CFPB Director Told Whistleblower to ‘Back Down’

‘Pervasive culture of retaliation and intimidation’ at the Dodd-Frank office

Richard Cordray
Consumer Financial Protection Bureau (CFPB) Director Richard Cordray / AP
April 3, 2014

Consumer Financial Protection Bureau (CFPB) Director Richard Cordray told a whistleblower at his agency to have her attorneys "back down" after she filed a complaint alleging a "pervasive" culture of intimidation and hostility within the bureau.

Angela Martin, a senior enforcement attorney at the CFPB, testified before the House Committee on Financial Services on Wednesday, claiming senior managers within her office bullied and demoted her for speaking out against mismanagement.

Scott Pluta, the CFPB assistant director of the Office of Consumer Response, demoted Martin after she filed a formal complaint of discrimination for being "isolated" and prevented from doing any "meaningful work" in December 2012. Martin has not been assigned a single case or enforcement matter since she dissolved her own law practice to work for the CFPB in 2011.

After filing her complaint, Martin, a former civilian attorney for the judge advocate general at Fort Bragg, was then removed from all of her job duties.

"There is a pervasive culture of retaliation and intimidation that silences employees and chills the workforce from exposing wrongdoing," she said.

As her complaint moved forward, Cordray personally reached out to Martin, asking to have her lawyers "back down."

Committee Chairman Jeb Hensarling (R., Texas) during the hearing asked Martin if Cordray contacted her specifically about her Equal Employment Opportunity (EEO) complaint.

"Yes, sir," she said. "On Aug. 7, Director Cordray called me at night and told me that I should get my—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?" Chairman Hensarling said.

"Yes, sir. Aug. 7 at 8:54 in a two minute conversation he told me to tell my attorneys to back down because he was trying to secure me a position in [a different division of the CFPB]."

"But what I did not know was on Aug. 8, after I thought it was settled, Director Cordray and somebody else gave that position to somebody else," Martin said.

Misty Raucci, a workplace private investigator who was hired by the CFPB to investigate the case, supported Martin’s testimony.

After six months, Raucci said she became a "veritable hotline for employees at CFPB, who called to discuss their own maltreatment at the bureau, mainly at the hands of Scott Pluta or [CFPB official] Dane D’Alessandro."

Raucci said Martin was subjected to "open bashing, bullying, and marginalization" from D’Alessandro. Pluta removed Martin from her position as chief counsel in the Office of Consumer Response.

Raucci suggested that Pluta colluded with two lower-level employees—Cathaleen Skinner and Cora Hume—to have them file complaints against Martin. Skinner "stood to benefit directly from Ms. Martin’s removal from her position as Chief Counsel," Raucci said.

"I found that the general environment in Consumer Response is one of exclusion, retaliation, discrimination, nepotism, demoralization, devaluation, and other offensive working conditions which constitute a toxic workplace for many of its employees," she said.

Raucci said 12 employees contacted her about being mistreated at the agency. Martin’s complaint is still pending.

Hensarling vowed to continue to investigate what he believes is the "tip of the iceberg" of a hostile work environment at the CFPB.

"An America of government-sanctioned discrimination is one that I am mostly familiar with in the history books, from television documentaries, and, frankly, from some whom actually lived through it," he said. "And to think again that in 2014 we’re hearing evidence of government-sanctioned discrimination is beyond the pale."

"And as chairman of this committee, if this was merely restricted to Ms. Martin’s story—as compelling as it is—I would not have allowed this hearing to go forward," Hensarling said. "But instead, regrettably, shamefully, this appears to be the tip of the iceberg."

Officials from the CFPB were invited to testify before the committee, though the agency refused to send any witnesses. Ranking Member of the Financial Services Committee Maxine Waters (D., Calif.) and Rep. Al Green (D., Texas) called for the hearing to be canceled last week, saying it would "focus exclusively on an individual employee’s claim."

The two are now urging a hearing with senior management at CFPB to address their "serious concerns" over the revelations at Wednesday’s hearing.

Published under: Obama Administration