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Why the Investigation of Mel Watt Is Justified

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While the Senate has been poring over the youthful misadventures of Supreme Court nominee Brett Kavanaugh, several House lawmakers, with far less fanfare, have been focusing on a more plausible charge of misconduct involving an ex-colleague, Mel Watt. On September 26, Watt, a former 11-term North Carolina congressman who since January 2014 has headed the Federal Housing Finance Agency (FHFA), was grilled at a hearing of the House Financial Services Committee concerning allegations about his sexual harassment of a female FHFA employee. “She deserves to be heard and she needs to be heard,” said Chairman Jeb Hensarling, R-Tex. Watt denies all wrongdoing, but evidence might not be on his side.


Melvin Luther “Mel” Watt, now 73, a trained lawyer and a native of Charlotte, first was elected to Congress in 1992, a beneficiary of gerrymandering to ensure black representation. During his tenure, he specialized in banking, housing and economic development issues, becoming a ranking Democrat on the House Financial Services Committee. Along the way, he displayed a penchant for racially inflammatory comments. In 2005, for example, during a hearing held by the National Commission on the Voting Rights Act, he said, “There would be a substantial majority of white voters who would say that under no circumstances would they vote for an African-American candidate.” Such voters, he emphasized, “need to be factored out of the equation” because “I’ve got no use for them.”

Eventually, Watt changed careers. In July 2008, with the financial services industry in freefall, Congress established a new entity, the Federal Housing Finance Agency, to be conservator of Fannie Mae and Freddie Mac. The two federally-chartered mortgage corporations, with a combined several trillion dollars of assets under management, by then had become dangerously undercapitalized. FHFA would provide strict supervision to return these companies to soundness. During 2011-12, the housing industry recovered from its meltdown, in part due to FHFA Acting Director Ed DeMarco’s reluctance to forgive seriously delinquent Fannie Mae/Freddie Mac-backed loans. This earned him the enmity of the Left, which convinced President Obama to replace him. After reviewing potential candidates, Obama settled upon Mel Watt. Watt was approved by the Senate in December 2013 and sworn in for a five-year term the following January.


The issue of Mel Watt’s skills as a Fannie Mae/Freddie Mac conservator lately have taken a back seat to his relationship with a female FHFA employee named Simone Grimes. This past August 20, Ms. Grimes filed a civil suit in federal court against the agency, claiming Watt had denied her a promised pay raise because she had rejected his sexual overtures. This action was on top of a sexual harassment suit she filed against Watt in May. Starting in September 2015, and repeatedly thereafter, she alleges, Watt made passes at her during private meetings about her level of compensation despite her objections. Moreover, Grimes claims, FHFA Inspector General Laura Wertheimer tried to intimidate her from going public with her complaint and even revealed her identity. Grimes’ allegations led to separate probes by the Federal Deposit Insurance Corporation, the FHFA Office of Inspector General and the Postal Service. Her August lawsuit is seeking $1 million in damages, plus back pay and lost benefits.

Ms. Grimes, now 44, who began her position as an FHFA management analyst in December 2014, told the House Financial Services Committee at its September 26 hearing that she has tapes revealing at least 17 instances of sexual harassment by her boss over a two-year period. Some of those tapes made their way into the possession of the Politico website. In one transcript, Watt could be heard saying that he wanted to explore their mutual attraction. There are four types of attraction, he emphasized – emotional, spiritual, sexual and friendship. In another tape, Watt noticed a tattoo on Ms. Grimes’ ankle and asked, “If I kissed that one would it lead to more?” In her testimony, Grimes asserted Watt made her feel “unsafe” and vulnerable.”


Hours later, it was Watt’s turn to testify. He defended his behavior as an effort to “advise and mentor her,” adding that he supports the anti-harassment #MeToo movement. He also stated that the material evidence may have been doctored. “There are two lawsuits in progress that will sort through and resolve all factual and legal issues related to her claims,” he said, raising the possibility that tapes and transcripts were altered. His assertions were unconvincing to certain committee members. Rep. Barry Loudermilk, R-Ga., for one, called Watt’s statement likening of sexual overtures to mentoring “ridiculous.”

Chairman Jeb Hensarling, who, like Watt, is stepping down from office this January, appealed to colleagues to avoid hasty conclusions. “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,” he said. “But I am 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…due process.” Hensarling also cautioned Watt, “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.”

All this appears to be a classic case of “he said, she said.” Simone Grimes does not seem to be the benevolent, wounded soul suggested by her testimony. Clearly, it was she who secretly taped her boss on repeated occasions – behavior that should raise ethical concerns. They very fact that she seeks more than $1 million in damages and lost compensation suggests a certain greed on her part. That said, Watt likely used his position as FHFA director as a means of extracting sexual favors. As new information comes out, the truth hopefully will manifest itself, and if necessary, disciplinary action will be taken. Watt’s term ends in a few months. Unless he resigns in the interim, a cloud will continue to hover over FHFA.


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