Whistle-blower blames lost millions on deal by labor pick Perez

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Whistle-blower blames lost millions on deal by Labor pick Perez

Frederick Newell, a part-time minister and small-business owner, says he thought he was helping the government when he blew the whistle on the alleged misuse of job-assistance funds in St. Paul, Minn.

At first, the Justice Department agreed with him. Agency attorneys recommended in October 2011 that it join his false-claims complaint against St. Paul, a type of lawsuit that, if successful, also would have paid him millions of dollars as a reward for ferreting out waste and corruption.

Then, several months later, the department abruptly reversed course. It decided not to join the case as part of a negotiated settlement in an unrelated lawsuit brokered by Thomas Perez, the head of the Justice Department’s civil-rights division whom President Barack Obama has nominated to be the next secretary of labor.

The circumstances surrounding the Justice Department’s decision are emerging as a potential obstacle to Perez’s confirmation. Republican lawmakers say the deal he struck cost taxpayers millions of dollars, and some GOP senators say they want to examine whether Perez acted improperly in persuading St. Paul to drop its high-court appeal.

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