Executive Session

Floor Speech

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Mr. GRASSLEY. Mr. President, I rise in opposition to Mr. Orrick's nomination to be a District Judge for the Northern District of California and I would like to take a few moments to explain to my colleagues why I will be voting no.

Before I discuss the nominee, however, I will update my colleagues on where we stand with judicial confirmations. Thus far, the Senate has confirmed 187 District and Circuit nominees; we have defeated two. That's 187-2, which is a .989 batting average. That is an outstanding record.

So far this year, the Senate has confirmed 16 nominees. Today, if Mr. Orrick is confirmed, we will have confirmed the 17th nominee. At this stage in President Bush's second term only four were confirmed. That's a record of 17 to 4. This President is being treated exceptionally fairly.

The President has recently submitted a few new nominations. I know I have been reminding him that we can't do anything about vacancies without him first sending up nominees. But again, even with the recent nominations 61 of 85 nominations still have no nominee. That's nearly three out of four vacancies, and for judicial emergencies, only 8 of 35 vacancies have a nominee. So I just wanted to set the record straight before we vote on this nominee.

Again, I will be voting "no'' on Mr. Orrick's nomination. I was troubled by his intervention in Utah, Arizona, South Carolina, and Alabama. In those States he led the effort to strike down the statutes in those States addressing the Federal Government's failure to enforce immigration laws. We are in the middle of marking up a comprehensive immigration bill. It is clear that enforcement is a problem.

I, and some of my colleagues, would like to strengthen enforcement, but Mr. Orrick was out there leading the effort to maintain the weak status quo. I don't know why that should lead to a lifetime appointment on the Federal bench.

I was also disappointed by Mr. Orrick's responses to many of my questions at his hearing and in follow-up questions for the record. At his hearing, I asked him a number of questions that he said he could not answer at the hearing, but that he would familiarize himself with the issues. I offered to submit those questions in writing to provide Mr. Orrick the opportunity to answer them--a courtesy this Committee commonly extends to nominees in these circumstances.

After granting Mr. Orrick this courtesy, I was disappointed that he still failed to answer many of my questions. So I extended the courtesy a second time, offering Mr. Orrick the opportunity to provide a responsive answer to my earlier questions. Unfortunately, the ``answers'' he provided to my second set of questions were as non-responsive as the first.

Now, I understand that it is not unusual for nominees to claim they are unable to answer a particular question, but I must say that the degree of Mr. Orrick's non-responsiveness rose to a level well above what we typically see from nominees.

Moreover, just because a particular answer might be awkward for the administration that does not justify refusing to provide that answer.

Now, although there were a host of questions Mr. Orrick would not answer, I will provide just one example. In the hearing, I asked Mr. Orrick about a particular Ninth Circuit case and asked if it was controlling. This was in connection with a brief he filed opposing the Defense of Marriage Act. I thought he mischaracterized the precedent and wanted an explanation. At a minimum, I wanted to know if he had a basic knowledge of the precedent and recognized it as current law. He answered, ``I will follow controlling precedent wherever it exists.''

That is a clever answer, but of course, it doesn't answer the question. So in my written questions, I asked again if the Adams case was controlling precedent. He responded that he was reluctant to answer because a similar case could come before him.

This struck me as odd for two reasons. First, if confirmed, he would likely recuse himself from any case where he crafted a part of the Justice Department's policy or stance. And second, I wasn't asking for his personal views on the Adams case. I was trying to assess his legal ability. I want to know whether he will recognize that a particular case is controlling--even if he, or the administration for that matter, may not agree with it. That is what serving as a district court judge is all about: Applying controlling case law, whether or not you agree with the holding.

So I sent him a second set of questions for the record, and asked him again if Adams was controlling precedent. He still would not answer. The second time, Mr. Orrick agreed that he should recuse himself from such cases, but then reserved the right not to recuse himself. And, I still don't have an answer to my original question raised in the hearing: Does Mr. Orrick recognize Adams as controlling precedent in the Ninth Circuit?

Unfortunately, based on this and other aspects of Mr. Orrick's record that I find troubling, I cannot support his nomination.

Following graduation from Boston College Law School in 1979, Mr. Orrick began practicing law in Savannah, GA, at Georgia Legal Services, a general legal practice representing low-income individuals in litigation. In 1984, Mr. Orrick moved to California to join the law firm of Coblentz, Patch, Duffy, & Bass, LLP. His practice with the firm initially focused on complex commercial litigation. After making partner in 1998, his practice broadened to include employment litigation. His clientele included both individuals and corporations.

