The Perez Stonewall
The Labor nominee is still defying a House subpoena.
WSJ Editorial, May 8, 2013
Plans to vote Wednesday on Thomas Perez's nomination for Labor Secretary, and indications are that Democrats will ram him through on a party-line vote. Republicans may not be able to defeat him, but we hope they take the time to educate the public about Mr. Perez's flagrant abuse of his legal powers in his current job at the Justice Department.
As we've chronicled in several editorials, Mr. Perez convinced officials in the city of St. Paul, Minnesota to withdraw a case from the U.S. Supreme Court docket that it had spent almost a decade litigating. A ruling would have clarified a dubious interpretation of antidiscrimination law that Mr. Perez was using to extract multimillion-dollar settlements from banks. In a quid pro quo, Mr. Perez lobbied his Administration colleagues to overrule career employees and decline to join two False Claims Act cases against St. Paul.
Mr. Perez doesn't deny his unprecedented intervention, but he told the Senate last month that it was justified because "bad facts made bad law." More accurately, the facts of the St. Paul case might have blown away his legal agenda.
Bad facts should also disqualify Mr. Perez from the Cabinet position, especially given that many of his statements have been contradicted by documents and testimony by other officials during a year-long House investigation.
For instance, Mr. Perez told the Senate that Mike Hertz, a career Justice attorney with False Claims Act experience, thought the false claims case known as Newell was "a weak case and a weak candidate for intervention." Yet documents show that Hertz was concerned Mr. Perez was "buying off" St. Paul. He contacted Elizabeth Taylor, an attorney reporting to Justice's then number-three, Associate Attorney General Thomas Perrilli, with his concerns about the deal. Hertz has since died.
Newell, which could have netted as much as $200 million for taxpayers, was not a "weak case." The U.S. Attorney's Office in Minnesota, the Department of Housing and Urban Development and Justice staff attorneys in the Civil Division were all enthusiastic about pursuing the case.
Last week, HUD Associate General Counsel Dane Narode revealed that the Minnesota U.S. Attorney's Office composed a Powerpoint presentation and, together with Justice's Civil Division, presented the merits of the Newell case to HUD before Mr. Perez got involved.
We've reviewed the presentation, which lists the allegations against St. Paul. As plaintiff Fredrick Newell has testified to investigators, the city was directing funds to women-led and minority businesses, not to low and very-low income residents as federal law required. Justice agreed in the presentation, noting that St. Paul had "failed to substantially comply" with its obligations.
Mr. Perez also misled Congressional investigators by saying on March 22 that he didn't have any "recollection" of using his personal email to communicate about the quid pro quo. Using personal email for public business violates the Federal Records Act, and evidence later turned up that Mr. Perez had used his personal email concerning the St. Paul cases.
Congress issued a subpoena on April 10. On April 17, Justice admitted that Mr. Perez had used his verizon.net account for official business 34 times but explained he had forwarded or copied "the vast majority" of such communications to his government email account. Mr. Perez hasn't turned over those emails.
When Senator Orrin Hatch asked about the subpoena during the confirmation hearing, Mr. Perez responded that he had provided a "responsive letter" and "people came over to the department to review documents." Well, no. Congressional investigators didn't get to review about 1,200 email communications that are subject to the subpoena. In a letter to Mr. Perez Monday, Congressman Darrell Issa called Mr. Perez's "continued and blatant disregard" for the subpoena "extremely disconcerting."
It's really a political stonewall. Mr. Perez is betting that Democrats will wave him through the Senate and that the Beltway press corps will continue to give him a pass. That leaves GOP Senators, who will have to decide if they want to confirm a nominee who interfered with the Supreme Court docket, abandoned a whistleblower case contrary to the advice of career Justice attorneys, and continues to defy a Congressional subpoena. He ought to be fired, not promoted.