Housing regulator Mel Watt forcefully defended himself from sexual harassment allegations on Thursday, suggesting that his accuser had manipulated their encounters in a “systematic” effort to build a lawsuit by misconstruing his “efforts to advise and mentor her.”
Watt, the director of the Federal Housing Finance Agency, told his former colleagues on the House Financial Services Committee that he is a “big supporter of the #MeToo movement … but it cannot be a substitute for going through the legal process.”
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Watt spoke hours after agency employee Simone Grimes testified to the committee that he had repeatedly made sexual advances during conversations about salary concerns, leaving her feeling “unsafe and vulnerable.”
Members of the panel treated Grimes with deference and commended her decision to come forward. Both Committee Chairman Jeb Hensarling (R-Texas) and Ranking Member Maxine Waters (D-Calif.) spoke in unusually personal terms, reflecting the extraordinary cultural moment that spurred two simultaneous hearings Thursday featuring women bringing sexual misconduct allegations against powerful men.
“I am the father of two teenagers. … It is horrific to me to think that one day, when my daughter enters the workforce, that she might be harassed, that she might be discriminated against,” Hensarling said. “But I am also, also the father of a teenage son … [and] it is intolerable to me to think that a mere accusation of impropriety would somehow deny him of … due process.”
Given the high-stakes hearing on a sexual assault allegation against Supreme Court nominee Brett Kavanaugh taking place at the same time on the other side of the Capitol, Hensarling said, “I’m not sure this hearing will be heard, but it should.”
In his testimony, Watt floated the possibility that the 15 tapes Grimes told the committee would support her claims had been manipulated.
“There are two lawsuits in progress that will sort through and resolve all factual and legal issues related to her claims,” he said. Those include “whether someone tampered with tapes and transcripts of what was said and, if so, who did so.”
Grimes’ attorney disputed the suggestion, saying no one has tampered with tapes and that no one had raised that possibility before today.
When Rep. Dave Trott (R-Mich.) quoted one of the transcripts back to Watt – in which Watt told Grimes he wanted to “explore” their “attraction” and that “there are four types of attraction: emotional, spiritual, sexual or of friendship” – Watt did not dispute its accuracy.
“I absolutely think that if you’re going to mentor somebody you’ve got to know what they are thinking,” Watt said.
“About attraction?” Trott responded, noting he’s had “a lot of mentees” without talking about attraction.
“Well then you haven’t mentored them and figured out — If they are giving the wrong vibrations and you are not clear with them what the expectations are, I think you’ve got problems,” Watt said.
Rep. Barry Loudermilk (R-Ga.) called that response “probably the most ridiculous thing I have ever heard in Congress.”
The lawmakers repeatedly pressed Watt on his decision not to participate in an investigation of Grimes’ complaints by the U.S. Postal Service, which handled the probe for the FHFA, the agency that oversees mortgage giants Fannie Mae and Freddie Mac. Watt has argued that his status as a presidential appointee exempts him from agency anti-harassment rules for employees.
“The statute says the policies don’t apply to me; I don’t know how many more times I can tell you that,” Watt, whose term ends in January, said at one point. He told the committee he wasn’t asserting that he is “above the law,” prompting Hensarling to interrupt, “Director Watt, it sure sounds like you are.”
“You are on record citing a legal privilege that others do not recognize,” Hensarling said, before warning Watt to cooperate with a parallel probe by the FHFA inspector general.
“I don’t wish to make threats, Mr. Watt, particularly to a former colleague — but please know this committee will be monitoring this very, very closely,” added Hensarling, who is also retiring in January. “Even though you and I are getting ready to depart office at the same time, I will not hesitate one moment to use my power of subpoena if we have any scintilla of evidence that you are not cooperating fully in this investigation.”
Watt signed the anti-harassment policy he said did not apply to him. He conceded to Hensarling that nothing legally prevented him from voluntarily adhering to the policy or participating in the USPS investigation.
Grimes, an FHFA special adviser, filed a formal complaint earlier this year alleging that Watt repeatedly turned their conversations to sexual topics when she tried to discuss a pay raise.
Watt “more than once implied that his advances were linked to my ability to receive promotions and pay increases,” Grimes told the committee earlier Thursday, noting that the “frequency” of his advances and advice from friends in the security industry led her to start taping her encounters with him.
POLITICO obtained partial transcripts of some of Grimes’ tapes in July, including one 2016 conversation in which Watt steered the discussion to his feelings for Grimes. In a separate encounter, Watt asked about a tattoo on her ankle, saying, “If I kissed that one would it lead to more?”
Waters, who pushed for Grimes to testify, acknowledged that she has been friends with Watt — a former Democratic congressman from North Carolina who was a member of the Financial Services panel — for years, socializing with him and his wife and giving gifts to his grandchildren.
But she was careful to show respect for Grimes and openness to hearing her allegations, “no matter that I have visited his home and that I have dined with him.”
“What would you like this committee to do to help you pursue justice with your case?” Waters asked Grimes, stressing that the House panel is “not in any way duplicating what is going on on the Senate side” with the Kavanaugh allegations.
Waters also chided Watt for suggesting that a congressional committee hearing wasn’t the right place to air Grimes’ allegations. The panel on Tuesday invited Grimes to testify at an otherwise routine hearing on Watt’s agency after her lawyer requested she be given a chance to appear, prompting Watt to complain that he’d only been given two days to prepare for the change in focus.
“You raised the question about why we would allow her to come and use this forum to present her case when in fact there’s a lawsuit pending,” Waters said. “And while that has been the regular order of business … let me just share with you this is a different day, and a different time.”
Grimes’ complaint launched three investigations: one under Equal Employment Opportunity laws, being conducted by the Federal Deposit Insurance Corp. on behalf of the FHFA; an administrative investigation under the agency’s anti-harassment policy, conducted by the U.S. Postal Service; and an independent probe by the FHFA Office of Inspector General.
Grimes on Thursday lambasted the inspector general’s office for publicly naming her when it sued to compel her to comply with a subpoena for audio records and documents in August.
The move amounted to “publicly shaming” her, Grimes said, and “also serves to prevent other women from coming forward. … I think it was a shameful tactic by the inspector general to name me publicly.”
Inspector General Laura Wertheimer, who testified after Grimes and before Watt, admitted in a tense back-and-forth with Waters that she had revealed to Watt that Grimes had made a hotline complaint about an Equal Employment Opportunity matter related to a racial disparity in executives at the agency.
Wertheimer also said the inspector general’s office only named Grimes in court after conversations with the U.S. Attorney’s Office for the Eastern District of Virginia indicated the office would not be able to file its motion to compel Grimes to comply with a subpoena under seal.
Grimes, meanwhile, said the inspector general’s investigation — the one Watt has said he is participating in — would ultimately serve as a fig leaf to give Watt a “clean report.” Wertheimer contested the charge that she is too close to Watt.
Grimes also criticized the broader culture at the FHFA.
“I may be the only one sitting here, but I am not the only one who has experienced this disparity in pay” between men and women, she said.
The agency addressed the matter in detail for the first time Thursday morning.
The FHFA “takes allegations of discrimination and sexual harassment very seriously,” FHFA spokeswoman Megan Moore said in an email before the hearing started.
“Since these allegations were raised, the Agency and the Director have had separate legal counsel on this matter,” Moore added. “The Director has not made any decisions on behalf of the Agency with respect to any of these legal reviews. Further, the Director has had no involvement of any kind in any employment decisions relating to the complainant since these allegations were raised.”
Zachary Warmbrodt contributed to this report.