Senators Call for Removal of FHFA Inspector General

FHFA Office of Inspector General

“The only thing this watchdog appears to hunt is her own employees,” wrote U.S. Senators in a letter to President Biden calling for the removal of Laura Wertheimer, the inspector general (IG) for the Federal Housing Finance Agency (FHFA). Senators Chuck Grassley (R-IA) and Ron Johnson (R-WI), members of the Senate Judiciary Committee, wrote to the President on April 28 following a scathing report on Wertheimer’s misconduct released by the Council of the Inspectors General on Integrity and Efficiency (CIGIE).

CIGIE released a report on April 14 detailing the findings, conclusions, and recommendations stemming from a three-year investigation into Wertheimer and her colleagues in the FHFA Office of Inspector General (OIG). CIGIE was created by Congress “to be the independent mechanism that ensures senior officials in the IG community ‘perform their duties with integrity,’” according to the report.

The CIGIE report finds that Wertheimer and a number of other officials in the FHFA OIG “abused their authority in the exercise of their official duties,” and that Wertheimer “engaged in conduct that undermines the integrity reasonably expected of an IG.” The report recommends “consideration of substantial disciplinary action, up to and including removal.”

Wertheimer was confirmed in 2014 as the IG of FHFA, which oversees mortgage finance giants Fannie Mae and Freddie Mac. According to Senators Grassley and Johnson, their offices began investigating whistleblower allegations against Wertheimer soon after her confirmation. “These allegations ranged from blatant abuses of authority involving coercive personnel actions, to flagrant violations of the Privacy Act by sharing personal identifying details of an Equal Employment Opportunity complaint with unauthorized personnel,” the Senators’ letter states.

Grassley and Johnson subsequently requested that CIGIE investigate the allegations against Wertheimer. According to their letter, CIGIE’s findings substantiate many of the allegations made by the whistleblowers. The Senators note that their offices’ investigations into the matter, as well as CIGIE’s, were “only possible thanks to the brave whistleblowers that came to us and exposed themselves to the potential of, and in some cases actual, retaliation.” “In short,” their letter states, “without these whistleblowers, this IG’s abhorrent behavior would have likely gone unnoticed.”

The crux of CIGIE’s findings is that Wertheimer “abused her authority by creating and fostering a culture of abuse and intimidation for her staff.” Wertheimer allegedly disparaged employees she deemed disloyal and sought to intimidate whistleblowers. In particular, Wertheimer and her “inner-circle” of leadership openly mocked and belittled FHFA employees who cooperated with Congressional investigators.

For example, according to the report, Wertheimer referred to one senior employee who spoke with Congressional investigators as a “weasel” in front of her staff and “took the extraordinary step further step of purchasing and distributing a children’s book called Weasels to multiple senior FHFA OIG employees.”

“Referring to employees as spies and weasels, and mocking and handing out derisive books to humiliate, demean, or embarrass colleagues is inappropriate on its face and is exacerbated by IG Wertheimer’s employment of these techniques against actual or potential witnesses and whistleblowers – the very people IGs are supposed to protect,” the report states.

The report further finds that Wertheimer and FHFA OIG officials, Chief Counsel Leonard DePasquale and Acting Deputy IG for Investigations Richard Parker, impeded the CIGIE investigation by denying investigators full access to FHFA OIG documents and personnel. Wertheimer, DePasquale, and Parker’s impedance of the investigation kept CIGIE “from having the necessary information to make findings on the remaining allegations of misconduct,” according to the report.

Despite not being able to substantiate all allegations of misconduct, CIGIE determined that Wertheimer’s treatment of employees and attempts to undermine investigations into her office “suggests she did not appreciate the fundamental leadership and oversight principles reasonably expected of a federal inspector general.” The CIGIE also determined Wertheimer, DePasquale, and Parker all abused their authority based on a “preponderance of the evidence.”

The President has the sole authority to remove a federal IG. In their letter to President Biden, Senators Grassley and Johnson state: “IG Wertheimer has failed to meet the duties described by the IG Act. Her behavior certainly falls far short of your calls for unity, transparency, and integrity… She should be removed from office, in a manner consistent with applicable statutory notification requirements.”

Grassley’s call for the Wertheimer’s removal is particularly notable because he has been an outspoken proponent of protecting IG’s from unwarranted removal. In April, Grassley reintroduced the Securing Inspector General Independence Act which requires that a president provide “substantive rationale, including detailed and case-specific reasons” prior to removing an IG.


The CIGIE Report

The Senators’ Letter to President Biden

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