Whistleblower Claims Cordray Called to say "Back Down." FSC Not Amused

The Consumer Financial Protection Bureaurn(CFPB) was assailed by Republican members of the House Financial ServicesrnCommittee (FSC) and by two witnesses for what was termed “a culture of racial andrngender discrimination and retaliation against its employees” at a hearing onrnWednesday.  The hearing, held by thernCommittee’s Oversight and Investigations Subcommittee, heard testimony from a currentrnCFPB Senior Enforcement Attorney employee and so-called “Whistleblower” AngelarnMartin and from Misty Raucci a former investigator,rnDefense Investigators Group.</p

The hearing follows an investigation ofrnpersonnel practices stretching back almost two years and a March 6 article inrnAmerican Banker called “CFPBrnStaff Evaluations Show Sharp Racial Disparities.” The article said that overall,rn”whites were twice as likely in 2013 to receive the agency’s top gradernthan were African-American or Hispanic employees.”  </p

According to the memorandum issued byrnthe FSC prior to the hearing, the American Banker article “exposedrnserious personnelrnproblems at the ConsumerrnFinancial Protection Bureau including evidence that “the CFPB’s own managersrnhave shown distinctly different patterns in how they rate employees of differentrnraces.”   </p

Martin presented lengthy testimony atrnthe hearing about the discrimination she claims to have faced and thernretaliation she says she continues to face at the CFPB for filing complaints.  Arnpodcast of her testimony and that of Raucci’s canrnbe heard in full here.rn The following is taken from their statementsrnprepared in advance for the committee.</p

Martin, who is also a board member forrnthe National Treasury Employees Union (NTEU) Chapterrn335, which organizes CFPB employees, stressedrnshe was not appearing as an NTEU representative nor had she discussed herrntestimony with her union.  Martin, an attorney, is a former civilian member of thernJudge Advocate General (JAG) Corps at Fort Brag and later a military consumerrnattorney, had proposed to former Treasury Secretary Tim Geithner that CFPB haverna separate office focusing solely on protecting military consumers.  That department was created as the Office ofrnServicemember Affairs.    </p

Martin said she joined the Bureau in June 2011 after dissolvingrnher law practice to do so but that the she had been a victim of poor management and abuse of authority have precludedrnher from doing her part to carry out the Bureau’s mission.rn “Indeed, today marks the 400th dayrnthat I have been isolatedrnand prevented from performing any meaningful work. Irnnever received a fair shake at the Bureau, and I have not been assigned one case or enforcement matter during my entire tenure.” rnMartin said she first filed a discrimination and retaliation complaintrnin December 2012 and immediately suffered further retaliation for doing so. ‘When my supervisor, the Assistant Director of ConsumerrnResponse, learned that I was asserting my rights via the Equal Employment Opportunity (EEO) process, he threatened to bring counterclaims if I were tornfurther pursue my EEO claim.  Immediately, he took steps to isolaternme, diminish my jobrnduties and set me up to fail by holdingrnme accountable for work whilernat the same time preventingrnme from being involved in the preparation of that work.'</p

Martin said the Bureau commissioned an outside agency tornconduct an independent investigation of her claims last summer and that shernbelieved they received a draft report in October 2013 and a final report inrnDecember but that she had been denied access to the information despite bothrnFreedom of Information Act and Privacy Act requests.  </p

She said that two weeks ago she learned of another employeernwho was retaliated against within two days of filing a formal complaint and hadrnheard stories from “many employees” who had come to here with stories of theirrnown maltreatment and retaliation.  </p

Raucci in her testimony said that the Martin investigation also involved the role of at least twornsupervisors at CFPB. Scott Pluta and Dane D’Alessandro.  The investigation, she said, was supposed to “bernonly two to five statements,” but took six months to complete as she became arnveritable hotline for employees at CFPB who called to discuss their own allegedrnmaltreatment, primarily at the hands of Pluta or D’Alessandro. </p

