S3234 CONGRESSIONAL RECORD — SENATE May 8, 2013 under Mr. Perez’s leadership had be- The PRESIDING OFFICER. The Sen- be the central question before our com- come so politicized and so unpro- ator from . mittee today: Will Tom Perez be a good fessional that at times it became sim- f Secretary of Labor. The answer is un- ply dysfunctional, it could not function equivocally yes. Without question, he NOMINATION OF THOMAS PEREZ properly. has the knowledge and experience This 258-page report by the Depart- Mr. HARKIN. Mr. President, I come needed to guide this critically impor- ment of Justice inspector general cited to the floor today to express my deep tant agency. ‘‘deep ideological polarization,’’ which disappointment that once again Repub- Through his professional experiences, began under his predecessors and which lican obstructionism and procedural and especially his work as Secretary of has continued under Mr. Perez’s leader- tricks are preventing this body from the Maryland Department of Labor, Li- ship. The inspector general said this carrying out its constitutional duty censing and Regulation, he has devel- polarization ‘‘has at times been a sig- and responsibility, its obligation to oped strong policy expertise about the nificant impediment to the operation consider important Presidential nomi- many important issues for American of the Section and has exacerbated the nations. workers and businesses that come be- potential appearance of politicized de- This time the target is Mr. Tom fore the Department of Labor every cision-making.’’ Perez, the President’s extremely quali- day. He spearheaded major initiatives This is at the Department of Justice. fied nominee to be Secretary of Labor. on potentially controversial issues, So instead of upholding and enforcing The HELP Committee, which I chair, such as unemployment insurance re- all laws equally, the Department of was scheduled to vote on his nomina- form and worker misclassification, Justice, Civil Rights Division—the tion at 4 o’clock this afternoon. Obvi- while finding common ground between Voting Section—under Mr. Perez, has ously, we are not doing that. An anony- workers and businesses to build sen- launched politically motivated cam- mous Republican has invoked an ob- sible, commonsense solutions. paigns against commonsense constitu- scure procedural rule to prevent our He also clearly has the management tional laws, such as the voter ID laws committee from meeting at that sched- skills to run a large Federal agency ef- adopted by the States of and uled time. This pointless obstruc- fectively. He was also an effective man- . tionism is extremely disturbing. ager and a responsible steward of pub- In addition, he delivered misleading I would like to point out that we had lic resources, undertaking significant testimony to the U.S. Commission on previously been scheduled to vote on administrative and organizational re- Civil Rights back in 2010. The inspector his nomination in my committee 2 forms that made the Maryland DLLR general said Mr. Perez’s testimony weeks ago. In an effort to bend over more efficient and more effective. about a prominent voting rights case backwards and to be accommodating to His outstanding work in Maryland ‘‘did not reflect the entire story re- our colleagues who requested more has won him the support of the busi- garding the involvement of political time to consider documents related to ness community and worker advocates appointees.’’ So when you are not tell- the nomination, I deferred it for 2 alike. To quote from the endorsement ing the whole truth, you are not telling weeks as sort of senatorial courtesy. letter of the Maryland Chamber of the truth. This time there is no allegation that Commerce: Before joining the Department of they have had insufficient time for Mr. Perez proved himself to be a pragmatic Justice—and this is part of his unfortu- consideration, just delay for delay’s public official who was willing to bring dif- nate track record—he served as a local sake on the nomination. Tom Perez has fering voices together. The Maryland Cham- official in Montgomery County, MD. been before our committee since ber had the opportunity to work with Mr. During those years, he consistently op- March. We have had our hearing, dur- Perez on an array of issues of importance to posed the proper enforcement of our employers in Maryland, from unemployment ing which Mr. Perez fully answered all immigration laws. In fact, Mr. Perez and workforce development to the housing questions posed to him. I cut off no testified against enforcement measures and foreclosure crisis. Despite differences of one. I allowed anyone to ask whatever that were being considered by the opinion, Mr. Perez was always willing to questions they wanted. Maryland State Legislature. allow all parties to be heard, and we found I would ask my colleagues, because Mr. Perez has met with any inter- him to be fair and collaborative. I believe that our experiences with him here in Mary- we have an important function to play ested Senator personally and answered over 200 written questions for the land bode well for the nation. That is a pret- under our constitutional system, one of ty strong endorsement by a chamber of com- advice and consent—that is the con- record. It is an understatement to say his nomination has been thoroughly merce for a nominee whom the minority firmation process for Presidential leader today on the floor characterized as a nominees—is this really the type of vetted. This continuing delay is uncon- ‘‘crusading ideologue . . . willing to do or person we want running the Depart- scionable and only hurts the American say anything to achieve his ideological ment of Labor, especially at a time workers and businesses that rely on the ends.’’ That is how he was characterized by when Congress is contemplating pas- Department of Labor each and every the Republican leader today, but the Mary- land Chamber of Commerce didn’t seem to sage of important immigration reform day. As our country continues to move think so. So that grossly unfair character- laws? ization by the Republican leader is mani- Given his record, I am concerned Mr. down the road to economic recovery, the work of the Department of Labor is festly inconsistent with the experiences of Perez does not have the temperament the Republican leaders and businesses that or the competence we need in our Sec- becoming even more vital to the lives have actually worked with Tom Perez. of our working families. Whether it is retary of the Department of Labor. I Mr. President, I ask unanimous con- making sure workers get paid the fear that, just like he has at the De- sent to have printed in the RECORD let- wages they deserve, helping returning partment of Justice, he would invari- ters from businesses and Republican veterans reenter the workforce, pro- ably politicize the Department of leaders demonstrating the strong bi- tecting our seniors’ retirement nest Labor and impose ideological