Mortgage

FHFA report declares former Director Mel Watt guilty of sexual misconduct

Accuser refused to comply with FHFA's inspector general

A new report released by the Federal Housing Finance Agency's inspector general found former FHFA Director Mel Watt guilty of the sexual misconduct claims made against him.  

“We found that the FHFA director violated Section 702 when he attempted to coerce or induce the PMO Manager to engage in a personal relationship with him by suggesting or implying he would use his official authority to assist her in attaining an executive position with FHFA,” the report states.

The report was completed in late November and sent to the White House but President Donald Trump took no action against Watt, according to the Washington Post.

While the investigation into the issue began back in the summer of 2017, the news was leaked of the investigation in July 2018. The employee who accused Watt, Simone Grimes, began to speak out publicly about her accusations.

Grimes released tapes where Watt made comments such as, “Well, you probably want to know what I wanted to talk to you about. I mentioned to you there is an attraction here that I think needs to be explored. In my experience, there are four types of attraction: emotional, spiritual, sexual or of friendship. So, the exercise here is to find out which one exists here.”

In fact, there were several tapes released of conversations between the two. From the OIG report:

In a recording of a portion of their conversation in the FHFA director's apartment, the director can be heard to intermingle comments about his attraction to the PMO Manager and his admiration of her physical appearance with a discussion of possible paths by which she could advance into FHFA' s executive ranks.

However, before they finished the investigation, the OIG explained that Grimes stopped responding to its requests, and never released the remainder of the tapes the office believes she has. Despite this missing information, the report declared that Watt is guilty of misconduct, saying:

We find that there are no circumstances under which it would be appropriate for the head of FHFA to induce a subordinate employee to meet with him alone, in his apartment, for a conversation in which he professes his attraction for that employee and holds out opportunities for the employee to serve in specific executive positions over which he exercises total control.

We find that the Director lacked candor when he omitted information that was material to our inquiry. Specifically, he omitted: (1) any mention of his personal friendship with, and mentorship of, the PMO Manager; and (2) that he had a “plan,” dating back to at least June 2016, under which the PMO Manager could advance into FHFA’s executive ranks.

But Watt claims the OIG doesn’t have the full story. In fact, he says if they were to hear the missing tapes, they would see Grimes actually began many of the conversations.

“He claims that this report is incomplete because we lack the balance of the recordings made by the PMO Manager of her conversations with the director,” the report stated. “The director states that the missing recordings would show that the PMO Manager, and not the director, initiated most of the conversations.”

But he never denies the original claims made against him including that he invited the manager to meet with him alone in his apartment, that during that meeting he discussed specific paths forward for the employee to be promoted and that he knew the employee wanted that position.

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