Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee, continued his dogged investigation of the Justice Department, sending a letter this week to Attorney General Eric Holder alleging that an assistant attorney general engaged in a “quid-pro-quo” scheme with the city of St. Paul, Minnesota. The official allegedly agreed to drop a case against the city if it would drop a case it had that was likely headed to the Supreme Court.
Why did the the DOJ assistant attorney general care about St. Paul’s SCOTUS case so much? Because if the city won, it would have undermined his efforts to obtain settlements from banks by alleging housing discrimination under the theory of “disparate impact.” That’s the theory that discrimination can be proven merely by showing whether a policy disproportionately affects minorities.
Issa’s letter explains:
The City [of St. Paul] argued [in its case before the Supreme Court] 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.
[Assistant Attorney General Tom] 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. 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.
Issa notes that not only was this an unprecedented use of authority by Perez according even to DOJ officials, but that it deprived taxpayers of $180 million of revenue. “[H]e bargained away a valid case of fraud against American taxpayers in order to shield a questionable legal theory from Supreme Court scrutiny in order to keep on using it,” Issa writes.
Issa has demanded that Perez and others be made available for interviews with the committee. The Justice Department has not yet responded, committee spokeswoman Becca Watkins told the Examiner.
A DOJ spokesman could not be reached for contact.