September 27, 2018 / 9:30 PM / 2 months ago

UPDATE 1-Fannie, Freddie regulator harassed a subordinate, Congress told

(Adds remarks from Director Mel Watt)

By Patrick Rucker and Pete Schroeder

WASHINGTON, Sept 27 (Reuters) - Mel Watt, a top regulator for the U.S. housing market, sexually harassed a subordinate when she tried to speak with him about her career, his accuser told lawmakers on Thursday in a House hearing on oversight of the Federal Housing Finance Agency (FHFA).

Watt, the regulator for mortgage finance giants Fannie Mae and Freddie Mac as director of the FHFA, said the subordinate misunderstood his overtures as a mentor.

Simone Grimes, 44, a senior official with the FHFA, told lawmakers that Watt, 73, made romantic advances when she tried to talk with him about a possible promotion in 2015.

“I felt vulnerable and unsafe,” Grimes told the hearing. “Director Watt more than once implied that his advances were linked to my ability to receive promotions and pay increases.”

Grimes said her career at the FHFA stalled after she rebuffed Watt and that she has filed a complaint with the Equal Employment Opportunity Commission (EEOC) which investigates cases of possible discrimination at work.

The FHFA prohibits sexual harassment but Watt said on Thursday that he does not have to abide by such rules since he is appointed by the president and not a regular employee.

Watt also said that Grimes misunderstood his effort to be a mentor.

“When these issues are resolved through the legal process, I am confident the resolution will confirm, as I have previously stated, that I have not taken any actions or engaged in any conduct with Ms. Grimes that is contrary to law,” Watt said at the hearing of the House Financial Services Committee.

The FHFA’s internal watchdog, the Inspector General, is examining the allegations and Grimes has filed a civil suit.

Grimes’ allegations were first reported by Politico in July.

Watt, a former Democratic congressman from North Carolina, was appointed by President Barack Obama in 2014 to head the independent housing regulator. His term is due to end in January, paving the way for Republicans to overhaul Fannie and Freddie which back trillions of dollars worth of U.S. mortgages.

The hearing comes amidst the #MeToo social media movement against sexual harassment that has led to the resignation of several prominent politicians, businessmen and entertainers in the past year.

Watt once sat on the House Financial Services Committee that questioned him on Thursday and he emphasized to his former colleagues that he had never touched Grimes.

Rep. Maxine Waters, the top Democrat on the committee, said men must hold themselves to a higher standard than before.

“There’s one lesson in all of this maybe for you and that is: It’s a new day. It’s a new time. And the old processes don’t work quite well anymore.” (Reporting By Patrick Rucker and Pete Schroeder; editing by Michelle Price and Bill Rigby)

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