During this same period, Mr. Orrick also served the Episcopal Bishop of California, essentially acting as outside general counsel. This included advising the Diocese on interpretation of church canons, the various rights of congregations leaving the Diocese, and clergy's duties to report child abuse. He received compensation for these services.

In June 2009, Mr. Orrick joined the Department of Justice as a counselor to the assistant attorney general for the Civil Division in Washington, DC. His responsibilities included ``matters related to the Freedom of Information Act, tobacco litigation, increasing affirmative consumer litigation brought by the Civil Division, analysis of amendments to the False Claims Act, litigation reports, national security cases, and efforts to increase access to justice, including expansion of the Civil Division's pro bono efforts.'' In September 2009, he started supervising immigration litigation within the Division.

In June 2010, Mr. Orrick was appointed deputy assistant attorney general in the Civil Division, Department of Justice. In this role, he oversees the Office of Immigration Litigation, which is comprised of over 300 lawyers. This office handles ``all federal appellate litigation arising from petitions for review from the immigration courts and roughly 50% of the civil United States District Court immigration matters, primarily class actions, habeas and mandamus petitions, and certain Bivens actions.'' He also participates on several coordinating task forces that oversee immigration and national security related issues.

Mr. Orrick reports that throughout his career he has represented private individuals, small businesses, and large corporations in litigation matters before State and Federal courts. He estimates that approximately 97 percent of his practice has been in the area of litigation and has tried 16 cases to verdict, judgment, or final decision as either sole or lead counsel.

The American Bar Association's Standing Committee on the Federal Judiciary gave him a Unanimous ``Well Qualified'' rating.

PEREZ NOMINATION

Mr. GRASSLEY. Mr. President, at this time I would like to discuss the President's nominee for Secretary of Labor, Tom Perez.

Mr. Perez is not unknown to the Senate or even to the country as a whole now that he has been Assistant Attorney General for a long time. His tenure at the Civil Rights Commission has been marked with controversy, and that is putting it mildly. He was confirmed to his current post as Civil Rights Division Assistant Attorney General by a vote of 72 to 22. I was among those who supported his nomination to lead the Civil Rights Division, but unfortunately, based on reasons I will outline, I have come to regret that vote.

There are a number of issues regarding Mr. Perez's record that should give my colleagues pause. Today I wish to focus on the investigation I have been conducting with my colleague in the House Mr. Issa, chairman of the Oversight and Government Reform Committee, as well as Mr. Goodlatte, chairman of the House Judiciary Committee.

I would like to share with my colleagues the role Mr. Perez played in the quid pro quo between the City of St. Paul, MN, and the Department of Justice here in Washington where the Department agreed not to join two False Claims Act cases in exchange for the City of St. Paul withdrawing its case from the Supreme Court in a case called Magner v. Gallagher. Mr. Perez's actions in this case are extremely troubling for a number of reasons. In other words, if an individual takes extraordinary action to get a city to withdraw a case that is already on the docket of the Supreme Court, that is pretty serious intervention.

First and foremost, at this point no one disputes the fact that Mr. Perez orchestrated the entire arrangement. He manipulated the Supreme Court docket so that his favored legal theory, called the disparate impact theory, would evade review by the High Court. In the process, Mr. Perez left a whistleblower twisting in the wind. Those are the facts, and even Mr. Perez doesn't dispute those facts.

The fact that Mr. Perez struck a deal that potentially squandered up to $200 million from taxpayers in order to preserve the disparate impact theory is, of course, extremely troubling in and of itself. In addition to the underlying quid pro quo, however, the evidence uncovered in our investigation revealed that Mr. Perez sought to cover up the fact that the exchange even took place.

Finally--and let me emphasize that this should concern all of my colleagues--when Mr. Perez testified under oath about this case both to congressional investigators and during his confirmation hearing, Mr. Perez told a different story.

The simple but unavoidable conclusion is that the story Mr. Perez told is simply not supported by the evidence, so I will start by reviewing the underlying quid pro quo.

In the fall of 2011, the Department of Justice was poised to join a False Claims Act lawsuit against the city of St. Paul. The career lawyers--when I use the words ``career lawyers,'' I mean these folks who are not political appointees. The career lawyers in the U.S. attorney's office of Minnesota were recommending the Department of Justice join this false claims case. The career lawyers, even in the civil division at main Justice, were recommending that Justice join the case. The career lawyers in the Department of Housing and Urban Development were also recommending the Department of Justice join in this false claims case. Why is that important? Because the government participating in a false claims case makes it a much stronger case than when the individual pursues it by themselves.

