The arrangement adds a wrinkle to the tendency among some Trump administration officials to spurn traditional government norms. An NCUA spokesman confirmed a Washington Post finding that McWatters works from Dallas and declined to say how often he travels to the headquarters in Alexandria, Va., where more than 400 of the agency’s 1,200 employees are based.
Government watchdog groups said they could not recall another agency chief routinely working so far from his office.
“It’s unprecedented and incredibly troubling,” said Meredith McGehee, executive director of Issue One, a nonpartisan group composed of scores of former lawmakers and Cabinet secretaries from both parties. “How can he lead a federal agency from his house?”
McWatters declined multiple requests for interviews and did not respond to questions emailed to him. The White House did not respond to questions about the vetting of McWatters or whether Trump knew about McWatters’s practice of telecommuting.
Agency spokesman John Fairbanks downplayed the significance of McWatters’s remote work, saying it has had no impact on NCUA operations, because the agency is “predominantly a virtual workforce.” He said McWatters travels to Alexandria at his own expense for monthly board meetings and other occasions when his duties, such as testifying before Congress, require that he be there.
“Regardless of location, Mr. McWatters is engaged with staff at the NCUA every day using the full suite of video, voice and electronic tools available to our staff,” Fairbanks said.
The government has for years encouraged wider use of telework among federal workers, citing improved recruitment, retention and other factors. Almost a half-million federal workers participated in telework programs in fiscal 2016, according to data maintained by Telework.gov.
But watchdog groups and longtime observers say it is rare for senior managers, and almost unheard of for an agency leader, to routinely work from home.
Trump named McWatters acting chairman of the agency on Jan. 23, 2017 — after his more than two years as a minority-party member of the agency’s board, appointed by President Barack Obama — and then chairman in June. McWatters has since followed through on promises to ease the regulatory burden on credit unions and to cut costs and staffing at the agency, documents and interviews show.
A lawyer, an accountant and an advocate of free-market principles, McWatters has sometimes spent agency money in the style of a corporate executive.
Not long after he joined the board in 2014, McWatters bought nearly $22,000 worth of furniture for a headquarters office he rarely used, records show. Though leaders of many government agencies must notify Congress if they want to spend more than $5,000 on office furniture and upgrades, that requirement does not apply to the NCUA, which is funded through fees paid by credit unions.
“All new board members are permitted to purchase office furniture, and it is commonly done,” Fairbanks said.
McWatters has used limousine services dozens of time while traveling to meetings across the country, spending about $114 per trip on average, according to records provided by the agency. He once paid $582 for a “luxury sedan” and driver for himself and a colleague to travel from Madison, Wis., to Green Bay. Last year, he spent $12,000 to fly from Dallas to Barcelona to attend a conference.
Fairbanks said that all of McWatters’s work-related expenses conform to agency guidelines and that all board members travel frequently on agency business.
In email exchanges, Fairbanks initially said McWatters’s “main office and duty station” is the NCUA headquarters in Alexandria. Two days later, he added that McWatters “works from his location.” Days after that, in response to questions about the meaning of “his location,” Fairbanks acknowledged McWatters is a long-distance telecommuter. “Chairman McWatters does work from his residence in Dallas,” Fairbanks wrote.
Fairbanks said McWatters chose to work remotely in part because, after he and his wife divorced, their son lived in his house in Dallas. “It was important for Chairman McWatters to telework from Dallas when his duties did not require his presence in Alexandria,” Fairbanks said.
Fairbanks said McWatters has been an effective leader. McWatters has reorganized the agency, trimmed more than 5 percent of the workforce through attrition and cut more than $10 million in costs while ensuring credit unions operate safely and account holders are protected, Fairbanks said.
The NCUA became an independent federal agency in 1970 to regulate and insure the deposits of credit unions, which operate as nonprofit financial institutions on behalf of members. There are more than 5,500 federally insured credit unions, with 111 million members, most of them middle-class people.
Though the number of federally insured credit unions has been dropping for a quarter-century, they have become larger and more complex as the number of customers and the average assets have risen sharply.
The board is composed of three members who serve six-year terms, and it can have no more than two members from a single political party. The chairman is responsible for implementing regulations and policies and interacts with Congress and other federal officials.
All board members work full time for the agency and are more directly involved in management than the members of a corporate board typically are. No other chairman in memory has worked remotely, former board members said.
Concerns about McWatters’s teleworking surfaced during a board meeting in February 2016, almost a year before he became the agency’s leader.
McWatters was complaining that his colleagues had not adopted a wording change he had proposed, at 6 p.m. the night before, to a rule they were considering. He suggested they should be more flexible, particularly because “from the perspective of a practicing lawyer, 6 o’clock is practically the middle of the day,” a transcript and video of the meeting show.
Deborah Matz, then the chair, and Rick Metsger, then the vice chairman, bridled at the criticism.
“Perhaps if you came to the office more than three days a month and got your briefing more than two days in advance of our meeting, we’d be able to have discussions about issues in a timely fashion,” Matz, a Democrat, told McWatters.
When traveling as a member to board meetings, generally scheduled on the third Thursday of every month, McWatters typically arrived in Northern Virginia on Monday afternoon and left after the meeting, according to people who worked at the NCUA at the time.
In a statement to The Post, Matz declined to discuss McWatters but said she believes the agency chairman needs to be present to be effective.
“I couldn’t imagine doing the job as chairman effectively if I wasn’t in the office every day interacting with the regulatory staff, attorneys, and other regulators at other financial services agencies,” wrote Matz, who served as chair from August 2009 through April 2016. “It is a very full-time position.”
Michael E. Fryzel, a Chicago native who was appointed chairman in 2008, said he also felt it necessary to work in Alexandria. Fryzel, a Republican, said he had hoped his presence would help him manage problems and send a signal to staff members during the global financial crisis.
“It was important that staff knew the Chairman was working as hard as he wanted them to,” he wrote to The Post.
Before he was named to the board, McWatters, 63, was assistant dean of graduate programs and a professor at Southern Methodist University’s Dedman School of Law, and an adjunct professor at SMU’s business school. He had been a law partner at a prominent firm, worked as counsel to Rep. Jeb Hensarling (R-Tex.) and served on the oversight panel for the Troubled Asset Relief Program. Hensarling, also a free-market advocate, is chairman of the House Financial Services Committee, which oversees McWatters’s agency.
McWatters took an unusual approach to the regulatory job from the start. After his Senate confirmation in June 2014, he waited nearly three months to take his oath of office — and then did so at Hensarling’s office in Texas.
Chris Alcantara contributed to this report.