Fannie, Freddie Regulator Mel Watt Investigated For Sexual Harassment

In Friday's edition of #MeToo in addition to Les Moonves we have a second entrant: Mel Watt, FHFA director and regulator of insolvent mortgage giants Fannie Mae and Freddie Mac, is under investigation for alleged sexual harassment of an employee.

According to Politico, a Federal Housing Finance Agency staffer accused the FHFA director of "repeatedly making inappropriate sexual advances when she tried to discuss career and salary concerns."

The conversations included a 2016 meeting during which Watt steered the discussion to his feelings for the woman, according to documents and partial transcripts of tapes obtained by POLITICO. In a separate encounter, Watt asked about a tattoo on her ankle, saying, “If I kissed that one would it lead to more?"

Two years later, and seemingly empowered by recent events, the employee who is currently a special adviser at FHFA, and has been at the agency since December 2014, filed an Equal Employment Opportunity complaint.

The unnamed employee’s lawyer, Diane Seltzer Torre, confirmed the investigation after Politico received copies of the documents related to the case. “There is an investigation in progress,” Torre said. “Our preference is to let that investigation proceed.”

In response, FHFA director Watt, 72, released a statement calling the leak of documents political.

"The selective leaks related to this matter are obviously intended to embarrass or to lead to an unfounded or political conclusion,” Watt said in an e-mail. “However, I am confident that the investigation currently in progress will confirm that I have not done anything contrary to law. I will have no further comment while the investigation is in progress."

The FHFA oversees the $5.4 trillion mortgage portfolio of Fannie and Freddie, the mortgage guarantors that stand behind most of the U.S. housing market. Fannie and Freddie buy mortgages, wrap them into securities stamped with a government-backed guarantee and sell them to investors.

In 2014, Watt, a former Democratic congressman from North Carolina, was appointed by President Barack Obama to lead the independent agency which supervises the two most important entities in US housing, and is in the final months of his five-year term.

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Politico reveals that according to a transcript dated April 2016, a person identified as Watt arranged for the two to meet outside the office “because of perceptions.” The conversation took place on the drive from the FHFA to the Rosa Mexicana restaurant.

“Well, you probably want to know what I wanted to talk to you about,” Watt said. “I mentioned to you there is an attraction here that I think needs to be explored. In my experience there are four types of attraction: emotional, spiritual, sexual or of friendship. So, the exercise here is to find out which one exists here.”

The woman then tried to shut down the conversation.

"If I gave you that impression in any way, that was not intentional,” she said. “My impression was that you wanted to discuss the work-related items I’ve been talking to [a superior] about. But, if that’s not the case, then I think I should take you back to FHFA. Because I don’t want any confusion here.”

Relentless, Watt wasn't about to give up, and in a transcript dated June 17, 2016, Watt asked the same employee about a tattoo on her ankle and suggested kissing it.

“Is that what we’re here to talk about?” the employee asked. “Because I already told you I don’t want to have conversations like that with you.”

“No, no,” he said, and then immediately redirected the conversation to “resolv[ing] the pay situation you’ve been bringing up.”

The employee claims that a promotion was withheld from her because she reported the harassment, according to documents.

In a third conversation dated Nov. 11, 2016, Watt asked the woman why she had "rejected my advances.”

When she told him she was in a relationship, Watt said, “I love my wife too. Having an attraction for someone else doesn’t have to mean you don’t love them.”

Watt, an attorney, is married and has two grown children and three grandchildren, according to his FHFA bio.