The Consumer Financial Protection Bureau (CFPB) was assailed by Republican members of the House Financial Services Committee (FSC) and by two witnesses for what was termed "a culture of racial and gender discrimination and retaliation against its employees" at a hearing on Wednesday.  The hearing, held by the Committee's Oversight and Investigations Subcommittee, heard testimony from a current CFPB Senior Enforcement Attorney employee and so-called "Whistleblower" Angela Martin and from Misty Raucci a former investigator, Defense Investigators Group.

The hearing follows an investigation of personnel practices stretching back almost two years and a March 6 article in American Banker called "CFPB Staff Evaluations Show Sharp Racial Disparities." The article said that overall, "whites were twice as likely in 2013 to receive the agency's top grade than were African-American or Hispanic employees."  

According to the memorandum issued by the FSC prior to the hearing, the American Banker article "exposed serious personnel problems at the Consumer Financial Protection Bureau including evidence that "the CFPB's own managers have shown distinctly different patterns in how they rate employees of different races."   

Martin presented lengthy testimony at the hearing about the discrimination she claims to have faced and the retaliation she says she continues to face at the CFPB for filing complaints.  A podcast of her testimony and that of Raucci's can be heard in full here.  The following is taken from their statements prepared in advance for the committee.

Martin, who is also a board member for the National Treasury Employees Union (NTEU) Chapter 335, which organizes CFPB employees, stressed she was not appearing as an NTEU representative nor had she discussed her testimony with her union.  Martin, an attorney, is a former civilian member of the Judge Advocate General (JAG) Corps at Fort Brag and later a military consumer attorney, had proposed to former Treasury Secretary Tim Geithner that CFPB have a separate office focusing solely on protecting military consumers.  That department was created as the Office of Servicemember Affairs.    

Martin said she joined the Bureau in June 2011 after dissolving her law practice to do so but that the she had been a victim of poor management and abuse of authority have precluded her from doing her part to carry out the Bureau's mission.  "Indeed, today marks the 400th day that I have been isolated and prevented from performing any meaningful work. I never received a fair shake at the Bureau, and I have not been assigned one case or enforcement matter during my entire tenure."  Martin said she first filed a discrimination and retaliation complaint in December 2012 and immediately suffered further retaliation for doing so. 'When my supervisor, the Assistant Director of Consumer Response, learned that I was asserting my rights via the Equal Employment Opportunity (EEO) process, he threatened to bring counterclaims if I were to further pursue my EEO claim.  Immediately, he took steps to isolate me, diminish my job duties and set me up to fail by holding me accountable for work while at the same time preventing me from being involved in the preparation of that work.'

Martin said the Bureau commissioned an outside agency to conduct an independent investigation of her claims last summer and that she believed they received a draft report in October 2013 and a final report in December but that she had been denied access to the information despite both Freedom of Information Act and Privacy Act requests. 

She said that two weeks ago she learned of another employee who was retaliated against within two days of filing a formal complaint and had heard stories from "many employees" who had come to here with stories of their own maltreatment and retaliation. 

Raucci in her testimony said that the Martin investigation also involved the role of at least two supervisors at CFPB. Scott Pluta and Dane D'Alessandro.  The investigation, she said, was supposed to "be only two to five statements," but took six months to complete as she became a veritable hotline for employees at CFPB who called to discuss their own alleged maltreatment, primarily at the hands of Pluta or D'Alessandro.

"The sum of my findings was that Scott Pluta retaliated against Angela Martin after she filed a formal complaint of discrimination and retaliation. In concert with at least three facilitators, Mr. Pluta effectively removed Ms. Martin from her position as Chief Counsel of Consumer Response, and saw her relegated to a lesser position in another office. Mr. Pluta attempted to justify Ms. Martin's removal by expressing doubt as to her ability to perform her duties as Chief Counsel; however, his criticisms largely occurred after she filed her complaint. This was a major indicator that Mr. Pluta's rationale for demoting Ms. Martin for what he perceived as shortcomings was masking his other motives."

She said Pluta's determination that Martin deserved a demotion was unilateral and did not utilize due process.  When complaints were lodged against Martin by two of her subordinates within two weeks after Martin filed her complaints, Pluta appeared to take those complaints 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 claims had yet to be investigated, much less substantiated.

Raucci said Martin was subjected to relentless hostility at the hands of Pluta and D'Alessandro and the former did little, if anything, to curtail the latter's "continued open bashing, bullying, and marginalization of Ms. Martin. Mr. D'Alessandro too, had something to gain by Ms. Martin's departure from Consumer Response; namely, control of Consumer Response, unfettered by adherence to policies and procedures set forth by the Bureau itself."

According to Raucci, the' Bureau's Human Capital Office is in receipt of extensive documentation that Defense Investigators Group gathered and attached as exhibits to its report. "The evidence of the documentation suggests a pervasive disregard for employee rights that is entrenched in the Office of Consumer Response. Those responsible for curtailing Mr. Pluta's activities were apparently compelled to ignore, cover, or downplay them instead of taking corrective action. The corrosive environment of the CFPB workplace was engendered by the bureau's perpetual failure to uphold its own EEO policies."

Beyond the testimony there were the politics.  Jeb Hensarling, (R-TX) Chairman of the House Financial Services Committee said that M. Stacey Bach, CFPB's Assistant Director of the office of Equal Opportunity Employment and Liza Strong, CFPB Director of Employee Relations and had been invited to submit testimony to the committee and had "refused."   Robert Cauldwell, President, National Treasury Employees Union, Chapter 335 was also on the agenda but did not present testimony.  The committee also released two press statements that were largely duplicative and perhaps best termed "unique" in their tone. In each Hensarling said that during the hearing he had asked Martin if CFPB Director Richard Cordray had ever attempted to contact her about her complaint.  According to the press release Martin said that Cordray had called her at night and "told me that I have to tell my attorneys to back down."

"I'm sorry, Ms. Martin, you are saying that Director Cordray personally reached out to you and asked or told you to have your attorneys back down?" Hensarling responded.

"Yes, sir," Martin answered. "August 7 at 8:54 in a two minute conversation he told me to tell my attorneys to back down" because Cordray said he was trying to secure her a position in a different division of the CFPB.

"But what I did not know was on August 7, after I thought it was settled, Director Cordray and somebody else gave that position to somebody else," Martin said.

Hensarling also said that "Democrats on the committee originally attempted to have the hearing cancelled to prevent the whistleblower and investigator from testifying about the workplace conditions at the CFPB."   Ranking committee member Maxine Waters (D-CA) had asked last week asked that today's hearing be canceled so that a more "careful and intentional" investigation could be conducted but Waters attended the hearing and ceded some of her allotted time to Martin.  At the end of the hearing she said she was glad it had been held.

Cordray did release a statement yesterday which said in part; "I take seriously the concerns raised at today's hearing and deeply apologize to any member of the CFPB staff who feels that they have not been heard or treated fairly. I welcome the opportunity to appear before Congress to discuss these issues fully."