In a lengthy and tense hearing Thursday, Federal Housing Financial Agency Director Mel Watt denied accusations of sexual harassment while also asserting that the agency’s anti-discrimination and harassment policies do not apply to him.
Watt responded to accusations from Simone Grimes, a special adviser at the agency, in person for the first time Thursday, telling the House Financial Services Committee that he never touched Grimes and claiming that she used what he termed as “efforts to advise and mentor her,” to build a case against him.
Watt also implied that Grimes tampered with recordings of conversations with him, a charge that Grimes and her lawyer vigorously denied to reporters. The housing agency director, an Obama administration appointee, also claimed that the agency’s harassment and employee conduct policies do not apply to him.
“I report to the president of the United States and I can be removed if he finds that I have done something improper, with cause,” said Watt.
Grimes had accused Watt of blocking a raise and career advancement because she refused his romantic advances. She’s provided recordings of their conversations and other evidence supporting her case to federal investigators and committee staff.
“I have never in my professional career been diminished to just an object,” said Grimes. “Director Watt made several unwanted advances.”
She added: “I felt vulnerable and unsafe.”
The broader ‘MeToo’ movement and the charges of sexual impropriety threatening to derail Brett Kavanaugh’s Supreme Court nomination served as a backdrop for the hearing.
“I think that our nation is entering a watershed moment,” said Rep. Nydia Velazquez, D-N.Y., during questioning. “Women are stepping forward and making their voices heard.”
The fact that Watt, a former congressman who served on the committee until leaving for FHFA, is a friend or former colleague to many of those who questioned him from across the dais Thursday afternoon added an unusual wrinkle to the day’s proceedings.
Still, Watt was pressed by several members of the committee from both parties. His assertion that, as agency director, he does not have to follow the same standards as his employees was especially met with skepticism. Committee Chairman Jeb Hensarling, R-Texas, pledged to subpoena Watt and the agency if they did not cooperate further, despite the fact that both Hensarling, who is not running for re-election, and Watt, whose term will end, are expected to leave office in early January.
Other questions regarding spending on Fannie Mae’s headquarters and the state of Fannie and Freddie Mac, the government-sponsored housing enterprises, which remain under the custody of FHFA 10 years after the 2008 financial crisis, took a backseat to the scandal.
“The accusations that have been made against you are overriding this entire hearing,” said Rep. Maxine Waters, D-Calif., the committee’s top Democrat, addressing Watt.
Fannie Mae’s alleged violation of a ban on lobbying, put in place due to the current government control of the housing finance company, was one of those issues.
Watt agreed that Fannie had violated the ban when asked late in the hearing, but said he was essentially powerless to stop it.
“When we found out that they violated it we tried to take action,” said Watt. “I don’t know that there’s a real consequence.”
It’s unclear if today’s hearing will spur action on the longstanding issue of housing finance reform, an effort that has yet to yield major changes to the current system since the housing market meltdown a decade ago. But Hensarling and others highlighted the lobby ban violation as emblematic of the need to address the status quo.
“I would just submit for the record, this is a problem,” said Hensarling.
When asked following the hearing whether he intends to serve out the duration of his term, Watt responded simply: “Yes.”
