The Federal Housing Finance Agency has reached a settlement with an employee who accused former Director Mel Watt of sexual harassment, ending a 16-month saga that spawned three government investigations and an eight-hour congressional hearing.
The terms of the settlement were not made public, but FHFA special adviser Simone Grimes, who sued the agency for $1 million last year, said she was happy with the resolution of her claims against Watt.
The agreement comes almost exactly a year after Grimes testified before Congress on the same September morning that Christine Blasey Ford detailed her allegations against Supreme Court nominee Brett Kavanaugh on the other side of the Capitol — a split-screen that marked an extraordinary cultural moment as Washington reckoned with the #MeToo movement.
A lawyer for Grimes cast the settlement as a major win for the two-year-old movement.
“Since the #MeToo movement started, this is the first victory against a Senate-confirmed official,” said John Tye, an attorney at the legal nonprofit Whistleblower Aid. “We think this is an important marker that yes, Senate-confirmed officials are accountable,” he added.
Watt’s five-year term as the director of the FHFA, the regulator responsible for overseeing mortgage giants Fannie Mae and Freddie Mac, ended as scheduled in January. He was not disciplined, despite an inspector general investigation concluding that he had misused his office.
“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.”
Grimes filed a complaint with the FHFA in May 2018, accusing Watt of making repeated sexual advances during conversations ostensibly about her salary. In transcripts of one 2016 conversation obtained by POLITICO, Watt steered the discussion to his feelings for Grimes. In a separate encounter, he asked about a tattoo on her ankle, saying, “If I kissed that one, would it lead to more?”
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.
Grimes then sued the agency in August 2018 for $1 million, alleging that the agency paid her less than the man who had held her position before her and had denied her a raise because she rejected Watt’s advances.
When Grimes complained to Watt that he hadn’t addressed her pay situation, the lawsuit said, “Director Watt directed her back to their prior conversations, asserting that, ‘You didn’t promise me anything, and I didn’t promise you anything.’”
The FHFA released a short statement today saying Grimes had raised “serious issues” and that the agency was “pleased to have resolved these matters.”
Watt had 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 signed — a 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.
The imbroglio put lawmakers in an uncomfortable position. Watt, who represented a North Carolina district in Congress for two decades, had been a well-liked member of the committee and a popular figure in the Congressional Black Caucus before President Barack Obama tapped him to be the nation’s top housing regulator in 2014. He was also the last remaining Obama-appointed regulator, with only months left on the job, when the scandal surfaced.
In the days after reporting the investigation last summer, POLITICO sought comment from more than two dozen lawmakers, nearly all of whom ignored requests for comment. It took the Kavanaugh allegations — which thrust Washington into a freshly partisan grappling with the #MeToo movement — to prod action on Watt.
“This is a different day, and a different time,” Rep. Maxine Waters (D-Calif.), then the ranking member of the committee, said during the hearing. Waters, now the chairwoman of the committee, had pushed to have Grimes testify at what had been scheduled as a routine hearing on oversight of the agency.
Watt told Congress that the pending lawsuit would “sort through and resolve all factual and legal issues related to her claims.”
Watt was never deposed as a part of the suit, according to lawyers for Grimes, who said it was only after the change in leadership at the agency — new FHFA Director Mark Calabria was sworn in in April — that the agency became responsive to their concerns.
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.
Whistleblower Aid, which hired a car to drive around Washington with a rolling billboard saying “Fire Mel Watt” last fall, is now pushing to have the former director’s retirement benefits terminated.
The group raised the idea of revoking the benefits with the White House Counsel’s office, Tye said, adding that the White House said the recommendation should come from Congress.
Grimes, meanwhile, remains an employee at the FHFA but said she has developed a passion for holding organizations accountable.
“You go through something like this and I think it changes you,” she said. “You realize how important it is for there to be more wholesale changes, and while this is a small victory there is more work to be done.”
Article originally published on POLITICO Magazine