Our friends at the Wall Street Journal didn't get much cooperation from the various individuals mentioned in its editorial this week concerning the curious case of Thomas Perez, President Barack Obama's nominee to be his second-term labor secretary.
The Journal maintains that Mr. Perez, now head of the Justice Department's Civil Rights Division, “strong-arm[ed]” St. Paul, Minn., to withdraw a case last year that was about to be heard by the U.S. Supreme Court.
Magner v. Gallagher challenged the notion, championed by Mr. Perez, that racial discrimination can be proven simply by looking at numbers, rather than actually ascertaining intent or examining cases.
As a quid pro quo for withdrawing its case, Mr. Perez promised the city of St. Paul that Justice would make two pending False Claims Act cases it was facing go away. That represented a potential savings to St. Paul of millions of dollars.
St. Paul acquiesced. It issued a press release explaining that if it prevailed in its Supreme Court case, “such a result could completely eliminate ‘disparate impact' civil rights enforcement.”
Mr. Perez won the day. So now banks that don't issue home loans in places like Orange County to minorities in proportion to their share of the population – no matter the reasons why – are at greater risk of disparate-impact judgments.
When the Journal contacted persons of interest both in St. Paul and Washington to get their sides of the story, it was met with a silence that doesn't speak well of the transparency the city of St. Paul promises its residents, nor the openness to which the Obama administration professes to be committed.
David Lillehaug, the attorney advising St. Paul on one of its two false-claims cases, known as Newell, “declined comment.” Mr. Lillehaug was a colleague of Thomas Fraser. Mr. Fraser was a former colleague of Mr. Perez. Mr. Fraser referred Mr. Perez to Mr. Lillehaug.
The city of St. Paul “did not respond” to questions about a February 2012 meeting among Mayor Chris Coleman, Deputy Mayor Paul Williams, City Attorney Sara Grewing and Mr. Lillehaug and Mr. Perez, his deputy and Eric Halperin. It is in that meeting the deal between Justice and the City of St. Paul was cut.
The Justice Department “didn't respond” to requests to speak to Mr. Perez. Left unanswered was why he “connected” Housing and Urban Development assistant secretary Sara Pratt with Mr. Lillehaug, after which HUD backed away from its recommendation that Justice join the Newell lawsuit against St. Paul.
President Obama lauded Mr. Perez as “a consensus-builder.” But if the consensus he built between Justice, HUD and St. Paul is a portent of what he would bring to Labor, we think him an unsuitable candidate for the post.