Whistleblower Attorneys Demand Discipline for Departing Housing Agency Chief

Top officials at the Federal Housing Finance Agency are being pressured to decide soon whether to impose discipline on Director Mel Watt, who is set to retire on Jan. 6 with full benefits, in response to investigator findings that he sexually harassed a female employee who complained of unequal pay.

Attorneys at the nonprofit firm Whistleblower Aid, who are co-counsels representing employee Simone Grimes, wrote a pair of letters in mid-December to FHFA General Counsel Alfred Pollard and Human Resources Director Andrew Wasilisin arguing that the agency under the law has both a duty and a responsibility to act. They also sought “justice” for client Grimes as part of a broader bid to curb sexual misconduct in government.

“Watt’s treatment of Ms. Grimes, and his public claim that he is above his own rules, are wrong, dangerous and illegal,” wrote John Tye, founder and CEO of the nonprofit, on Dec.12. Citing U.S. Code Title 5, Part 2635, the attorney said “your offices have the authority and the duty to discipline Watt,” adding that “relevant Senate staff counsel” have agreed that they have the unilateral authority.

The story broke last July when Politico reported that Watt, age 72 and a former Democratic House member from North Carolina, had been recorded by Grimes making sexual comments about his attraction to her beginning in 2015, at a time when she had complained that she was being paid less than a male employee doing the same job.

Her complaint focused on Watt having insisted that she meet with him at his beach house to discuss higher pay after a promotion, where some of the sexually oriented comments are said to have occurred.

Grimes’s complaints—including one legal filing seeking $1 million in back pay and compensation in U.S. district court—prompted investigations not only by the agency inspector general, but an investigative unit of the Postal Service and by the Equal Employment Opportunity Commission.

Watt himself declined to cooperate with the investigations, saying the rule didn’t apply to his position. He released a statement in July saying, “The selective leaks related to this matter are obviously intended to embarrass or to lead to an unfounded or political conclusion. However, I am confident that the investigation currently in progress will confirm that I have not done anything contrary to law.”

The press office for the agency, which oversees Fannie Mae and Freddie Mac, declined to comment. The IG did not respond to Government Executive inquiries.

FHFA’s IG released only the cover page of the report on Dec. 1, but press reports and Whistleblower Aid said it concluded that the FHFA director “misused his office to secure personal advantage.”

On Dec. 13 the lawyer’s group followed up with a second letter citing “new details” from the FHFA inspector general report concluding that, “We find there is no circumstance under which [Watt] should have coerced a subordinate to come to his house to discuss employment matters.”

The scrappy group with an eye for public relations has also set up a “fire Mel Watt” petition and picketed the agency headquarters in November and December. As of Dec. 20, the petition had 2,403 signatures.

“Our first priority is justice for Simone personally [and] is to stop harassment and obtain back pay with penalties and interest and career advancement,” Tye told Government Executive. “We very much want to send a message that there are consequences for this kind of treatment of federal employees. Since the ‘Me Too’ era started,” he continued, “there hasn’t been a Senate-confirmed executive branch official either fired or resigned due to sexual harassment.”

The agency general counsel and human resources director should directly implement disciplinary action, Tye urged, faulting both the agency and Congress for failing to act. “The president has the unilateral authority to fire Director Watt,” he added, and as a Senate-confirmed official, Watt could be impeached.

Grimes herself told Government Executive on last week that the experience has “heightened my awareness of how little repercussions there are for people who commit such unlawful activity,” and given the suffering of the person who was harassed, “it’s very unbalanced.” The disciplinary actions against Watt, she said, could come “in a range, from making a public statement, to taking a day without pay, to firing, to anything in between.”