litmus partisan support for Mr. Perez’s nomi- eggs, ensuring that a new mother can tests. For all these reasons, and more, nation. These people clearly disagree care for her baby without losing her I will oppose his nomination. with the Republican leader’s assess- job, the Department of Labor helps Mr. President, I yield the floor and ment of Mr. Perez’s qualifications and families build the cornerstones of a suggest the absence of a quorum. character. The PRESIDING OFFICER. The middle-class life. There being no objection, the mate- Now more than ever we need strong clerk will call the roll. rial was ordered to be printed in the leadership at the Department to help The assistant legislative clerk pro- RECORD, as follows: ceeded to call the roll. strengthen our fragile recovery and MARCH 19, 2013. build a stronger and revitalized Amer- Mr. HARKIN. I ask unanimous con- JOINT STATEMENT FROM STATE ATTORNEYS sent that the order for the quorum call ican middle class. That is why this GENERAL IN SUPPORT OF NOMINATION OF be rescinded. nomination is so important. TOM PEREZ AS SECRETARY OF U.S. DEPART- The PRESIDING OFFICER (Mr. There has been a lot of public discus- MENT OF LABOR BROWN). Without objection, it is so or- sion about Mr. Perez but remarkably ‘‘Tom Perez is a brilliant lawyer and lead- dered. little of it has focused on what should er, who listens thoughtfully to all sides and

VerDate Mar 15 2010 03:29 May 09, 2013 Jkt 029060 PO 00000 Frm 00020 Fmt 0624 Sfmt 0634 E:\CR\FM\G08MY6.049 S08MYPT1 rfrederick on DSK6VPTVN1PROD with SENATE May 8, 2013 CONGRESSIONAL RECORD — SENATE S3235 works collaboratively to solve problems. He ment must work in partnership with busi- I believe that he will bring those skills and has dedicated his career to serving the pub- ness to find solutions that succeed in today’s strong personal qualities to the duties of the lic, and his experience as Secretary of the marketplace highlights his continual acces- Secretary of Labor and enable him to per- Maryland Department of Labor, Licensing sibility and his empathic approach to work- form in a manner worthy of your trust. and Regulation and in the U.S. Department ing with job creators nationwide. Thank you for listening to my support for of Justice make him ideally suited to serve We applaud the President’s nomination of this very special and patriotic man. as the Secretary of the U.S. Department of Tom Perez as Secretary of Labor because we Respectfully yours, Labor. have experienced, first hand, the fruits of JOHN R. DUNNE. ‘‘As state Attorneys General, we have Tom’s open door policy and his steady ap- Mr. HARKIN. Indeed, I think Mr. found Perez to be open, responsive and fun- proach to finding solutions that work for the Perez’s character—his character—is ex- damentally fair. He is committed to justice benefit of all. Sincerely, actly what qualifies him for this job— and the rule of law and able to work across his character. party and philosophical lines to achieve just M.H. JIM ESTEPP, results. President/CEO. Tom Perez has dedicated his life to ‘‘The U.S. Department of Labor and the making sure every American has a fair country will be well served by a leader who THE MARYLAND MINORITY opportunity to pursue the American understands the need to forge partnerships CONTRACTORS ASSOCIATION, INC., dream. At the Maryland Department of with state and local officials and who values , MD, March 21, 2013. Labor, he revamped the State’s adult cooperation to bring about successful results President , education system so more people could for both employers and employees.’’ The White House, Pennsylvania Avenue, Wash- successfully train for better jobs and ‘‘The following Attorneys General issued ington, DC. brighter futures. As the Assistant At- this joint statement in support of Perez’s DEAR PRESIDENT OBAMA, The Maryland Mi- nomination: nority Contractors Association applauds the torney General for Civil Rights at the ‘‘California Attorney General Kamala Har- nomination of Tom Perez as the United U.S. Department of Justice, where he ris, Delaware Attorney General Beau Biden, States Secretary of Labor, and encourages a is right now, he has been a voice for Illinois Attorney General Lisa Madigan, quick confirmation. While serving as Mary- the most vulnerable, and he has rein- Iowa Attorney General Tom Miller, Mis- land’s labor secretary, Tom proved to be fair- vigorated the enforcement of some of sissippi Attorney General Jim Hood, North minded, and always had an open door. our most critical civil rights laws. He Carolina Roy Cooper, Oregon Attorney Gen- The Maryland Minority Contractors Asso- ciation is composed primarily of merit has helped more Americans achieve the eral Ellen Rosenblum, Tennessee Attorney dream of home ownership through his General Robert Cooper, Jr., Former Utah At- shops, so our member companies have em- torney General Mark Shurtleff and Former ployees that are not under union collective unprecedented efforts to prevent resi- Washington Attorney General Rob McKenna. bargaining agreements. We found ourselves dential lending discrimination. He has at the table with Tom on a range of issues, helped to ensure that people with dis- MARCH 15, 2013. from workplace safety to apprenticeships to abilities have the choice to live in Hon. BARACK OBAMA, the proper classification of employees. Al- their own homes and communities President of the United States, The White though our perspectives often differed, we al- rather than only in institutional set- House, Washington, DC. ways had a seat at the table, and I can con- fidently say that our perspective was always tings and to make sure people with dis- DEAR PRESIDENT OBAMA: The Maryland abilities receive the support and serv- Chamber of Commerce supports the nomina- taken into consideration. Tom pursues his tion of Thomas E. Perez to serve as the role of protecting workers with vigor, but he ices they need to make independent United States Secretary of Labor. always took the concerns of our members se- living possible. He has stepped up the During his tenure as Secretary of Mary- riously, and, when presented with sound ar- Department’s efforts to protect the em- land’s Department of Labor, Licensing and guments, was willing to compromise. ployment rights of servicemembers so Regulation, Mr. Perez oversaw a wide range We strongly support the nomination of our men and women in uniform can re- Tom Perez, and we believe that he will make of regulatory programs of critical impor- turn to their jobs and support their tance to the state’s business community, in- an excellent Secretary of Labor. He is a smart, honest person who will serve our families after serving their country. cluding unemployment insurance, the regu- I can tell you that Tom Perez is pas- lation of financial institutions, worker safe- county well. ty and professional licensing. PLESS JONES, sionate about these issues. He is pas- Mr. Perez proved himself to be a pragmatic President, Maryland Minority Contractors. sionate