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Federal Housing Finance Agency Director Melvin Watt Accused of ‘Unwanted Advances’

Accuser: Watt made it clear he had ‘an attraction’

Federal Housing Finance Agency Direct0r Melvin Watt has been accused by a subordinate of unwanted advances and sexual harassment.  (Chris Maddaloni/CQ Roll Call file photo)
Federal Housing Finance Agency Direct0r Melvin Watt has been accused by a subordinate of unwanted advances and sexual harassment.  (Chris Maddaloni/CQ Roll Call file photo)

A Federal Housing Finance Agency manager leveled charges of unwanted advances and sexual harassment against Director Melvin Watt during a hearing Thursday before the House Financial Services Committee.

Simone Grimes testified that beginning in 2015, when she brought to the regulator’s attention that she was to be paid less than her predecessor in an executive position, Watt offered her a “number of positions” but made clear each time that he had “an attraction” to her.

“Director Watt made multiple unwanted advances toward me,” she told the committee. “The frequency of these advances . . . led me to begin recording many of our interactions,” said Grimes, who has brought an Equal Pay action in federal court against the agency and Watt. She also has accused the FHFA Office of Inspector General in its investigation of her allegations to have exhibited a “lack of independence.”

Grimes testified that she recorded 15 conversations with Watt that she believes a listener would conclude amounted to harassment. She said she turned all the recordings over to the committee and that the inspector general’s office has sued her to obtain copies.

Chairman Jeb Hensarling, R-Texas, emphasizing that the committee “is not a court of law,” cast the allegations against Watt and other investigations, including the committee’s investigation, as indicators of problems at the regulator and the entities it regulates.

“Housing finance is in dire need of reform and FHFA is in dire need of oversight,” Hensarling  said.

He noted that a simultaneous hearing a the Senate Judiciary Committee concerning accusations of sexual assault against Supreme Court nominee Brett Kavanaugh might overshadow his panel’s hearing.

“I’m not sure this hearing will be heard, but it should,” he said.

Watt is scheduled to testify later Thursday, as is Laura Wertheimer, the FHFA’s inspector general who has investigated the allegations. Testimony filed by Wertheimer and Watt did not make reference to Grimes’ allegations.

“Since these allegations were raised, the Agency and the Director have had separate legal counsel on this matter,” the FHFA said in a statement Thursday.

The agency said there are currently three investigations into the allegations, by the FHFA inspector general, the Equal Employment Opportunity Commission and by the U.S. Postal Service on behalf of FHFA. There is also a federal lawsuit that FHFA is a party to based on the Equal Pay Act, the agency said.

“[Watt] has not made any decisions on behalf of the Agency with respect to any of these legal reviews,” the statement said. “Further, the Director has had no involvement of any kind in any employment decisions relating to the complainant since these allegations were raised.”

Ranking member Maxine Waters, D-Calif., who had urged Hensarling to allow Grimes’ testimony, said that she has long been a friend of former Rep. Watt, who served on the Financial Services committee when he was a Democratic member from North Carolina.

“If this were a jury in a court of law, I would need to recuse myself,” Water said. “But this is not a jury or a trial. I have a responsibility to ensure that Simone Grimes, who has raised deeply troubling allegations against [Watt] . . . is heard before this committee.”

Republicans on the committee have been critical of FHFA’s 10-year oversight of housing finance giants Fannie Mae and Freddie Mac, since the pair were taken into federal conservatorship at the onset of the financial crisis in 2008. Both parties have said they were in favor of overhauling the finance system, but have not passed legislation to do so.

However, the parties tend to disagree over Fannie and Freddie’s roles in making homeownership more affordable for lower-income families. Democrats are more supportive of the effort and have been concerned about the agency lowering its support for such programs after Watt’s term in office ends in January and President Donald Trump chooses a nominee for the post. ICYMI: Schumer Decries Harassment of Trump Administration Officials

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