Grassley Asks Civil Division Deputy to Explain ‘Contradictory’ Statements on St. Paul Case
By Mary Jacoby | March 26, 2013 10:13 pm

As Republicans gear up for aggressive questioning of Labor Secretary nominee Tom Perez, Senate Judiciary Committee ranking member Charles Grassley is asking a top Justice Department official to explain statements she made about a case that will feature prominently in Perez’s nomination hearing.

Joyce Branda

Joyce Branda, the Deputy Assistant Attorney General for the Commercial Litigation branch in the department’s Civil Division, gave a briefing to Judiciary Committee staff in February about the circumstances surrounding the dismissal last year of a Supreme Court case that threatened to weaken a federal housing anti-discrimination law, the Fair Housing Act.

Grassley said in a letter to Branda today that her statements were “directly contradictory” to email documentation later provided by the Justice Department.

Grassley and other Republicans have alleged the Justice Department struck a “quid pro quo” with the city of St. Paul, in which Justice agreed not to join a whistleblower lawsuit against St. Paul in exchange for the city withdrawing its petition for Supreme Court review of the Fair Housing Act.

The matter has drawn increased scrutiny because Perez heads the Civil Rights Division at Justice, which is responsible for enforcing the housing anti-discrimination law. Grassley and other Republicans accuse him of orchestrating the alleged “quid pro quo.”

The Supreme Court case

At issue is a case, Magner v. Gallagher, that was slated to be argued before the Supreme Court in early 2012 but which was withdrawn by agreement of both sides.

The city of St. Paul had sought the top court’s review of local governments’ obligations under the federal Fair Housing Act — specifically whether local governments could enforce housing codes that resulted in an unintentional negative impact on minorities.

Local landlords in St. Paul had sued the city for what they termed aggressive and selective enforcement of housing codes, arguing that St. Paul’s real aim was to raise housing prices and force out low-income, mostly minority renters in favor of higher-income homeowners.

The federal government had joined the case to defend the right of minorities to bring “disparate impact” claims under the statute. An adverse ruling from the court might have threatened those rights. (For background on the Justice Department’s point of view, see Adam Serwer’s recent article in Mother Jones.)

In the February briefing for Judiciary staff, Branda said the Justice Department “didn’t decline to intervene” in the False Claims Act case in “exchange” for St. Paul withdrawing its Supreme Court petition, according to Grassley’s letter.

But Grassley said Branda received an email on March 8, 2012 from Michael Granston, then Deputy Director in the Commercial Litigation Branch’s Fraud Section, which described matters including the St. Paul case. Branda then forwarded the email 25 minutes later to Jonathan Olin, a political appointee in the Civil Division, writing, “St. Paul updated and edited for clarity[.]”

The relevant portion of the email read, according to Grassley: “Government declined to intervene in Newell, and has agreed to decline to intervene in Ellis, in exchange for defendants withdrawal [sic] of cert. petition in Gallagher case (a civil rights action).”

The whistleblower lawsuit

The Newell case is a whistleblower lawsuit under the False Claims Act filed by Frederick Newell, who alleged the city of St. Paul misused Department of Housing and Urban Development job assistance funds. Newell’s lawyer recently told Bloomberg that Justice originally had agreed to join the lawsuit – which would greatly have increased its chances of success — but later reneged. The suit was dismissed, and Newell lost his chance for a whistleblower reward that could have paid him millions of dollars. Newell has appealed.

The Ellis lawsuit was a similar matter.

“Documents clearly show that at the time of the briefing, the department was well aware of the ‘exchange’ between the Justice Department and the city of St. Paul,” Grassley said in a statement.  ”It makes me wonder whether Ms. Branda was instructed by higher-ups not to call the deal an ‘exchange’ when she briefed Judiciary Committee staff.”

Congressional concerns

In Congress, both House Judiciary Chairman Bob Goodlatte (R-Va.) and House Oversight Chairman Darrell Issa (R-Calif.) are also investigating the matter.

Perez’s confirmation hearing is slated for April 18 before the Senate Health, Education, Labor and Pensions Committee. Sen. Pat Roberts, a Kansas Republican on the panel, told Bloomberg the alleged “quid pro quo” would get scrutiny.

“It’s of real concern to us, and it’s one thing in a long list of things where we think this person is ill-advised,” Roberts said.

“If Mr. Perez is nominated, he should face a lot of tough questions about this quid pro quo deal he appears to have put together, the decision to drop the False Claims Act case against St. Paul, and how he recommended the government’s help in targeting the whistleblower in this case,” Grassley said in a statement following Perez’s nomination.

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