about justice and about fair- public official who was willing to bring dif- ness, and I believe these are qualities fering voices together. The Maryland Cham- WHITEMAN OSTERMAN that Tom Perez learned at the hand of ber had the opportunity to work with Mr. & HANNA LLP, his former employer here in the Sen- Perez on an array of issues of importance to Albany, NY, April 15, 2013. ate, our former committee chairman of employers in Maryland, from unemployment Re Thomas Perez, Nominee for Secretary of Labor. the HELP Committee, Senator Ted and workforce development to the housing Kennedy. But, as he explained in his and foreclosure crisis. Sen. THOMAS HARKIN (D–IA), Despite differences of opinion, Mr. Perez Hart Senate Office Building, confirmation hearing, he also learned was always willing to allow all parties to be Washington, DC. from Senator Kennedy ‘‘that idealism heard and we found him to be fair and col- Sen. LAMAR ALEXANDER (R–TN), and pragmatism are not mutually ex- laborative. I believe that our experiences Dirksen Senate Office Building, clusive.’’ Mr. Perez knows how to bring with him here in Maryland bode well for the Washington, DC. people together to make progress on nation. DEAR SENATORS HARKIN AND ALEXANDER: I even controversial issues without burn- The Maryland Chamber of Commerce is write as an appointee by former President ing bridges or making enemies. He Maryland’s leading statewide business advo- George H.W. Bush to the United States De- cacy organization. Our 800 member compa- partment of Justice in support of Thomas knows how to hit the ground running nies employ more than 442,000 people in the Perez who has been nominated by President and quickly and effectively become an state. The Chamber works to support its Obama to serve as Secretary of Labor and agent of real change. That is exactly members and advance the State of Maryland urge your favorable consideration of his can- the kind of leadership we need at the as a national and global competitive leader didacy. Department of Labor. We need his vi- in economic growth and private sector job As the Assistant Attorney General for sion, we need his passion, and we need, creation through its effective advocacy, high Civil Rights (1990–1993), I worked directly yes, his character at the helm of this with Tom (in fact, I hired him in 1990) on a level networking and timely communica- important agency. tions. variety of sensitive matters, including crimi- Sincerely, nal and voting rights issues. During a num- Allow me to state very clearly that KATHLEEN T. SNYDER, ber of face-to-face meetings, I had the oppor- while I know there has been generated CCE, President/CEO, tunity both to review his legal-based memo- controversy—not real controversy but Maryland Chamber of Commerce. randa and to engage in a number of intense generated controversy—surrounding debates as to what should be the Division’s Mr. Perez’s nomination, there is abso- GREATER PRINCE GEORGE’S final course of action. As a result of those lutely nothing that calls into question BUSINESS ROUNDTABLE, experiences, I found Tom to be an excellent his ability to fairly enforce the law as Bowie, MD, March 18, 2013. lawyer, a dedicated public servant with a it is written. There is absolutely noth- TO WHOM IT MAY CONCERN: Tom Perez is deep commitment to the common good, and one of the most honest and dedicated public a person of legal and moral integrity; quali- ing that calls into question his profes- officials that we in the Prince George’s ties that enable him to recognize the value sional integrity or his moral character County business community have ever of contending parties’ positions in order to or his ability to lead the Department of worked with. His understanding that govern- achieve workable solutions. Labor.

VerDate Mar 15 2010 05:07 May 09, 2013 Jkt 029060 PO 00000 Frm 00021 Fmt 0624 Sfmt 0634 E:\CR\FM\A08MY6.005 S08MYPT1 rfrederick on DSK6VPTVN1PROD with SENATE S3236 CONGRESSIONAL RECORD — SENATE May 8, 2013 As I mentioned, Mr. Perez has been cide whether or not to intervene in Newell THE VERNIA LAW FIRM, as open and aboveboard as he could and Ellis, chose not to do so after consid- Washington DC, May 6, 2013. possibly be throughout this entire con- ering their merits, the United States inter- Re Declination by the United States Depart- firmation process. He has met with any est in preserving the disparate impact test ment of Justice in United States ex rel. under the Fair Housing Act, and the U.S. in- Newell v. City of St. Paul, Civil No. 09–SC– Member personally who requested a terest in ensuring (so far as possible) that a 001177 (D.Minn.). meeting. As I said, he appeared before Supreme Court ruling on the proper test be Hon. Representative JIM JORDAN, our committee in a public hearing. He based on favorable facts, did Perez violate Chairman, Subcommittee on Economic Growth, has answered more than 200 written any rule of professional conduct (ethics rule) Job Creation & Regulatory Affairs Com- questions. He has bent over backward governing him as a lawyer by encouraging mittee on Oversight and Government Re- to respond to any and all concerns others at DOJ or HUD (or elsewhere) to re- form, Rayburn House Office Building, raised about his work at the Depart- frain from intervention in Newell and Ellis Washington, DC. ment of Justice. in exchange for St. Paul’s agreement to Hon. Representative MATT CARTWRIGHT This administration—President withdraw the Magner appeal?’’ Ranking Minority Member, Subcommittee on Obama—has also been extraordinarily The Joint Staff Report argues that linking Economic Growth, Job Creation & Regu- accommodating to any Republican col- the two cases—withdrawal of the Magner ap- latory Affairs, Committee on Oversight and Government Reform, Rayburn House Office league, especially to their concerns peal and U.S. non-intervention in the two Qui Tam actions, Newell and Ellis (hereafter Building, Washington, DC. about Mr. Perez’s involvement in the Newell)—was unethical. However, it cites no Hon. Representative TRENT FRANKS global resolution of two cases involving professional conduct rule, no court decision, Chairman, Subcommittee on the Constitution the city of St. Paul, MN—Magner v. St. no bar ethics opinion, and no secondary au- and Civil Justice, Committee on the Judici- Paul and Newell v. St. Paul. The ad- thority that supports this argument. In fact, ary, Rayburn House Office Building, Wash- ministration has produced thousands of no authority supports it. ington, DC. Hon. Representative JERROLD NADLER documents concerning these two cases. The duty of lawyers for the United States Ranking Minority Member, Subcommittee on the They have arranged for the interview is no different from the duty of lawyers gen- Constitution and Civil Justice, Committee on erally, namely to pursue the goals of their of government employees. They have the Judiciary, Rayburn House Office Build- client within the bounds of law and ethics. facilitated almost