The lawmakers said they found out about the alleged deal during a private briefing with Justice officials.
“We were shocked to learn during this briefing and in subsequent document examination that Assistant Attorney General Tom Perez, over the objections of career Justice Department attorneys, enticed the city to drop its lawsuit that Mr. Perez did not want decided by the Supreme Court,” wrote Grassley and Reps. Darrell Issa (Calif.), Lamar Smith (Tex.) and Patrick T. McHenry (N.C.).
Justice spokeswoman Tracy Schmaler said in a statement that “the resolution reached in these cases was in the best interests of the United States and consistent with the Department’s practice in reaching global settlements.”
“The decision was appropriate and made following an examination of the relevant facts, law and policy considerations at issue,” she added.
St. Paul City Attorney Sara Grewing said that the primary reason that the city dismissed its petition to the Supreme Court in Magner v. Gallagher was “to preserve 40 years of civil rights law.”
But Grewing also said that the Justice Department’s decision not to intervene in two lawsuits against the city was a factor. “When the city dismissed the Magner petition, the Department of Justice declined to intervene — and thus not oppose the city — in those two lawsuits,” she said in a statement.
Grewing added that the secondary reason for dismissing the petition on the eve of oral arguments was “to avoid conflict with the federal government in two pending lawsuits against the city that the city considered to be without merit.”
Justice’s decision not to be involved did not end the two lawsuits. One of them was brought by a businessman charging that St. Paul had falsely certified that it was using federal money to create jobs for low-income workers of all races when it was focused only on employing minorities.
In early October 2011, career lawyers from the Justice’s fraud section recommended that the federal government join the lawsuit, characterizing the city’s behavior as a “particularly egregious example” of false certifications, according to congressional investigators.
But in the letter, the lawmakers charged that Perez “bargained away a valid case of fraud against American taxpayers” to persuade St. Paul to drop its appeal in the civil rights case.
Perez could not be reached to comment, but a DOJ official said St. Paul officials raised a separate housing-related case with Perez when he was discussing the department’s concerns about the possible consequences of the Supreme Court case.
After the city officials brought up the businessman’s lawsuit, Perez consulted with the department’s ethics officials and was advised that there were no concerns, the Justice official said.
It is unclear whether Justice would have become involved in the lawsuit against the city in the end because the department does not intervene in almost 80 percent of false-claim civil cases, the Justice official said.