May 18, 2022

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White House Is Reviewing Recommendation to Fire Housing Finance Inspector General

The White House is evaluating recommendations to remove or discipline the Federal Housing Finance Agency inspector general following investigations from a federal watchdog and a pair of Republican senators that found a pattern of misconduct and abuse of authority by the IG. 

The Council of the Inspectors General on Integrity and Efficiency’s Integrity Committee and Sens. Chuck Grassley, R-Iowa, and Ron Johnson, R-Wisc., sent letters to President Biden on April 14 and 28, respectively, about their separate investigations into top leadership at the FHFA IG office regarding whistleblower complaints starting in 2017. The issues are centered on IG Laura Wertheimer who was nominated by former President Obama and confirmed in 2014.

“The [Integrity Committee] finds by a preponderance of evidence that IG Wertheimer abused her authority in the exercise of her official duties and engaged in conduct that undermines the integrity reasonably expected of an IG,” wrote committee chair Kevin Winters in the letter (first published by The Hill). She “showed a disdain and resistance towards congressional and IC oversight by fostering a culture of witness intimidation through a pattern of staff abuse and fear of retaliation. Furthermore, she wrongfully refused to cooperate with the IC’s investigation by denying the IC investigators full access to FHFA OIG personnel and documents.”  

For example, she gave several staff members “demeaning nicknames” for cooperating with Congress. She referred to two of them as “Boris and Natasha,” the villains in the “Rocky and Bullwinkle” cartoon series—just one instance of how Wertheimer “openly belittled her employees both for physical appearance and quality of their work,” said the report. 

In a footnote in the report, the committee noted that in 40 investigations conducted over 30 years, this was the first time an IG and staff had denied CIGIE investigators complete access to witnesses and documents. 

“Misconduct of this nature warrants consideration of substantial disciplinary action, up to and including removal,” the committee concluded. 

Some of the allegations also involved FHFA IG Chief Counsel Leonard DePasquale, Acting Deputy IG for Investigations Richard Parker and Associate IG Jennifer Byrne. There was also a “preponderance of evidence” that DePasquale and Parker “abused their authority and were fully complicit in IG Wertheimer’s refusal to cooperate” with the committee’s investigations, wrote Winters. However there was not sufficient evidence to prove wrongdoing by Byrne. 

Parker and DePasquale maintained they didn’t improperly hinder the investigation, according to the report.

“We have received the CIGIE report and are evaluating it,” a White House official told Government Executive on Tuesday.

Grassley and Johnson said in their letter, “the [committee’s] findings largely parallel what our offices uncovered.” Therefore, Wertheimer “should be removed from office, in a manner consistent with applicable statutory notification requirements.”

The senators said they started investigating whistleblower allegations against Wertheimer in October 2015, a little over a year after she was confirmed. The allegations “ranged from blatant abuses of authority involving coercive personnel actions, to flagrant violations of the Privacy Act by sharing personal identifying details of an Equal Employment Opportunity complaint with unauthorized personnel,” they wrote. “Whistleblowers also reported that IG Wertheimer expressed a desire to discriminate on the basis of age and gender as well as severely hindered the audit mission of the [Office of Inspector General] and she and other employees “sought to identify and disparage those who brought these complaints to Congress.” 

Emmet Flood, an attorney at Williams & Connolly LLP who is representing Wertheimer, told Government Executive in a statement (previously reported by other outlets), she “has been a superlative IG and members of her oversight committee have commended her for her frankness, courage and service,” nothing that she and her staff won the 2019 CIGIE Government Ethics Award for Excellence. “Anyone with an interest in her performance as IG can consult the FHFA-OIG website, where the record of her team’s accomplishments is public, extensive and incontestable.” The 2019 award was for the team’s investigation into allegations of misconduct by the then-FHFA director. 

Grassley and Johnson’s report “did not find that even a single witness had declined to cooperate out of intimidation or fear. And it expressly says that ‘it did not find evidence of actual retaliation,’” said Flood. 

This is not the first time the FHFA office has been under scrutiny. 

In 2015 and 2016, Grassley and Johnson raised concerns about the agency’s reorganization under Wertheimer and its impact on audits and evaluations. 

Politico reported in 2018 that CIGIE launched the investigation into Wertheimer and noted, “the Office of Special Counsel has conducted a similar probe.” (OSC could not comment on the reported investigation). 

The FHFA IG office did not respond for comment.