unprecedented levels ing, Washington, DC. Clients generally identify those goals, but of disclosure to alleviate any concern DEAR MESSRS. JORDAN, CARTWRIGHT, when the client is the government, its law- about his involvement in these cases. FRANKS, AND NADLER: As chairman of the committee, I yers often do so, sometimes in conjunction I am writing in advance of the Commit- with agencies, elected officials, or other rep- tee’s May 7, 2013 hearing regarding the De- have also tried to be as accommodating resentatives of the government who are au- as possible, joining in requests for doc- partment of Justice’s declination of the thorized to speak for the client. False Claims Act qui tam cases, United States uments that I, quite frankly, thought The United States had interests in Magner ex rel. Newell v. City of St. Paul, Minnesota, were unnecessary but willing to ac- and also in Newell. Qui Tam actions are Civil No. 09–SC–001177 (D.Minn.), and United quire and postponing the executive ses- brought to vindicate interests of the sov- States ex rel. Ellis v. City of St. Paul, Civil No. sion for 2 weeks to provide Members ereign, here the U.S. The U.S. interest was to 11CV–0416 (D.Minn.), to provide my com- additional time for consideration. recover money assuming, of course, that ments on certain of the conclusions reached All this extensive process has re- Newell had merit. The U.S. interest in in the Joint Staff Report, DOJ’s Quid Pro vealed is that Mr. Perez acted at all Magner was to avoid Supreme Court review Quo with St. Paul: How Assistant Attorney times ethically and appropriately to of a legal issue in Magner, whose facts were General Thomas Perez Manipulated Justice and seen as unfavorable to a decision that would Ignored the Rule of Law (April 15, 2013). I ap- advance the interests of the U.S. Gov- preciate the opportunity to address the Com- ernment. For example, with respect to sustain a disparate impact test for violations of the Fair Housing Act. Perez believed that mittee. the Magner and Newell matters, Mr. preserving the disparate impact test was im- For most of my twenty years practicing Perez consulted with both outside eth- portant to his client and more important law, I have handled investigations and cases ics and professional responsibility ex- than intervention in Newell. brought under the False Claims Act, 31 perts at the Department of Justice, and § U.S.C. §§ 3729, et seq. Early in my career, I I assume that Perez persuaded others with served for eight years as a Trial Attorney in Mr. Perez acted within their guidelines decision-making authority, and in particular the Fraud Section of the Commercial Litiga- at all times. It is no surprise that out- West, that withdrawing the Magner appeal tion Branch of the Department of Justice’s side ethics experts have confirmed that was more important to U.S. interests than Civil Division. In that capacity, I handled Mr. Perez acted appropriately in these intervention in Newell. I also assume, dozens of False Claims Act cases involving matters. though it is contested, that Newell was meri- numerous federal agencies, including the De- I would like to submit again for the torious and that but for the agreement with partment of Housing and Urban Development RECORD letters and statements from St. Paul, the United States would have inter- (HUD). I left the Fraud Section to be a pros- several legal ethics experts and experts vened in Newell and perhaps prevailed. ecutor in the Criminal Division where, in 2005 I received a John Marshall Award from in the False Claims Act confirming Of course, it is legitimate to argue that Perez, West, and others made the wrong the Department of Justice, and the National that Mr. Perez’s handling of the Exploited Children’s Award from the Na- Magner and Newell cases was both eth- choice and that pursuing Newell was more important to U.S. interests than how the Su- tional Center for Missing and Exploited Chil- ical and appropriate. And I ask unani- preme Court would ultimately resolve the dren. mous consent to have printed in the issue in Magner. I have no view on that ques- That same year, I joined Covington & Burl- ing LLP, initially focusing on the defense of RECORD these letters. tion. It is not an ethical question. The ques- False Claims Act investigations and suits. I There being no objection, the mate- tion I can answer is whether Perez could started my own firm in 2009, in part to have rial was ordered to be printed in the ethically make the decision he did and which the flexibility of representing whistleblower he encouraged others to accept. Could he RECORD, as follows: clients as well as defendants. I have filed nu- ethically decide, when faced with a situation STATEMENT OF STEPHEN GILLERS, ELIHU ROOT merous qui tam suits, and I am now litigating where only one of two possible choices could PROFESSOR OF LAW, UNIVERSITY some of those, including a major case be made, and where each choice offered a SCHOOL OF LAW, MAY 6, 2013 against a long-term care pharmacy for pre- benefit to his client, to choose option A over The Joint Staff Report makes many asser- scriptions reimbursed by Medicare Part D. In option B? tions and contains many factual allegations, addition to my work on these cases, I have which may or may not be contested. How- The answer is unequivocally yes. Perez was made presentations on the False Claims Act ever, only one issue is described as ethical. It not choosing to advantage one client over and related statutes, and I write the best- is this issue that the Democratic Staff memo another client. There was no conflict here read legal blog on the topic, mainly addresses. Stated most favorably between the interests of two clients because www.falseclaimscounsei.com. from the Joint Staff perspective, the issue is: there was only one client. That client, we I have had no professional involvement in ‘‘Assuming that Assistant Attorney Gen- are assuming, had two interests—withdrawal the Newell or Ellis cases, and have not spoken eral Tomas E. Perez (Civil Rights Division) of Magner or intervention in Newell—but about them with any of the persons de- was mainly responsible for reaching the under the circumstances, it could pursue scribed in the Joint Staff Report. I have, agreement with the City of St. Paul de- only one. Perez made a choice between these however, reviewed that Report, its attached scribed below—even assuming that the options and encouraged others to agree. His documents, the Democratic Staff’s Report on agreement would not have happened without conduct violates no ethical rule that governs the same topic (April 14, 2013), and certain of his intervention—but assuming, too, that lawyers. He was acting in what he believed the documents publicly available on the Dis- Assistant Attorney General Tony West (Civil to be the best interests of his client, which is trict Court for the District of Minnesota’s Division), who had ultimate authority to de- what lawyers are required to do. PACER website.

