WASHINGTON — Scrutiny of Federal Housing Finance Agency Director Mel Watt continues to mount as he faces an equal-pay lawsuit from the employee who alleged he sexually harassed her and mainstream news outlets report more details about the growing scandal.
Simone Grimes, a special adviser at the agency, made
In an interview with American Banker Tuesday, Grimes' attorney said Watt's apparent defiance "reeks of arrogance."
"The right course is to apologize and make things better, not to cross your arms in front of your chest and be quoted by multiple sources as telling people you intend to defiantly resist resigning," said Diane Seltzer Torre of the Seltzer Law Firm.
But it is still unclear what will be the ultimate outcome of Grimes' initial equal employment complaint, which was first reported by Politico. Both the U.S. Postal Service and the agency's inspector general are investigating her claims, but Watt's term as FHFA director is winding down anyway. He is due to step down in January.
"The precise investigation timeline is uncertain, but the general expectation is that it could take until the end of 2018," said Isaac Boltansky, director of policy research at Compass Point Research & Trading, in a research note Tuesday.
On Tuesday, National Public Radio reported on the scandal, airing
According to her lawsuit, filed Monday in U.S. District Court for the District of Columbia, Grimes claims she was paid less than the man who held her position before her. She assumed the special adviser duties in addition to her previous duties as a supervisory program management analyst but received about $70,000 less per year than her male predecessor, her lawsuit said.
She alleged the pay discrepancy was related to her turning down Watt's advances. (The FHFA and Watt declined to comment.)
"Director Watt directed her back to their prior conversations, asserting that 'You didn’t promise me anything, and I didn’t promise you anything,' '' according to the court documents. "Director Watt was referencing the fact that she did not promise him sexual favors, so he did not promise her a pay increase."
“As a result of Defendant FHFA’s unlawful conduct, Plaintiff Grimes has suffered, and will continue to suffer harm, including but not limited to lost earnings, lost benefits, and other financial losses, as well as non-economic damages including but not limited to emotional and physical distress, humiliation, embarrassment, and mental anguish,” the lawsuit reads.
Grimes told
Politico first reported that Watt had been accused of sexual harassment July 27. Watt said in a statement then that the accusations were “obviously intended to embarrass or to lead to an unfounded or political conclusion.”
The agency has been
The director of the FHFA can be removed for cause, but there is no “immediate catalyst for substantial change,” wrote Jim Vogel, the executive vice president and manager for the Interest Rate Strategies Group for FTN Financial, in a recent research note.
In his note, Boltansky said whenever Watt does depart the agency, the White House is expected to use its statutory authority to appoint an acting director, which would have to be someone already Senate-confirmed for another position. Potential candidates, he said, include Comptroller of the Currency Joseph Otting; Mick Mulvaney, director of the Office of Management and Budget and acting director of the Consumer Financial Protection Bureau; and Michael Bright, who is awaiting Senate confirmation to run Ginnie Mae.
The House Financial Services Committee has