What I just described to my colleagues was all before Mr. Perez got involved. At about the same time the Supreme Court agreed to hear a case called Magner v. Gallagher. In Magner, the City of St. Paul was challenging the use of the ``disparate impact'' theory under the FAIR Housing Act. The disparate impact theory is a mechanism Mr. Perez and the civil rights division have been using in lawsuits against banks for their lending practices. If that theory were undermined by the Supreme Court, it would likely spell trouble for Mr. Perez's lawsuits against the banks.

So Mr. Perez approached the lawyers handling the Magner case and he cut a deal. The Department of Justice agreed not to join two false claims[Page: S3512 cases in exchange for the City of St. Paul withdrawing Magner from the Supreme Court. In early February 2012, Mr. Perez even flew to St. Paul to finalize the deal. The next week the Department of Justice declined the first false claims case, called the Newell case. The next day, the City of St. Paul withdrew the Magner case from the Supreme Court.

Now, there are a couple of aspects about this deal I wish to emphasize. First, as I mentioned, the evidence makes clear Mr. Perez took steps to cover up the fact that he had bartered away the false claims cases. Cover-ups aren't good in government. On January 10, 2012, Mr. Perez called the line attorney in the U.S. attorney's office regarding the declination memo in the Newell case. To remind my colleagues, Newell was the case the same career attorneys were strongly recommending the United States join before Mr. Perez got involved. By the time of this phone call in January 2012, Mr. Perez was well on his way toward orchestrating this quid pro quo I have described.

Mr. Perez then called the line attorney, Mr. Greg Brooker, and instructed him not to discuss the Magner case in the memo he prepared outlining the reasons for the decision not to join that false claims case. Here is what he said. This is a quote:

Hey, Greg. This is Tom Perez calling you--excuse me, calling you at 9 o'clock on Tuesday. I got your message. The main thing I wanted to ask you, I spoke to some folks in the Civil Division yesterday and wanted to make sure that the declination memo that you sent to the Civil Division--and I am sure it probably already does this--but it doesn't make any mention of the Magner case. It is just a memo on the merits of the two cases that are under review in the qui tam context.

End of that voicemail.

Approximately 1 hour later, Mr. Perez sent Mr. Brooker a follow-up e-mail, writing:

I left you a detailed voice message. Call me if you can after you have a chance to review [the] voice mail.

Several hours later Mr. Perez sent another follow-up e-mail, writing:

Were you able to listen to my message?

Mr. Perez's voice mail was quite clear and obvious. He told Mr. Brooker:

Make sure that the declination memo ..... doesn't make any mention of the Magner case. It is just a memo on the merits of the two cases.

What could be more clear than that?

In fact, Mr. Perez himself sent an e-mail less than an hour later explaining that he had left a detailed voice mail for Mr. Brooker. Yet when congressional investigators asked Mr. Perez why he left a voice mail, he told an entirely different story. Here is what he told the investigators:

What I meant to communicate was, it is time to bring this to closure, and if the only issue that is standing in the way is how you talk about Magner, then don't talk about it.

Well, I hope my colleagues are listening and they say to themselves: Give me a break. This is plainly not what he said in his voice mail. Mr. Perez, I was born at night, but I wasn't born last night. He didn't say anything about being concerned with the delay. He said:

Make sure you don't mention Magner. It is just a memo on the merits.

His intent was crystal clear.

Mr. Perez also testified Mr. Brooker called him back the next day and refused to omit the discussion of the Magner case that was being withdrawn from the Supreme Court. According to Mr. Perez, he told Mr. Brooker during this call to ``follow the normal process.''

But, again, this story is not supported by the evidence.

One month later, after Mr. Perez flew to Minneapolis to personally seal the deal with the city, a line attorney in the civil division e-mailed his superior to outline ``additional facts'' about the deal.

Point 6 read:

USA-MN--

U.S. Attorney Minnesota. That is abbreviated here.

U.S. Attorney Minnesota considers it non-negotiable that its office will include a discussion of the Supreme Court case and the policy issues in its declination memo.

If Mr. Perez's story were true and the issue was resolved on January 11, then why, 1 month later, would the U.S. attorney's office need to emphatically state it would not hide the fact that the exchange took place? Thank God for honest line attorneys, career attorneys.

As I mentioned, Mr. Perez flew to Minneapolis to finalize the deal on February 3, and one would think a deal of this magnitude would be memorialized in a detailed

written agreement. After all, you can't even rent a car without signing a detailed agreement. But was this agreement written? No, it wasn't.

After Mr. Perez finalized the deal, the career attorney asked if there was going to be a written agreement. What was Mr. Perez's response? He said:

No, just oral discussions; word was your bond.

