Former director of the Consumer Financial Protection Bureau Richard Cordray praised his agency's general counsel as having a "wealth of experience" and "tested judgment" when he hired her.
Mary McLeod, who was hired by Cordray as general counsel of the CFPB in December 2015, sent a memo agreeing the White House has full legal authority to appoint Mick Mulvaney as acting director, bypassing Cordray's plan to pick his own replacement.
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Cordray resigned his post Friday and tried to appoint his chief of staff, Leandra English, as acting director. President Donald Trump appointed Mulvaney, who is also serving as director of the Office of Management and Budget, as acting director. English attempted to assume authority on Monday, but was blocked by Mulvaney, who brought donuts to the staff. English is now suing the government.
"The administration is aware of the suit filed this evening by Deputy Director English," Sarah Sanders, White House press secretary, said in a statement. "However, the law is clear: Director Mulvaney is the acting director of the CFPB.
"Now that the CFPB's own General Counsel—who was hired under Richard Cordray—has notified the Bureau's leadership that she agrees with the administration's and DOJ's reading of the law, there should be no question that Director Mulvaney is the acting director."
McLeod sent a memo affirming the president's authority to appoint Mulvaney under the Federal Vacancies and Reform Act.
"I advise all Bureau personnel to act consistently with the understanding that Director Mulvaney is the acting director of the CFPB," McLeod said.
McLeod added that the "statutory language, legislative history, precedent from the Office of Legal Counsel at the Department of Justice, and case law all point to the conclusion that the president may use the Vacancies Reform Act to designate an acting official, even when there is a succession statute under which another official may serve as acting."
Sanders said it is "unfortunate that Mr. Cordray decided to put his political ambition above the interests of consumers with this stunt" by seeking to name his own successor, English.
Cordray hired McLeod in 2015. At the time, he praised the incoming general counsel as possessing "tested judgment."
"I am very pleased to welcome Mary to the Consumer Bureau, as she brings a wealth of experience and tested judgment to our leadership team," Cordray said.
English has shuffled back and forth from the Office of Management and Budget and the CFPB, the most partisan agency in the federal government and the brainchild of Democratic senator Elizabeth Warren (Mass.), who proposed the idea in Democracy Journal, a "small lefty quarterly," while she was a professor at Harvard.
Cordray became the head of the agency by a likely unconstitutional recess appointment made by former president Barack Obama early in January 2012. The Supreme Court ruled recess appointments made to the National Labor Relations Board on the same date were unconstitutional.
The Senate did not officially confirm Cordray until July 2013, opening up his actions at the agency prior to Senate confirmation to constitutional scrutiny.
The CFBP itself has been subject to constitutional questions. Last year, a federal court ruled that the CFPB's structure was unconstitutional because it gives "unilateral power" to the director of the agency, who at the time was Cordray.
"Indeed, other than the president, the director of the CFPB is the single most powerful official in the entire United States Government, at least when measured in terms of unilateral power," the Washington, D.C., circuit court said.
Sen. Tom Cotton (R., Ark.) said English's lawsuit is consistent with the short history of the CFPB, which he called a "rogue, unconstitutional agency."
"Leandra English's lawsuit to install herself as acting director against the president's explicit direction is just the latest lawless action by the CFPB," he said. "She doesn't have a legal leg to stand on, as her own general counsel has conceded and the Department of Justice has concluded. The president should fire her immediately, and anyone who disobeys Director Mulvaney's orders should also be fired summarily."
"The Constitution and the law must prevail against the supposed resistance," Cotton said.
Little is known about English, who was serving as Cordray's chief of staff. English, 34, reportedly was a pupil of Warren, and moved over from the Office of Management and Budget as an aide to help develop the agency after the passage of Dodd-Frank in 2010.
English later went back and forth between the agencies, returning in 2015 as the deputy chief operating officer of the CFPB, leaving to become the principal deputy chief of staff at OMB, and returning again just before Trump's inauguration this year as chief of staff of the CFPB.
Warren's "manifesto" that proposed the vast Wall Street regulator was used to recruit staff to create the CFPB in 2010, according to the Washington Post.
Wally Adeyemo, a former Obama Treasury Department official, showed Warren's article to English, which prompted her to leave her job as a special assistant at the Office of Management and Budget.
"It shocked me that something like the bureau didn't already exist," English said. "The need for it was so obvious. I knew I wanted to help build it—it didn't matter that I had little idea what I'd be doing."
Mulvaney has a contrasting view of the agency, which he has said is a "sick, sad" joke, because of its vast regulatory power outside congressional oversight.
"The place is a wonderful example of how a bureaucracy will function if it has no accountability to anybody," Mulvaney said.