicates that the Department openly and properly considered the Department's request to St. Paul to withdraw the Magner case as one of many factors it evaluated when deciding not to intervene in the Newell case."
** West: "I wanted to make sure that we employed our normal, regular process in assessing whether or not intervention was appropriate in this case, and that's what we did."
* "During her transcribed interview, Helen Kanovsky, HUD General Counsel, stated that it was not in HUD's interest to intervene in the Newell case because HUD had already entered into a Voluntary Compliance Agreement (VCA) with St. Paul, and the City was complying with that agreement."
** Kanovsky: "[T]hey, 'they' meaning Civil Frauds and the U.S. Attorney's Office, understood that I had reservations about proceeding, in large part because HUD had no equities in this issue any longer. All of our programmatic goals had already been met. We had a VCA. We were monitoring compliance with the VCA. There was compliance with the VCA."
** HUD Deputy Assistant Secretary for Enforcement and Programs Sara Pratt, a career official, confirmed: "HUD's programmatic concerns had been fully resolved with the VCA and other activities by the City of St. Paul."
* "The evidence obtained by the Committees indicates that Todd Jones, the U.S. Attorney in Minnesota, recommended against intervening in the Newell case after being informed that intervention would not serve HUD's interests."
** "Mr. Jones stated that he concurred with all of the recommendations in the final declination memo that was signed by Mr. West on February 9, 2012. As he explained, he agreed with 'all of the rationale, including the Magner v. Gallagher factor that was in the Civil - the Civil Fraud Division memo.'"
** "Greg Brooker, the career Chief of the Civil Division within the U.S. Attorney's Office, also concurred with the ultimate decision not to intervene, according to Mr. Jones."
** "During his transcribed interview, Mr. Jones, the U.S. Attorney, confirmed that the declination memo did include an appropriate discussion of the Magner case. He stated that no attorneys in his office reported feeling pressure to concur in its recommendation, and he characterized the recommendation as "based on the litigation risk and the facts in front of us."
* "The evidence obtained by the Committee demonstrates that the Department decided not to intervene in the Newell case even if St. Paul planned to go forward with the Magner case in the Supreme Court."
** "During his transcribed interview with Committee staff, Mr. West, the head of the Civil Division, explained that consensus had been reached in January 2012 that the Department would not intervene in the Newell case."
** West: "Our decision in the Civil Division is that we were not going to go forward and litigate the Newell case. That meant we were either going to decline it, and if the city was willing to withdraw its Magner petition because we declined it, that is great. But it looked like, at one point, that the City was no longer willing to do that. We still weren't going to litigate the case."
* "[T]he overwhelming evidence obtained during this investigation indicates that Mr. Perez and other Department officials acted professionally to advance the interests of civil rights and effectively combat the scourge of housing discrimination."
* "Rather than identifying any inappropriate conduct by Mr. Perez or other Department officials, it appears that the accusations against Mr. Perez are part of a broader political campaign to undermine the legal safeguards against discrimination that Mr. Perez was protecting.
