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Grassley Raises Objections to Obama’s Potential Labor Secretary Nominee

Sen. Charles E. Grassley, R-Iowa, fired a preemptive warning shot to the White House over the weekend in response to media reports that President Barack Obama intends to nominate Thomas Perez, assistant attorney general for civil rights at the Justice Department, as the next Labor secretary.

As ranking member of the Senate Judiciary Committee, Grassley is spearheading a GOP investigation into an alleged deal that the Justice Department struck with the city of St. Paul, Minn., in which the city withdrew from a Supreme Court lending discrimination case in exchange for the federal government agreeing not to join a pair of housing-related False Claims Act lawsuits against the city that were instigated by a whistle-blower. Republicans contend the suits had the potential of returning more than $180 million in damages to the Treasury.

“It’s hard to believe that the president would nominate somebody at the heart of a congressional investigation and so deeply involved in a controversial decision to make a shady deal with the city of St. Paul, Minnesota,” Grassley said in a statement Sunday. “Not to mention the fact that he’d be handed the keys to the whistleblower kingdom at the Labor Department. I shudder to think how whistleblowers will be treated in the Labor Department if this quid pro quo with St. Paul is any indication of Mr. Perez’s approach to this important area of law.”

“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 added.

A GOP aide told CQ Roll Call on March 1 that the committee had received more than 1,000 pages of documents on the matter and was in the process of setting up interviews with Perez and several other DOJ officials, which will be conducted by Grassley and members of both the House Judiciary and Oversight and Government Reform committees.

According to The Associated Press, the St. Paul case had challenged the use of statistics to prove race discrimination under the Fair Housing Act, and Justice Department officials were concerned the Supreme Court could strike down the practice.

The White House declined to comment Sunday on reports by the Wall Street Journal, Washington Post and Associated Press that Obama is close to nominating Perez to succeed former Labor Secretary Hilda L. Solis, who resigned in January. Other lawmakers on both sides of the aisle also declined to comment Sunday on Perez’s potential nomination.

Perez was sworn in to his current position in October 2009. Before that, he served as the secretary of Maryland’s Department of Labor, Licensing and Regulation. He is credited as the principal architect of an overhaul of lending practices that addressed the foreclosure crisis in Maryland. He was the first Latino elected to the Montgomery County Council, where he served from 2002 to 2006.

Perez also has held posts as deputy assistant attorney general for civil rights under Attorney General Janet Reno; special counsel to the late Sen. Edward M. Kennedy, D-Mass., as his principal adviser on civil rights, criminal justice and constitutional issues; and director of the Office for Civil Rights at the Health and Human Services Department under President Bill Clinton.

The AFL-CIO and Service Employees International Union wouldn’t comment on the nomination because the White House hasn’t made it official. But an SEIU spokeswoman said, “Mr. Perez would probably be a good choice as he was formerly Maryland’s labor secretary, worked for Sen. Kennedy on immigration, among other things, and is a good administrator on most issues.”

Another potential area of controversy for Perez if he is nominated is his involvement at the Justice Department in challenging state voter ID laws last year that could have restricted minority voting rights.

Even before Perez’s name was floated, it had been anticipated that any nominee for Labor secretary could spark a fight on Capitol Hill, where numerous partisan battles have erupted over labor issues. During the 112th Congress, Republicans in both chambers pursued unsuccessful efforts to restrict the authority of the National Labor Relations Board. For instance, the Senate last April blocked consideration of a GOP-sponsored resolution disapproving of an NLRB rule that would speed votes by workers to form or join unions.

Republicans were livid after Obama in January 2012 made three NLRB recess appointments, which the U.S. Court of Appeals for the District of Columbia ruled in January were unconstitutional. Though the president renominated two of the members last month, the court ruling hasn’t stopped the board from continuing its operations as normal. Republicans in both chambers have introduced legislation to prohibit the board from enforcing or implementing decisions and regulations.

Humberto Sanchez contributed to this report.