Once again, the people listening to this are saying to themselves: Can you believe that? Here is Mr. Perez. He has just orchestrated a deal where the United States declined to join a case worth up to $200 million to the Federal Treasury in exchange for the City of St. Paul withdrawing a case from the Supreme Court. And when the career lawyers asked if this deal will be written down, he says, No. Your word was your bond.

As everyone knows, the reason we make arrangements such as this in writing is so there is no disagreement down the road about what the parties agreed to. As it turns out, there was, in fact, a disagreement about the terms of this unwritten deal. The lawyer for the City of St. Paul, Mr. Lillehaug, told congressional investigators on January 9, approximately 1 month before the deal was finalized, Mr. Perez assured him that ``HUD would be helpful'' if the Newell case proceeded after the Department of Justice declined to intervene. Mr. Lillehaug also told investigators that on February 4, the day after they finalized the deal, Mr. Perez told him HUD had begun assembling information to assist the city in a motion to dismiss the Newell complaint on ``original source'' grounds. But, according to Mr. Lillehaug, this assistance disappeared after the lawyers in the civil division learned about it.

Let me tell my colleagues the significance of that. Mr. Perez represents the United States. Mr. Newell is bringing a case on behalf of the United States. Mr. Perez is talking to lawyers on the other side and he tells them, after the United States declines to join the case we will give you information to help you defeat Mr. Newell, who is bringing the case on behalf of the United States. Mr. Newell, the whistleblower, was left hanging out to dry by Mr. Perez. In effect, Mr. Perez is offering, in that statement, to give the other side information to help defeat his own client.

I recognize this is a significant allegation, and Mr. Perez was asked about it under oath. His response? Mr. Perez said:

No, I don't recall ever suggesting that.

So on the one hand is Mr. Lillehaug, who says Mr. Perez made this offer first in January and then again on February 4, but the assistance disappeared after the lawyers in the civil division caught wind of it.

On the other hand is Mr. Perez, who testified under oath: I don't recall ever having made that offer. Who should we believe? Well, the documents support Mr. Lillehaug's version of events.

On February 7, a line attorney sent an e-mail to the director of the civil fraud section and related a conversation the assistant U.S. attorney in Minnesota had with Mr. Lillehaug. According to Mr. Lillehaug, the line attorney wrote that there were two additional items that were part of the ``deal that is not a deal'' and one of those two items was this:

HUD will provide material to the City in support of their motion to dismiss the original source grounds.

Internal e-mails show that when the career lawyers learned of this promise, they strongly disagreed with it and they conveyed their concerns to Tony West, head of the civil division. During his transcribed interview, Mr. West testified that it would have been inappropriate to provide this material outside of the normal discovery channels. Mr. West said:

I just know that wasn't going to happen and it didn't happen.

In other words, this is simple: When lawyers at the civil division learned of this offer, they shut down that offer. So, the documentary evidence shows the events transpired exactly as Mr. Lillehaug said they did. Mr. Perez offered to provide the other side with information that would help them defeat the whistleblower, Mr. Newell, in his case, and that case was on behalf of the United States and the taxpayers, and possibly $200 million. Well, I imagine this is simply stunning, the lack of common sense exhibited, when the American taxpayers hear about this.

Mr. Perez represents the United States. Any lawyer would tell you it is highly inappropriate to offer to help the other side defeat their own client.

This brings me to my final couple points I want to highlight for my colleagues.

Even though the Department traded away Mr. Newell's case, Mr. Perez has defended his decision, in part, by claiming that Mr. Newell still had his ``day in court.'' What Mr. Perez omits from his story is that Mr. Newell's case was dismissed precisely because the United States was no longer a party to it.

After the United States declined to join the case, the judge dismissed Mr. Newell's case based upon the legal language ``public disclosure bar,'' finding he was not, again, the ``original source'' of the information to the government. I want to remind my colleagues that we recently amended the False Claims Act precisely to prevent an outcome like this. Specifically, that amendment made clear that the Justice Department can contest the ``original source'' dismissal even if it fails to intervene, as it did in this case.

So the Department did not merely decline to intervene, which is bad enough, but, in fact, it affirmatively chose to leave Mr. Newell all alone in this case that Mr. Newell filed for the benefit of the United States. Of course, that is the whole point. That is why it was so important for the City of St. Paul to make sure the United States did not join the case. That is why the city was willing to trade away a strong case before the Supreme Court. The city knew that if the United States joined the action, the case would almost certainly go forward. Conversely, the city knew that if the United States did not join the case and chose not to contest the original source, it would likely get dismissed.

