Legal Experts Debunk Right-Wing Media Accusations Of Labor Nominee's "Shady Quid Pro Quo"

Blog ››› ››› SERGIO MUNOZ

Right-wing media continue their relentless campaign to undermine the Labor Secretary nomination of Thomas Perez, pushing the baseless claim that he acted unethically in his involvement with a withdrawn Supreme Court case that could have undone decades of civil rights precedent.

The Wall Street Journal and the National Review Online have been at the forefront of allegations, most recently made by the WSJ on May 6, that Perez perpetuated a "shady quid pro quo" with the City of St. Paul, Minnesota, because of his involvement in deliberations that resulted in a withdrawn Supreme Court case, Magner v. Gallagher, and the decision of the Department of Justice to not intervene in an unrelated False Claims Act lawsuit.

By holding a surprise hearing for the "whistleblower" who initiated the False Claims Act case against St. Paul, Congressional Republicans have used the allegations that something "awfully suspicious" occurred to push back Senate mark-up of Perez's nomination until May 8. The "whistleblower," a small business owner named Frederick Newell, may have lost a sizeable sum of money he could have been awarded if DOJ had intervened. As explained by Mother Jones, "given all the hard work he put in, it's understandable he's ticked off at Perez. But the fact that Newell didn't get his money doesn't mean Perez did anything improper."

Indeed, it's unclear if Newell could have won even if DOJ had joined the case. DOJ's top expert on these sorts of claims, Deputy Assistant Attorney General Michael Hertz, determined the case was weak, reportedly deciding "this case sucks" and to not intervene. The Magner case at the other end of this "quid pro quo," however, was of far greater significance.

Because Magner had the potential to present yet another opportunity for the conservative Justices to dismantle long-standing civil rights precedent, advocates ranging from civil rights attorneys to former Vice President Walter Mondale joined the DOJ in requesting St. Paul drop its appeal that had brought the case to the Supreme Court. In a recent op-ed for Politico, Wade Henderson, president and CEO of The Leadership Conference on Civil and Human Rights, explained the stakes:

As any lawyer knows, bad facts make bad law. This adage aptly applies to a fair housing case involving the city of St. Paul, Minn., that is now being unfairly used to tarnish the integrity of Tom Perez[.]


What made [Magner] so unusual was landlords' claim that by enforcing housing codes against them the city was committing a civil rights violation under the Fair Housing Act. Their argument was that bringing their buildings up to code would cost too much money, cause them to dispose of the properties and thus, affect the access of their minority tenants to housing. The district court dismissed the landlords' claims, but they prevailed on appeal.

This case represented a real threat to established civil rights laws that have protected millions of Americans from discrimination. It would be a real threat to the integrity of the Fair Housing Act if these landlords could use it to keep tenants in squalor.


St. Paul's mayor, Chris Coleman, was working with Perez on this issue and on an unrelated False Claims Act case against the city. The false claims case was relatively weak, and the Justice Department chose to dismiss it. During this same period, I was among the civil rights advocates who initiated conversations with the mayor to ask if he would withdraw the city's Supreme Court appeal in the landlords' case. Coleman's public interest background and commitment to preserving the Fair Housing Act made him uniquely sympathetic to our concerns. After due deliberation, the city dropped its Supreme Court appeal.

When Perez joined civil rights experts such as Henderson warning St. Paul about the dangers of their Supreme Court case while he simultaneously weighed avoiding the unrelated False Claims Act case against the city, he specifically sought counsel with experts as to the propriety of these interactions.

As detailed in a Democratic Staff memorandum on the GOP-initiated investigation into this matter, to verify Hertz's damning assessment of the False Claims Act case, Perez consulted with top officials at DOJ and the U.S. Department of Housing and Urban Development who concurred with the evaluation. To verify that declining to intervene in this weak case was ethical, regardless of whether or not St. Paul withdrew Magner, Perez consulted with DOJ professional responsibility and ethics officers who concluded that "there is no ethics rule implicated by this situation and therefore no prohibition against your proposed course of action."

Accordingly, despite right-wing media's attacks on Perez, this alleged "quid pro quo" is nothing more than a unitary actor - the United States - permissibly making a decision on two separate issues in its best interests, as determined by its lawyers. Outside ethics experts agree.

From the May 6 statement of top legal ethics expert Stephen Gillers, a New York University Professor of Law:

The [Republican-authored] Joint Staff Report argues that linking the two cases...was unethical. However, it cites no professional conduct rule, no court decision, no bar ethics opinion, and no secondary authority that supports this argument. In fact, no authority supports it.


Of course, it is legitimate to argue that Perez, [Assistant Attorney General Tony] West, and others made the wrong choice and that pursuing [the False Claims Act case] was more important to U.S. interests than how the Supreme Court would ultimately resolve the issue in Magner. I have no view on that question. It is not an ethical question. The question I can answer is whether Perez could ethically make the decision he did and which he encouraged others to accept. Could he ethically decide, when faced with a situation where only one of two possible choices could be made, and where each choice offered a benefit to his client, to choose option A over option B?

The answer is unequivocally yes. Perez was not choosing to advantage one client over another client. There was no conflict here between the interests of two clients because there was only one client. That client, we are assuming, had two interests - withdrawal of Magner or intervention in [the False Claims Act case]  - but under the circumstances, it could pursue only one. Perez made a choice between these options and encouraged others to agree. His conduct violates no ethical rule that governs lawyers. He was acting in what he believed to be the best interests of his client, which is what lawyers are required to do.

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