“The sum of my findings was that Scott Pluta retaliated against AngelarnMartin after she filed a formal complaint of discrimination and retaliation. In concert with at least three facilitators, Mr.rnPluta effectively removed Ms. Martin from her positionrnas Chief Counsel of ConsumerrnResponse, and saw her relegated to a lesserrnposition in another office.rnMr. Pluta attemptedrnto justify Ms. Martin’srnremoval by expressing doubt as to her ability to performrnher duties as Chief Counsel;rnhowever, his criticisms largelyrnoccurred after she filed her complaint.rnThis was a major indicatorrnthat Mr. Pluta’s rationale for demoting Ms. Martin for what he perceived as shortcomingsrnwas masking his other motives.”</p

She said Pluta’s determination that Martin deserved a demotionrnwas unilateral and did not utilize due process. rnWhen complaints were lodged against Martin by two of her subordinatesrnwithin two weeks after Martin filed her complaints, Pluta appeared to take thoserncomplaints far more seriously than Martin’s and stated conclusively in his negative review of Ms. Martin that she had retaliated against the subordinates although their claimsrnhadrnyet to be investigated, much less substantiated.</p

Raucci said Martin was subjectedrnto relentless hostility at the hands ofrnPluta and D’Alessandro and the former did little, if anything,rnto curtail the latter’s “continuedrnopen bashing, bullying, and marginalization of Ms. Martin.rnMr. D’Alessandro too, had something to gain by Ms. Martin’s departurernfrom Consumer Response; namely, controlrnof Consumer Response, unfettered by adherence to policiesrnand procedures set forthrnbyrnthe Bureau itself.”</p

According to Raucci, the’ Bureau’s Human Capital Office is in receiptrnof extensive documentation that Defense Investigators Group gathered and attached as exhibits to its report. “The evidence of the documentation suggests a pervasiverndisregard for employeernrights that is entrenched in the Office of ConsumerrnResponse. Those responsible for curtailing Mr. Pluta’s activities were apparently compelled to ignore,rncover, or downplay them insteadrnof taking corrective action. The corrosive environment of the CFPB workplacernwas engendered by the bureau’srnperpetual failurernto uphold its own EEO policies.”</p

Beyond the testimony there were the politics.  Jeb Hensarling, (R-TX) Chairman of the HousernFinancial Services Committee said that M. StaceyrnBach, CFPB’s Assistant Director of the office of Equal Opportunity Employmentrnand Liza Strong, CFPB Director of Employee Relations and had been invited tornsubmit testimony to the committee and had “refused.”   Robert Cauldwell, President, National Treasury Employees Union, Chapter 335 was also on the agenda but did notrnpresent testimony.  The committee alsornreleased two press statements that were largely duplicative and perhaps bestrntermed “unique” in their tone. In each Hensarling said that during the hearingrnhe had asked Martin if CFPB Director Richard Cordray had ever attempted torncontact her about her complaint.  According to the press release Martin saidrnthat Cordray had called her at night and “told me that I have to tell myrnattorneys to back down.”<br /<br /"I'm sorry, Ms. Martin, you are saying that Director Cordray personally reachedrnout to you and asked or told you to have your attorneys back down?" Hensarlingrnresponded.<br /<br /"Yes, sir," Martin answered. "August 7 at 8:54 in a two minute conversation herntold me to tell my attorneys to back down" because Cordray said he was tryingrnto secure her a position in a different division of the CFPB.<br /<br /"But what I did not know was on August 7, after I thought it was settled,rnDirector Cordray and somebody else gave that position to somebody else," Martinrnsaid.<br /<br /Hensarling also said that "Democrats on the committee originally attempted tornhave the hearing cancelled to prevent the whistleblower and investigator fromrntestifying about the workplace conditions at the CFPB."   Ranking committee member Maxine Waters (D-CA)rnhad asked last week asked that today's hearing be canceled so that a morern"careful and intentional" investigation could be conducted but Watersrnattended the hearing and ceded some of her allotted time to Martin.  At the end of the hearing she said she wasrnglad it had been held. </p

Cordray did release a statement yesterday which said in part; “I takernseriously the concerns raised at today’s hearing and deeply apologize to anyrnmember of the CFPB staff who feels that they have not been heard or treatedrnfairly. I welcome the opportunity to appear before Congress to discuss thesernissues fully.”

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