Think about that--$200 million possibly down the drain. The Department trades away a case worth millions of taxpayer dollars. They did it precisely because of the impact the decision would have on the litigation. They knew that as a result of their decision, the whistleblower would get dismissed based upon ``original source'' grounds, since they did not contest it. And not only that, Mr. Perez went so far as to offer to provide documents to the other side that would help them defeat Mr. Newell in his case on behalf of Mr. Perez's client. Again, that client was the United States. Yet, when the Congress starts asking questions, they have the guts to say: We didn't do anything improper because Mr. Newell still had his day in court. Well, the problem with that is that they cut the limbs out from under him.

This brings me to my last point, and that has to do with the strength of the case. Throughout our investigation, the Department has tried to defend Mr. Perez's actions by claiming the case was ``marginal'' or ``weak.'' Once again, the documents tell a far different story.

Before Mr. Perez got involved, the career lawyers--again, not political appointees but career lawyers--at the Department wrote a memo recommending intervention in the case. In that memo, they describe St. Paul's actions as ``a particularly egregious example of false certifications.'' In fact, the career lawyers in Minnesota felt so strongly about the case that they took the unusual step of flying here to Washington, DC, to meet with HUD officials. HUD, of course, agreed that the United States should intervene, but that was before Mr. Perez got involved in the case.

The documents make clear that career lawyers considered this a strong case, but the Department has claimed that Mike Hertz, the Department's expert on the False Claims Act, considered it a weak case. In fact, 2 weeks ago Mr. Perez testified before my colleagues in the Senate HELP Committee that Mr. Hertz ``had a very immediate and visceral reaction that it was a weak case.'' But what do the documents show? They tell a different story. Mr. Hertz knew about the case in November 2011. Two months later a Department official took notes of a meeting where the quid pro quo was discussed. That official wrote down Mr. Hertz's reaction. This official wrote:

Mike--

Referring to Mr. Hertz--

Mike--Odd--Looks like buying off St. Paul. Should be whether there are legit reasons to decline as to past practice.

The next day that same official e-mailed the Associate Attorney General here in town and said:

Mike Hertz brought up the St. Paul ``disparate impact'' case in which the SG [Solicitor General] just filed an amicus brief in the Supreme Court. He's concerned about the recommendation that we decline to intervene in two qui tam cases against St. Paul.

So you have these documents appearing to show that Mr. Hertz's primary concern was not the strength of the case, as Mr. Perez led Senate colleagues to believe; Mr. Hertz was concerned that the quid pro quo Mr. Perez ultimately arranged was, in fact, improper. And, again, in his words, it ``looks like buying off St. Paul.''

Just last week the Justice Department sent my staff a critical 33-page slide show about the Department's case against St. Paul. In that document, the career lawyers made their strong case for intervention, for the Justice Department to intervene with Newell to bring this case about. The Department failed to provide this critical document to the committees, and we only learned about this document not from the Department of Justice but from a recent interview we had with a HUD employee. Why do I say this is a critical document? Because this document makes abundantly clear that career lawyers did not view this case as ``marginal,'' where Mr. Perez wants you to believe that other people in the Department, experts on false claims, thought it was a ``marginal'' or ``weak'' case. And obviously he did not view it as a weak case, as Mr. Perez testified before the HELP Committee--far from it.

Here is how the career lawyers summed up the case in one of the final slides of this document. These are quotes:

The City Repeatedly and Knowingly Misrepresented its Compliance with Section 3 to Obtain Federal Funds.

Tentative conclusions:

The City has long been aware of its obligations under section 3;

The City repeatedly told HUD and others that it was in Compliance with Section 3;

The City has failed to substantially comply with Section 3.

Does that sound like career lawyers describing a ``marginal'' or a ``weak'' case? Of course not. Yet that is what Mr. Perez told my colleagues on the HELP Committee. My colleagues are well aware of how I feel about the Whistleblower Protection Act, and my colleagues know how I feel about protecting whistleblowers who have the courage to step forward, often at great risk to their own careers. But this is about much more than the whistleblower who was left dangling by Mr. Perez. This is about the fact that Mr. Perez manipulated.

the rule of law in order to get a case removed from the Supreme Court docket. But most importantly, this is about the fact that when Congress started asking questions about this case and when Mr. Perez was called upon to offer his testimony under oath, he chose to tell an entirely different story. The unavoidable conclusion is that the story he told is flatly not supported by the facts.

We have to demand more. We have to demand that when individuals are called upon to answer questions before the Senate, that they shoot straight regardless of the consequences.

I do not believe Mr. Perez gave us the straight story when he was called upon to answer questions about this case, and for that reason, I recommend, first of all, that my colleagues study these issues. There is a lot in this that needs to be brought out about this nomination before we vote on it. This evidence I give is just part of the story.

I yield the floor.

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