VerDate Mar 15 2010 05:11 May 09, 2013 Jkt 029060 PO 00000 Frm 00022 Fmt 0624 Sfmt 0634 E:\CR\FM\G08MY6.052 S08MYPT1 rfrederick on DSK6VPTVN1PROD with SENATE May 8, 2013 CONGRESSIONAL RECORD — SENATE S3237 As one of the few attorneys in private tice’s decision to intervene in the case cost respectfully disagree with the premise of practice with significant Department of Jus- taxpayers a significant opportunity to re- this criticism, which is that the Department tice experience who represents both defend- cover over $200 million. See Joint Staff Re- of Justice does, or should, evaluate the po- ants and whistleblowers, I read these docu- port at 61. This, too, significantly overstates tential success of a motion to dismiss on ments with great interest. With all due re- the strength of Newell. public disclosure grounds. spect to the Joint Staff, however, I feel com- The draft intervention memo very briefly In my experience, both at the Department pelled to write to take issue with certain of describes only one damages theory, which and in private practice, the Government does their factual conclusions. I will limit my the trial attorney characterizes as ‘‘aggres- not typically investigate the common comments to those that I feel are critical to sive’’: that the damages under the False grounds on which declined qui tam suits assessing the conduct of Department of Jus- Claims Act were the entire amount of the founder: public disclosure and particularity tice officials involved in these cases. Section 3 construction project grants (which under Fed. R. Civ. P. 9(b). Although I, as a whistleblower attorney, would prefer that MERITS OF THE NEWELL CASE was some unknown fraction of the overall $86 the Department investigate these possible Because the documents do not treat the million in HUD grants). That ‘‘aggressive’’ theory is an unsettled area of law, however, grounds for dismissal prior to deciding Ellis case as a significant factor in the De- whether to decline or intervene a case, there partment’s decision-making, I have not un- and the Joint Staff’s reliance on it in calcu- lating the cost to taxpayers of declining to are sound reasons for not doing so: the De- dertaken to analyze the merits of that mat- partment of Justice has inadequate re- ter. Let me also preface my remarks by stat- intervene in the suit is dubious. For much of the False Claims Act’s 150– sources to investigate the merits of the fraud ing that I do not intend this letter to dispar- allegations; routinely investigating the pub- age Mr. Newell or his counsel. The Depart- year history, computing damages was rel- atively straightforward: the fact-finder cal- lic disclosures that might lead to the dis- ment of Justice appears to have largely cor- missal of a declined qui tam would ultimately roborated his allegations and his qui tam culated the difference between what the Gov- ernment actually paid and the value of the detract from the Department’s ability to complaint is well-drafted. carry out the False Claims Act’s core mis- I disagree, however, with the Joint Staff’s goods or services it received. See United States v. Bornstein, 423 U.S. 303, 316 n. 13 sion of detecting and remedying fraud. conclusion that ‘‘The Department of Justice Certainly no one has done more than Sen- Sacrificed a Strong Case Alleging a Particu- (1976). When a third-party, and not the Gov- ernment is the intended recipient of the tan- ator Grassley to encourage whistleblowers to larly Egregious Example of Fraud.’’ See assist the Government in uprooting fraud. Joint Staff Report at 37. Instead, I believe gible benefit from the outlay of federal funds, this approach arguably breaks down. The recent amendment to the public disclo- that the documents evidence significant sure bar demonstrates well his interest in bases for skepticism by Department of Jus- The traditional ‘‘benefit-of-the-bargain’’ ap- proach is strained further when the false improving enforcement of the Act. I never- tice officials. theless believe that Congress could best im- The Joint Staff’s conclusion rests in large claim relates not to quality of the goods or services received by the third-party, but to prove whistleblowers’ involvement in fraud part on its rejection of statements by De- enforcement by addressing more significant partment of Justice supervisors that wheth- the fund recipient’s satisfaction of some other condition intended to benefit society problems besetting them (such as the appli- er or not to intervene in Newell was a ‘‘close cation of Fed. R. Civ, P. 9(b) to False Claims call,’’ and its reliance instead on earlier po- more generally. The Newell case falls into this category: the city receives Section 3 Act complaints, which is by far the most sitions in support of intervention taken by common grounds for dismissal of declined the trial attorney and others assigned to the funds to improve housing, and allegedly false claims relate to its compliance with a condi- qui tam cases). case. But the draft memorandum urging In conclusion, after reviewing the publicly tion unrelated to the quality of that work. intervention acknowledges several signifi- available materials on the Department of The Courts have struggled with these cant potential problems with the case—prob- Justice’s decision to decline to intervene in issues, and four Courts of Appeals—for the lems that clearly rebut the conclusion that United States ex rel. Newell v. City of St. Paul, Second, Fifth, Seventh, and Ninth Circuits— the case was a ‘‘strong’’ one, as the Joint I believe that Department officials acted have chosen to follow the ‘‘aggressive’’ ap- Staff asserts. well within the scope of their discretion in proach the trial attorney described. The Dis- Newell’s most prominent weakness was the declining to intervene in that case. I must trict of Columbia and Third Circuits instead potential difficulty in proving that St. respectfully disagree with the contrary con- continue to employ the ‘‘benefit-of-the-bar- Paul’s noncompliance with Section 3 was clusions the Joint Staff reached in its Re- gain’’ approach, which might result in a very material to the decision of HUD to make port. I appreciate your consideration. low damages calculation in a case such as grant payments. The trial attorney handling Truly yours, Newell. I am not aware of any controlling the case candidly admitted that there was BENJAMIN J. VERNIA. litigation risk regarding materiality: precedent on this issue in the Eighth Circuit, in whose jurisdiction Newell was filed. ‘‘The City will argue that even if HUD did COHEN MILSTEIN Given the unsettled nature of this area and not say it explicitly, HUD’s silence over SELLERS & TOLL PLLC, the imprecision in the Draft Intervention many years is tacit approval. We will have to Philadelphia, PA, May 6, 2013. Memorandum’s damages figure, $86 million admit that the City was failing to comply The Hon. JIM JORDAN, represented only a theoretical upper limit on with Section 3 in ways that should have been Chairman, Subcommittee on Economic Growth, the Government’s damages for St. Paul’s al- apparent to HUD. The City did not send its Job Creation & Regulatory Affairs Com- leged violations. The Department of Justice HUD 60002 forms each year. HUD never ob- mittee on Oversight and Government Re- trial attorney acknowledged the limitations jected to this failure. The City will argue form, Rayburn House Office Building, of this approach, writing in the Draft Inter- that HUD was so unconcerned with Section 3 Washington, DC. vention Memorandum: ‘‘We acknowledge compliance that the City’s failure to comply The Hon. MATT CARTWRIGHT, this is an aggressive position, and that some did not affect, or could not have affected Ranking Minority Member, Subcommittee on less aggressive approach may be needed for HUD’s decision to pay. Economic Growth, Job Creation & Regu- trial. To date, however, we have not yet de- ‘‘The City will argue that HUD’s failure to latory Affairs, Committee on Oversight and termined an alternative approach.’’ Id. at 5. monitor its Section 3 compliance was con- Government Reform, Rayburn House Office Even if the Department of Justice had in- sistent with HUD’s general lack of oversight Building, Washington, D.C. of Section 3 during the relevant period. The tervened and secured a judgment against the The Hon. TRENT FRANKS, City on False Claims Act liability, moreover, city has already noted that previous federal Chairman, Subcommittee on the Constitution there is a significant risk that the District administrations were not concerned with and Civil Justice, Committee on the Judici- Court or the Court of Appeals for the Eighth Section 3 (a position with support in recent ary, Rayburn House Office Building, Wash- Circuit would, under the facts of this case HUD comments), and that it is unfair to re- ington, DC. quire a City to make boilerplate certifi- (including HUD’s apparent disregard of Sec- The Hon. JERROLD NADLER, tion 3 enforcement, and the defendant’s sta- cation each year, ignore the City’s non-com- Ranking Minority Member, Subcommittee on the tus as a taxpayer-funded entity) reject the pliance year-after-year, and then seek FCA Constitution and Civil Justice, Committee on ‘‘aggressive’’ approach of seeking to recoup relief when a new administration comes in the Judiciary, Rayburn House Office Build- all Section 3 grants. Such a decision would that is more concerned with compliance with ing, Washington, DC. hinder the Government and relators in fu- Section 3. DEAR CHAIRMEN JORDAN AND FRANKS AND ture False Claims Act cases in the Eighth Draft Intervention Memo at 7. Although the RANKING MEMBERS CARTWRIGHT AND NADLER: trial attorney was optimistic that these ar- Circuit’s jurisdiction. The undersigned are partners and co-chairs guments could be overcome, there can be no THE RISK OF NEWELL’S DISMISSAL ON PUBLIC of the Whistleblower/False Claims Act Prac- doubt that significant concerns about prov- DISCLOSURE GROUNDS tice Group at Cohen Milstein Sellers & Toll, ing materiality of the City’s noncompliance The Joint Staff Report also criticizes the PLLC. For over ten years, we have assidu- were evident long before the alleged quid pro Department’s declination on the grounds ously represented whistleblowers in legal ac- quo. that it exposed Mr. Newell to dismissal of his tions brought pursuant the federal False RELIABILITY OF THE DRAFT INTERVENTION qui tam suit on grounds that the Court Claims Act, 31 U.S.C. §§ 3729, et seq., and its MEMORANDUM’S DAMAGES CALCULATION lacked jurisdiction under the False Claims state counterparts in federal and state I also respectfully disagree with the Joint Act’s public disclosure bar. See Joint Staff courts throughout the country. We regularly Staff’s assertion that the Department of Jus- Report at 58; 31 U.S.C. § 3730(e)(4)(A) (2010). I engage in the evaluation of the viability of

VerDate Mar 15 2010 05:07 May 09, 2013 Jkt 029060 PO 00000 Frm 00023 Fmt 0624 Sfmt 0634 E:\CR\FM\A08MY6.014 S08MYPT1 rfrederick on DSK6VPTVN1PROD with SENATE S3238 CONGRESSIONAL RECORD — SENATE May 8, 2013 potential claims under those statutes and City whether or not the government had in- same laws that some colleagues some- work with relators to combat fraud against tervened in the case. In Rockwell Intl. Corp. v. times would like to forget are on the the government. We have been asked by com- United States ex rel. Stone, 549 U.S. 457 (2007), books, but these laws matter. Voting mittee staff to offer our opinion regarding the United States Supreme Court rejected rights matter. Fair housing rights mat- the effect of the Department of Justice’s de- the argument that government intervention cision to decline to intervene in the qui tam provides jurisdiction to a Relator who is not ter. The rights of people with disabil- cases of United States ex rel. Newell v. City of an original source. Even had the government ities matter. These laws are part of St. Paul and United States ex rel. Ellis v. City intervened, Mr. Newell would have been vul- what makes our country great. I am in- of Minneapolis, et al. What follows is that nerable to the exact same public disclosure credibly proud of the work Mr. Perez opinion. jurisdictional bar. has done at the Department of Justice On May 19, 2009, Relator Frederick Newell Likewise, in declining to intervene in Mr. to make those rights a reality after filed his qui tam action under the federal Newell’s qui tam action, the Department of years of neglect. He should be ap- False Claims Act against the City of St. Paul Justice did not ‘‘give up the opportunity to plauded, not vilified, for the service he in the United States District Court for the recover as much as $200 million.’’ (Joint District of Minnesota. On February 9, 2012, Staff Report, p. 4). A declination of interven- has provided to this country. the Department of Justice advised the court tion has never been recognized by any court Mr. President, it almost seems that that it declined to intervene in the case. On as tantamount to the termination of the when Mr. Perez’s name came up, there March 12, 2012, Mr. Newell filed an amended government’s right to pursue the claim as- was a controversy generated about complaint in response to which the City of serted in the action. In fact, the federal these cases in St. Paul involving whis- St. Paul filed a motion to dismiss based, in False Claims Act specifically provides that if tleblower types and that somehow he part, on the Public Disclosure Bar. the government initially elects not to pro- acted inappropriately and denied the At the time that Mr. Newell filed his ini- ceed with the action, it may intervene at a tial complaint in his action, the False government the ability to get back a later date upon a showing of good cause. 