Officials at the Government Accountability Office are launching an investigation into charges of workplace discrimination and retaliation at the Consumer Financial Protection Bureau.
The congressional watchdog agency's probe is the second official investigation examining employee charges of widespread racial, ethnic and gender discrimination within CFPB.
The Federal Reserve Board’s inspector general is currently conducting an audit of the bureau’s discrimination in hiring and promotion. That report is due later this year.
CFPB has been rocked for nearly a year by charges of discrimination and retaliation against women and minorities. The allegations have been stoutly disputed by bureau managers, including Director Richard Cordray.
At a hearing held on Wednesday, House Financial Services oversight and investigations subcommittee chairman Rep. Patrick McHenry, R-N.C., said 32 CFPB employees have told his subcommittee of experiencing discriminatory treatment.
One of the managers accused of ignoring employee grievances has been transferred. CFPB Chief Human Capital Officer Dennis Slagter was transferred to a new job as deputy supervisor for examinations, a post for which he has no experience, as previously reported by the Washington Examiner.
McHenry's subcommittee has held four hearings in which CFPB employees have testified about incidents of racial and ethnic slurs, as well as gender discrimination by top managers.
An outside investigator from the Massachusetts-based Defense Investigators Group, which CFPB hired in 2013, reported earlier this year that CFPB managers had created a “toxic workplace.”
CFPB officials did not make the DIG report public until it was disclosed by the House Financial Services Committee.
Dissatisfied with the earlier DIG investigation, last month CFPB retained a law firm with longstanding Democratic Party ties to re-investigate the case. The firm specializes in aiding federal agencies combat whistleblower charges.
Cathy Harris, an attorney and co-manager of the Washington law firm Kator, Parks, Weiser & Harris, which specializes in employment law, said the CFPB action appeared to be a “whitewash” designed to exonerate managers.
On July 18, House committee chairman Rep. Jeb Hensarling, R-Texas, along with McHenry and Rep. Shelley Moore Capito, R-W.Va., asked GAO to “study organizational culture and personnel management issues” at the bureau.
“Ever since the subcommittee began its investigation,” the lawmakers said, “dozens of CFPB employees have come forward to share their concerns with committee staff.”
The hearings “strongly suggest a dysfunctional work environment for many CFPB employees and a malignant management culture that seeks to protect its own at the expense of rank-and-file employees,” the lawmakers said.
GAO's financial markets and community investment division will conduct the congressional watchdog agency's investigation.