The chairmen of the U.S. House Committee on Oversight and Government Reform and the House and Senate judiciary committees allege that the U.S. Department of Justice enticed the city of St. Paul to drop a lawsuit headed to the Supreme Court in exchange for not pursuing two lawsuits filed against the city.

Civil rights and housing advocates along with former U.S. Vice President Walter Mondale was among those who lobbied St. Paul to back out of the Supreme Court case Magner v. Gallagher, because they were worried that a win in the case would strip protections for minorities in the federal Fair Housing Act.

But four Congressional Republicans say an offer from Assistant U.S. Attorney General Tom Perez to let the city off the hook on two housing-related lawsuits sealed the deal. In a letter addressed to U.S. Attorney General Eric Holder on Sept. 24, the congressmen say Perez, "enticed the city to drop its lawsuit that [he] did not want decided by the Supreme Court."

"One of the features of this quid pro quo, distinguishing it from a standard settlement or plea deal, was that it obstructed rather than furthered the ends of justice," the letter read, in part.

"[Mr. Perez] bargained away a valid case of fraud against American taxpayers in order to shield a questionable legal theory from Supreme Court scrutiny ..."

Now they are questioning the Justice Department's role in the decision. The congressmen have requested several attorneys from Holder's office to submit to transcribed interviews Friday. The Department of Justice has yet to respond to the letter.

The Magner v. Gallagher case pitted St. Paul against a group of mostly white landlords, who accused the city of racism for enforcing its housing code. The Supreme Court had agreed to the hear the case last November, with the focus on "disparate-impact analysis," a statistical method used to prove racial discrimination, and whether it could be used under the Fair Housing Act of 1968.

That led Mondale, the NAACP and other advocacy groups to weigh in on the case. If the Supreme Court had found disparate impact to be illegal under the Fair Housing Act, the ruling could have wiped away a tool that the Justice Department has often used to show that lenders are discriminating against minority borrowers.

The Supreme Court had already agreed to hear the case and the city thought it would win, before they abruptly asked that their petition be dismissed.

St. Paul City Attorney Sara Grewing issued a response to the congressional letter Tuesday that began: "... the primary reason the City of Saint Paul dismissed its petition to the United States Supreme Court in Magner v. Gallagher was to preserve forty years of civil rights law under statues such as the Fair Housing Act and the Equal Credit Opportunity Act."

The federal lawsuits the Justice Department agreed not to pursue could have cost the city as much as $180 million in damages if the plaintiffs won, the congressional letter indicated.

"This quid pro quo raises numerous legal and ethical questions of significant public interest," the letter said.

Here's a look at the letter sent to Attorney General Eric Holder and the response from St. Paul City Attorney Sara Grewing.

092412 Joint Letter to AG Holder

SG STMT 924 Letter

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