31 couple hundred million dollars or so. Claims Act provided a jurisdictional bar to a U.S.C. § 3730(c)(3). The government can de- relator’s qui tam action commonly referred cline to intervene in one action and, after That seemed to be a belief some of my to as the Public Disclosure Bar. Subse- that complaint is dismissed, decide to inter- colleagues on the other side had. So we quently amended and rendered a non-juris- vene in a subsequently filed action. Or the looked into it. We went through all the dictional basis for dismissal in the Patient government can institute and pursue its own documents, all the e-mails, and thou- Protection and Affordable Care Act of 2010, action under the False Claims Act. More- sands of pages, with ethics lawyers this section, 31 U.S.C. § 3730(e)(4), provided as over, the dismissal of Mr. Newell’s complaint both in the government and out. What follows: does not affect the government’s ability to ‘‘(A) No court shall have jurisdiction over we came up with was that Mr. Perez pursue the same claims itself. Thus, in de- acted ethically and appropriately at all an action under this section based upon the clining to intervene in the Newell and Ellis public disclosure of allegations or trans- actions, the government is not foreclosed times. There is no ‘‘there’’ there. So actions in a criminal, civil, or administra- from pursuing the claims that Mr. Newell the facts belie the belief, but it seems tive hearing, in a congressional, administra- could no longer himself pursue or to inter- that the belief carries on and that tive, or Government Accounting Office re- vene at a later date in the Ellis action, nor somehow the belief trumps the facts. port, hearing, audit, or investigation, or is it foreclosed from pursuing remedies that Well, if some of my colleagues want from the news media, unless the Attorney might be available under any other statu- to believe the worst about Tom Perez, General or the person bringing the action is tory or regulatory provisions. In fact, in de- they can believe that, but they have no an original source of the information. clining to intervene in these actions, it ‘‘‘(B) For purposes of this paragraph, facts to back it up. It is an unfounded ‘‘gave up’’ no rights or opportunities whatso- ‘original source’ means an individual who ever. belief. Is that what is going to guide has direct and independent knowledge of the We trust that the foregoing sheds light on this body in approving nominations for information on which the allegations are the effect of the government’s decision not this President or any President—that based and has voluntarily provided the infor- to intervene in the Newell and Ellis qui tam if I believe something and I can get mation to the Government before filing an actions and that this letter is helpful to the maybe some of my colleagues to join in action under this section which is based on work of your committees. the information.’’ and believe it, that is enough? That is Respectfully submitted, On July 20, 2012, the court granted St. sufficient to vilify a nominee, to try to GARY L. AZORSKY. Paul’s motion to dismiss, finding that it tear him down? JEANNE A. MARKEY. lacked subject matter jurisdiction over Mr. What about the facts? Don’t facts Newell’s action because of manifold public Mr. HARKIN. As Professor Stephen matter? Doesn’t the record matter? Of disclosures of his allegations predating the Gillers, who has taught legal ethics for course it does. And the facts, as proven filing of his complaint and because he was more than 30 years at New York Uni- time and time again, are that Mr. not an original source of the information on versity School of Law, wrote in one of Perez acted ethically and appropriately which the allegations were based. Mr. Newell these letters, Mr. Perez’s actions in has appealed the dismissal of his case and his at the Department of Justice at all appeal is currently pending before the United these cases ‘‘violate[d] no ethical rule times and especially in the two cases— States Court of Appeals for the 8th Circuit. that governs lawyers. He was acting in Magner v. St. Paul and Newell v. St. On February 18, 2011, Relators Andrew what he believed to be the best inter- Paul. That has been clearly brought Ellis, Harriet Ellis and Michael Blodgett ests of his client, which is what law- forth, that he acted appropriately and filed their qui tam action under the federal yers are required to do.’’ ethically. False Claims Act against, among others, the In short, Mr. Perez did his job at So I say to my colleagues on the Cities of Minneapolis and St. Paul in the DOJ, and he did it well. When it comes other side, believe what you want, but United States District Court for the District down to it, I think the fact that he did of Minnesota. On June 18, 2012, the Depart- that belief, mistaken as it is, should ment of Justice filed a Notice of Election to his job well is probably the source of not be used to tear down a good person, Decline Intervention. The defendants in that much of the generated controversy sur- to vilify a good person, to cast this per- case subsequently filed motions to dismiss rounding his nomination. Maybe some son in a light which is totally false. the Relators’ complaints, which the court people just don’t like Tom Perez pre- So, yes, Mr. President, there was an denied without prejudice. That case remains cisely because he is passionate about objection to our meeting today under pending as of the date of this letter. enforcing our civil rights laws and has this obscure rule of the Senate, but we The effect of the government’s decision not vigorously pursued such enforcement have rescheduled the meeting for 1 to intervene in these two qui tam cases is central to the issues presently being consid- in his current position. week hence. So in 1 week we will meet ered by your subcommittees. Indeed, it is im- I take great issue with the minority again, and we will vote to report out portant to understand that, contrary to con- leader’s suggestion today that Mr. the nomination of Tom Perez, and then clusory statements set forth in the Congres- Perez doesn’t follow the law or believe we will come to the floor. Again, I hope sional Committees’ Joint Staff Report of that it applies to him. I would respect- that it won’t be filibustered by my Re- April 15, 2013, the decision by the Depart- fully suggest that the Republican lead- publican colleagues but that we will be ment of Justice not to intervene in Mr. New- er needs to check his facts. To the con- able to vote up or down on Mr. Perez ell’s case did not allow the City of St. Paul trary, Tom Perez has had a remarkable based not upon what someone believes to move for dismissal of the case ‘‘on grounds that would have otherwise been un- career as a result of a determination to but what the facts are, what his record available if the Department had intervened.’’ make the promise of our civil rights is, what his record has been both in (Joint Staff Report, p. 58). In fact, the same statutes a reality for everyday Ameri- local government, State government, motion would have been available to the cans. Maybe these are some of the and at the Department of Justice.

