Watt implied he could use his position as head of a powerful financial regulator to help Simone Grimes obtain an executive position, the report found. He was also not “candid” with investigators and attempted to explain away his conversations with Grimes, some of which were recorded, as jokes or part of an attempt to mentor her, according to the report.
Investigators were not convinced by Watt’s explanations and accused him of two counts of misconduct. “We find that there are no circumstances under which it would be appropriate for the head of FHFA to induce a subordinate female employee to meet with him alone, in his apartment, for a conversation in which he professes his attraction for that employee and holds out opportunities for the employee to serve in specific executive positions over which he exercises total control,” the report says.
Watt, a Democrat, spent 21 years in Congress before taking over leadership of FHFA under President Barack Obama. The agency oversees two housing giants, Fannie Mae and Freddie Mac.
Watt and his attorney could not immediately be reached for comment.
Watt has denied the allegations and told investigators that “this is in a sense a wake up call, it’s a depressing wake up call,” particularly since men at the agency had stayed at his home in Charlotte and maintained a closer relationship with him than Grimes. “In my view, it’s time for me to ride off into the sunset because the standards have become so confused that it’s difficult to operate in them,” he said, according to a transcript of his interview with investigators.
Grimes said in an emailed statement to The Post that she was satisfied with the results of the IG report. “Standing up for myself ... has not been an easy thing to do,” Grimes said. “I hope all of this will make future complaints against high powered officials easier for the next employee (male or female) that finds themselves in a similar position.”
Grimes dismissed Watt’s explanation that he was attempting to mentor her as “clearly false.”
Employees should not “have to tell their boss more than once that they do not want a relationship with them other than professional, should not have to hear persistent references of attraction to their physical appearances, or be made to meet in compromising locations to discuss receiving equal pay owed under the law,” she said.
Grimes, 44, filed a federal complaint last year, alleging that Watt blocked her from receiving a promised raise and promotion when she rejected his advances. Over more than two years, Watt repeatedly asked Grimes to meet him outside the office, including inviting her to his vacation home in North Carolina, restaurants, the jazz club Blues Alley and his home, she has said.
Watt acknowledged the meetings, but disputed their significance. “I’ve done nothing with [Grimes] that I believe is improper,” he told investigators. “Ms. Grimes knows in her heart that there was no effort to pursue any kind of romantic relationship with her.”
But the report lays out several instances in which Watt told Grimes she was “gorgeous” and that he was “guilty” of having an attraction to her. He explained to investigators that he had called other people gorgeous and that it reflected a “friendship attraction.” But no other women Watt mentored had come to his D.C. apartment, investigators noted.
In an exchange with investigators, Watt stumbled as he attempted to justify his out-of-office meetings with Grimes. “So you have this conversation where you talk to her about the chief of staff position and other positions alone with her in your apartment with soft music in the background, and then tell her that she’s gorgeous, you’re attracted to her, and you can draw the line. I don’t get it,” the investigator said.
“Look, look, look, wait, wait, wait, wait. Wait a minute. Wait a minute. Wait a minute,” Watt responded. Later he said, Grimes walked in while the music was playing. “What am [I] going to do? Cut the music off and have a conversation with her.”
Mentoring employees has “gotten more and more difficult over the years,” Watt said, “which is one reason I’m glad my term as a supervisor of anybody is about to end because it’s gotten more and more difficult to mentor people.”
Watt also told investigators “he did not have a romantic attraction to” Grimes. Rather, he was concerned that she was attracted to him. Grimes often visited his office, and “the odd times at which the visits started to occur raised [his] suspicion that [Grimes] could be developing an attract to [him] that would be inappropriate,” the report says.
Watt suggested they meet outside of the office and after work to eliminate his suspicions about Grimes’s intentions, he told investigators. On the way to a D.C. restaurant, Rosa Mexicano, Watt told Grimes that there was an attraction between them that needed to be explored, but only to ascertain her reaction, he said.
“Given the Director’s stated concerns about the interests of [Grimes], the Director should have been especially scrupulous about conducting meetings with [Grimes] in FHFA’s offices,” the report says.
“Instead, by his own admission, he treated [Grimes] differently from other female mentees. A reasonable conclusion is that he did so because he was seeking an inappropriate relationship with her,” the report says.
Both Grimes and Watt were subpoenaed as part of the investigation and 20 other witnesses were interviewed. In addition to being sent to the White House, the results were referred to the U.S. Office of Special Counsel.