Lights Out: Fed Agency Settles Sex Harassment Suit Linked to Ex Mortgage Regulator Chief Mel Watt

Mel Watt, then the head of the Federal Housing Finance Agency, listens during a Financial Stability Oversight Council meeting Oct. 16, 2018, at the Treasury Department in Washington, D.C.
Photo: Alex Wong (Getty)

The Federal Housing Finance Agency has settled a sexual harassment claim brought by an employee against the man who once headed the agency, former North Carolina congressman Mel Watt.

The FHFA in a statement Friday did not provide details about what the settlement entailed, but the employee who’d sued the agency for $1 million, special adviser Simone Grimes, told Politico she saw the agreement as a victory for women like her in the wake of the #MeToo movement:

“Accountability might not come the way we want but I think it feels much better to have gone the distance and reached a resolution,” Grimes said in an interview.

“For women facing these issues, coming forward is imperative,” Grimes said. “As we’ve seen with the #MeToo movement, the more people come forward, the more people feel encouraged to come forward.”

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In May 2018, Grimes filed a complaint against Watt, claiming that he pressured her for sex during conversations about her salary with the agency, which oversees mortgage companies Fannie Mae and Freddie Mac.

Months later, in August 2018, she sued the agency for $1 million, claiming that she had gotten paid less than a man who’d had the title she held and that she’d been denied promotions because she’d refused Watt’s advances.

As Politico explains:

The complaint launched three investigations — by the U.S. Postal Service on behalf of the FHFA, by the FHFA inspector general, and by the Equal Employment Opportunity Commission.

[...]

[But] Watt [...] refused to participate in an administrative investigation, arguing that as a presidential appointee he was exempt from the FHFA anti-harassment policy for employees that he had signeda defense that angered lawmakers with oversight of his agency.

“The statute says the policies don’t apply to me; I don’t know how many more times I can tell you that,” Watt told the House Financial Services Committee as he angrily defended himself during the marathon hearing last September.

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Then the confirmation hearings—and sexual harassment accusations—arose regarding Supreme Court Justice nominee Bret Kavanaugh, Politico notes. And congressional members ratcheted up the pressure on Watt, an Obama appointee whose term as head of the FHFA was ending within months.

Per Politico:

Watt did submit to an interview in the inspector general probe last year, telling investigators that a recording of him saying he was attracted to Grimes meant only that he had “a friendship attraction.”

“We are not persuaded by the explanations offered by the FHFA Director,” the OIG wrote in its report, which was provided to a handful of officials in November and only became public in February, after Watt had stepped down.

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So, even though the inspector general investigation found that Watt had misused his office, he was not disciplined and was able to finish out his term in office.

Still, Grimes as well as her supporters see a silver lining.

“Since the #MeToo movement started, this is the first victory against a Senate-confirmed official,” John Tye, an attorney at the legal nonprofit Whistleblower Aid, told Politico. “We think this is an important marker that yes, Senate-confirmed officials are accountable.”

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