GAO to investigate CFPB discrimination charges

by Ryan Smith04 Aug 2014
The Government Accountability Office will begin an investigation into the organizational culture and management practices of the Consumer Financial Protection Bureau. The investigation comes after months of allegations that discrimination and retaliation is rampant at the agency.

The investigation was requested by Rep. Patrick McHenry (R-N.C.), chairman of the House Financial Services Oversight and Accountability Subcommittee. Joining McHenry in the request were Financial Services Committee Chairman Jeb Hensarling (R-Texas) and Consumer Subcommittee Chairman Shelley Moore Capito (R-W.V.)

“Since the Subcommittee opened its investigation into allegations of discrimination and retaliation at the CFPB, no fewer than 32 employees have come forward about their maltreatment,” McHenry said. “These 32 brave leaders have come forward to do what is right: to protect their colleagues who suffer, and they have stood up even in the face of retribution from their managers if they are found out. Shortly, all CFPB employees will have an opportunity to confidentially share all of their concerns with the Government Accountability Office.”

Since April, the subcommittee has been conducting an investigation into what a whistleblower called “a pervasive culture of retaliation and intimidation that silences employees and chills the workforce from exposing wrongdoing.”

The subcommittee first heard from CFPB attorney Angela Martin, who testified that she and her fellow employees “have suffered and are suffering at the hands of inexperienced, unaccountable managers.”

Misty Raucci, an independent investigator hired by the CFPB to look into Martin’s allegations, concluded that Martin’s claims were valid. And on May 21, employee union representative Ben Konop testified that women and minorities employed by the CFPB alleged pay disparities between them and “similarly situated white male colleagues.”

“To date, the Bureau has denied each of these grievances at all stages, often using inconsistent reasoning, despite what I feel is convincing evidence of low pay for numerous women and minority workers,” Konop testified.

On June 18, CFPB employee Ali Naraghi testified that he was the victim of repeated ethnic slurs and that “the culture of intimidation and retaliation” at the agency “makes it very difficult for employees to raise concerns about mistreatment, mismanagement and abuse of authority.”

At the same hearing, former CFPB employee Kevin Williams testified that “the frequency and duration of these occurrences, speaking of discrimination, created a hostile work environment for all blacks at the Bureau whether they were unwitting manipulated black managers or mistreated hard-working black employees.”

CFPB Director Richard Cordray testified to the subcommittee last week that agency managers now receive “considerably more” training in workplace issues than they had before.

“What I've come to see frankly is I don't think we did enough of that in the beginning,” he said. “It was frankly probably an oversight of the bureau and just kind of reflective of the start-up phase, perhaps, but it hurt us, I think, a great deal in various respects.”

McHenry, however, said new training standards weren’t good enough and that bad managers should be fired.

“The problem is a CFPB management culture that condones intimidation, discrimination, and retaliation. And if the director has failed to reprimand and remove bad managers, then the problem is also his leadership – or lack thereof,” he said.