Transparency Watchdog Requesting Investigation Into Rogue CFPB Lawsuit

Argues secret funding for lawsuit could qualify as a prohibited gift

CFPB deputy director Leandra English / Getty Images
April 24, 2018

A transparency and accountability watchdog is asking the inspector general's office of the Consumer Financial Protection Bureau to launch an investigation into reports that the deputy director may be using government time to further her personal lawsuit against President Donald Trump and questions if the anonymous funding of that lawsuit violates ethics laws against receiving gifts in office.

CFPB deputy director Leandra English is suing the administration in hopes that a judge will order her to be installed as the bureau's acting director in place of the current acting director Mick Mulvaney, who was appointed by the president. Mulvaney also currently serves as the director of the Office of Management and Budget.

The Foundation for Accountability and Civic Trust sent a letter Monday to the CFPB's IG and to the Office of Government Ethics saying that "recent evidence suggests that [English] may be using government paid time for personal matters" and that "she may have accepted gifts based upon her government position to fund her lawsuit."

When the previous CFPB director, Richard Cordray, resigned the office in November, he appointed English to the acting director post in an attempt to handpick his successor, thereby keeping Obama-era leadership installed in the bureau. But President Trump simultaneously installed Mick Mulvaney, which then set off a power struggle and resulting court battle.

Within a span of about 10 weeks from November to January, two separate rulings went against the attempts to have Mulvaney removed from the post. English is appealing one of those cases, but is doing so on her own behalf, and her attorney has even admitted that a third-party is funding the legal bills, but the identity of the funder has never been revealed.

English is working the appeal on her own because the CFPB's own counsel refused to take up the matter, essentially believing that the case put forward by the White House was correct—that the president had more authority than the outgoing director to fill the position.

FACT is arguing that the funding of the lawsuit by someone else might be a gift prohibited by ethics rules, saying in the letter that English "brought a personal lawsuit based upon her official position with the CFPB, and any gift give to fund her lawsuit would be a 'gift given because of the employee's official position.'"

A ruling on English's appeal is expected any day, but FACT executive director Kendra Arnold says the ethical questions they've raised are separate issues from what's at stake in the court case and therefore should be investigated and answered thoroughly.

"There is one more issue that comes up, and that is sources prohibited from gift giving," Arnold told the Washington Free Beacon. "Because the public doesn't know who is giving the gift, it could have come from a prohibited source. For example, certain individuals with business before an agency, lobbyists, different individuals are prohibited from giving any gifts at all. And so we don't know if the funder of the suit is included in that list. But obviously, that's one of the most clear-cut rules, and so we would expect that's something the Office of Government Ethics would have to look at."

Requests for comment from the CFBP, the Office of Government Ethics, and to English's attorney Deepak Gupta were not returned.

The watchdog group is also pointing to a Daily Caller report claiming that English "disappeared for five full weeks earlier this year when she inexplicably moved 3,000 miles away from Washington, D.C., to work in the agency's tiny San Francisco office."

The same report cites four anonymous employees of the bureau who claimed that English "rarely" shows up for work in her D.C. offices. English makes $217,845 annually, according to the Daily Caller.

"The ethics laws clearly require a government employee to actually perform work commensurate with the salary paid," FACT said in the letter. "For months, it has been unclear whether English has been performing work sufficient for the salary she receives."

Finally, FACT is asking for answers as to whether English has been working on her lawsuit on government time and if that may be in violation of any ethics rules or laws.

Because of the Federal Vacancies Reform Act, Mulvaney can only serve as the acting director for 210 days, so his tenure in the role will expire on June 22. Any person nominated by the White House to the CFPB's director position will have to be confirmed by the Senate.