A former top Trump administration appointee at the Consumer Financial Protection Bureau “may have abused his authority” and “misused his position for private gain” in an attempt to defuse an article from The Washington Post about online posts in which he questioned whether the n-word was racist, according to an inspector general’s report.
Before the article was published, Eric Blankenstein, a policy director at the CFPB responsible for enforcing the country’s fair lending laws, asked a subordinate to write a statement in support of him that also “created the appearance of a violation” of ethics rules, according to the report, which was obtained by The Post through the offices of Democratic Sens. Elizabeth Warren (Mass.) and Sherrod Brown (Ohio). The subordinate, Patrice Ficklin, told investigators she didn’t feel she had a choice and was given little time to write the statement in which she described Blankenstein as “collegial, thoughtful and meticulous.”
Ficklin, a career official who serves as assistant director of the Fair Lending Office, was not named in the heavily redacted 14-page report, but the statement cited in the report matches one provided by the CFPB from Ficklin.
About the time the article was published, the agency’s then-acting director, Mick Mulvaney, was overhauling Ficklin’s department, including stripping it of its enforcement powers. “There was no question that I was going to give a statement. I didn’t feel I could say no because I needed to do that in order to preserve my program,” Ficklin told investigators, according to the report. She was on leave at the time.
Ficklin also had been asking Blankenstein “for months” to complete a review of a periodic CFPB Fair Lending Report. He turned in the document at about the same time he requested Ficklin’s statement but, she told investigators, he “gutted the thing … [striking] whole sections of it.”
Blankenstein told investigators the request for the statement was a “favor” and not an order. The inspector general found that Blankenstein did not coerce Ficklin, abuse her time or engage in gross mismanagement.
The inspector general did not recommend any specific action be taken based on the report, which was completed May 7 but not publicly released.
Brown and Warren have asked for another IG investigation, this time concerning the Office of Fair Lending. The IG report “raises additional, serious concerns about whether the dismantling of the [Office of Fair Lending] was the result of a racial animus and an improper political agenda,” Warren and Brown said in a letter Monday to the Office of Inspector General.
On Sept. 26, The Post reported that in several blog posts written more than a decade ago, Blankenstein repeatedly questioned the need for special enforcement of hate crimes. “Shouldn’t we be more concerned that the crime happened period?” he wrote. “Does it matter that someone got beat up because they were black, or does it matter that someone got beat up?” In a 2004 post, Blankenstein wrote that a proposal at the University of Virginia to impose harsher academic penalties for acts of intolerance was “racial idiocy.”
At the CFPB, which was created after the 2008 financial meltdown, Blankenstein was responsible for supervising lenders and enforcing an array of consumer protection laws, including the four-decade-old Equal Credit Opportunity Act, landmark civil rights legislation aimed at protecting black consumers and those of other minorities from discriminatory practices and promoting “fair lending.”
One day after The Post article was published, Blankenstein asked Mulvaney whether he should resign, according to the report. Blankenstein, who was applying for a job in another department, the Office of Comptroller of the Currency, was upset about the article and viewed himself as “perhaps unemployable for the rest of my life.”
Mulvaney told him “he wasn’t going anywhere” and had been “smeared” by The Post, Blankenstein told investigators. “Blankenstein described this encounter to him as Mulvaney giving him a high-five that morning in sort of, celebration of the article,” according to the inspector general’s report.
Mulvaney is now President Trump’s acting chief of staff.
Though Mulvaney downplayed the report, Blankenstein faced an open rebellion at the CFPB, and several Democratic senators called for him to be fired. Ficklin confronted Blankenstein after The Post article and questioned whether his views had bled over to his work, citing a redlining investigation that included the circulation of a “patently racist email.” “You were still saying that you’re not sure that that’s evidence of racism,” she said.
Blankenstein later said he regretted “some” of the things he wrote. “The tone and framing of my statements reflected poor judgment,” he said in a note to colleagues in October 2018.
Blankenstein announced his resignation shortly after the report was completed in May. He joined HUD’s Office of General Counsel as a senior counsel, which required a pay cut. At the CFPB he earned $259,500 a year, making him among the highest-paid employees in the government. At HUD, his salary was set at $166,500.
In their letter to HUD Secretary Ben Carson, Brown and Warren said Blankenstein should have been fired instead of being allowed to resign from the CFPB. They also said he should not be allowed to remain in his current job. “Continuing to employ Mr. Blankenstein at a high-level of position at HUD despite the troubling findings and conclusions of the IG’s report would send a disturbing message.”