VerDate Mar 15 2010 05:07 May 09, 2013 Jkt 029060 PO 00000 Frm 00024 Fmt 0624 Sfmt 0634 E:\CR\FM\A08MY6.015 S08MYPT1 rfrederick on DSK6VPTVN1PROD with SENATE May 8, 2013 CONGRESSIONAL RECORD — SENATE S3239 When you look at that record, it is an pitals, nursing homes, or dental offices of our condemnation are any cir- exemplary record of unstinting public across the country. cumstances where health care patients service in the best interests of the civil So with that, I object. are put in danger, where safety is in rights and equal rights of our country. The PRESIDING OFFICER. Objec- peril, where the consequences do dam- That is why, with his background, his tion is heard. age, or threaten damage, to the recipi- experience, and his dedication to fair- The Senator from Utah. ents of health care. Whatever the kind ness and justice, the fact that he has Mr. LEE. Mr. President, this week in of health care, whatever we may think actually worked in the Senate on the Philadelphia, a jury is deliberating the of it personally in terms of the merits HELP Committee—the committee that case of Kermit Gosnell. That doctor and the type of care provided, we ought has jurisdiction over the Department has been charged and tried for some of to condemn it, and that is the purpose of Labor—gives tremendous weight to the most gruesome atrocities ever en- and sense of the resolution I am offer- his background and insight into how to countered by the American justice sys- ing. be a truly great Secretary of Labor. tem. So if I may, I ask unanimous consent So we will vote next week. I hope As the grand jury opened its that the Senate proceed to the consid- there are not other kinds of road- harrowing report: eration of a Senate resolution express- blocks—unfounded roadblocks—thrown This case is about a doctor who killed ba- ing the sense of the Senate regarding into the path of his confirmation. We bies and endangered women. What we mean all incidents of abusive, unsanitary, or will do everything we can to make sure is that he regularly and illegally delivered illegal health care practices be con- this good person takes his rightful live, viable babies in the third trimester of demned—the text is at the desk; and I place as our next Secretary of Labor. pregnancy—and then murdered these ask that the resolution be agreed to, I suggest the absence of a quorum. newborns by severing their spinal cords with the preamble be agreed to, and the mo- scissors. The PRESIDING OFFICER. The tion to reconsider be laid upon the clerk will call the roll. Yet according to defense attorneys, table with no intervening action or de- The bill clerk proceeded to call the Dr. Gosnell is not a monster, not a se- bate. roll. rial killer, not a predator of vulnerable The PRESIDING OFFICER. Is there The PRESIDING OFFICER. The Sen- mothers and their helpless children. He objection? ator from Utah. is just an abortionist. The Senator from Utah. Mr. LEE. Mr. President, I ask unani- Mr. President, let me suspend my Mr. LEE. Reserving the right to ob- mous consent that the order for the speech momentarily. I understand my ject, as my friend, the Senator from quorum call be rescinded. friend, the Senator from Connecticut, Connecticut, is aware, we have only The PRESIDING OFFICER. Without wishes to make a motion. just received the language of this reso- objection, it is so ordered. The PRESIDING OFFICER. The Sen- lution in the last few minutes. Without ator from Connecticut. f having to read it closely, I am reluc- Mr. BLUMENTHAL. Mr. President, I tant to grant consent at this time. But UNANIMOUS CONSENT REQUESTS wish to offer the resolution that I and I will say I am heartened, and I think Mr. LEE. Mr. President, I ask unani- Senator BOXER, who is a long-time all Americans should be heartened, and mous consent that the Senate proceed champion of better health care for the the entire pro-life movement should be to the consideration of S. Res. 133 sub- citizens of our country, and Senator heartened by the clear implication that mitted earlier today. I further ask SHAHEEN, expressing the sense of the health regulations should be equitably unanimous consent that the resolution Senate that these practices will not be applied and enforced on abortion clin- be agreed to, the preamble be agreed tolerated in any setting, regardless of ics as they are on other health care fa- to, and the motion to reconsider be personal beliefs about the type of cilities. made and laid upon the table, with no health care being offered. Part of the reason we fear that Dr. intervening action or debate. This resolution is broader than the Gosnell’s clinic, if, in fact, the allega- The PRESIDING OFFICER. Is there resolution of the Senator from Utah. I tions are proven true, was not a rare objection? understand and sympathize with the outlier is that abortion clinics are gen- The Senator from Connecticut. basic objectives which, as I understand erally held to the same safety stand- Mr. BLUMENTHAL. Reserving the it, are to improve health care generally ards as hospitals, ambulatory, surgical right to object, I will have a request and to make sure the kinds of abuses facilities, et cetera. So on that basis, I with another resolution momentarily, being prosecuted in Philadelphia will object. but I understand the resolution of my not occur anywhere in this country. The PRESIDING OFFICER. Objec- friend from Utah. I believe this prob- I offer my resolution calling on the tion is heard. lem is broader than the one cited in his Senate to condemn such practices in The Senator from Utah. resolution. In fact, looking to the con- all health care settings, be they clinics Mr. LEE. Mr. President, if I may con- duct of the Philadelphia instance, I or hospitals, dental offices, anywhere tinue my remarks which I started a few would prosecute that case to the fullest in this country. They may be a small moments ago. extent of the law. I think the conduct— fraction and, hopefully, are a very According to his defense attorneys, or, more correctly, misconduct—in small fraction, of the kinds of cases we then, Dr. Gosnell is not a monster, not that instance was absolutely despicable would want to condemn. But we should a serial killer, not a predator of help- and abhorrent. condemn them wherever they occur, less mothers and their children. He is I am concerned about patient safety not just in one instance, not just sin- just an abortionist. In this context, Dr. in a variety of areas. They may be a gling out one case, but everywhere, Gosnell’s alleged crimes were just small fraction of the total number of anytime. abortions, and his facility, the so- health care cases in this country, but I might add as a former U.S. attorney called Women’s Medical Society—re- anytime, anywhere patients are endan- that while this case is before the jury, portedly strewn about with animal gered or threatened by criminal con- I think we need to be very careful waste, infectious instruments, and duct or malpractice, people should be about what we say in a public forum as fetal remains—was not, as the grand prosecuted and disciplined to the full respected as this one about the facts of jury alleged, ‘‘a baby charnel house.’’ extent of the law. These cases shock that case and about potentially pre- No, it was just a clinic. and horrify our sense of decency and judging the result. My understanding is His staff of allegedly unqualified, un- we understand the responsibility of the jury has not yet come back. If the trained frauds were not coconspirators health care practitioners anywhere, allegations are true—if the jury con- in the contract killing of newborns. No, anytime. cludes they have been proved beyond a they were just health care providers. My resolution, which I intend to offer reasonable doubt—then the punish- And the failure of local health inspec- after the Senator from Utah concludes ment should certainly be sufficiently tors and political officials to inves- his, will call upon our colleagues to severe and serious to fit those cir- tigate repeated claims of Dr. Gosnell’s condemn these actions in all health cumstances and well deserving of our barbarism was just a bureaucratic care settings, whether clinics, hos- condemnation. But equally deserving oversight—perhaps—or perhaps, as the

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