Timothy Mayopoulos failed to fully disclose potential conflicts arising from his romantic relationship
The Federal Housing Finance Agency Office of Inspector General (FHFA-OIG) has reprimanded Fannie Mae CEO Timothy Mayopoulos for failing to fully disclose possible conflicts of interest in relation to his romantic relationship with a credit reporting agency executive, Politico reported.
The FHFA-OIG already released a public but redacted version of the report in July. Politico independently confirmed that the report is about Mayopoulos and his romantic partner, Heather Russell, who serves as chief legal officer at TransUnion.
The reprimand is the second handed to Mayopoulos in just over a year. FHFA Inspector General Laura Wertheimer had earlier called him out for failing to promptly reveal the relationship when Russell was appointed as chief counsel for Fifth Third in 2015. The bank is a mortgage lender that did business with Fannie Mae.
Although Mayopoulos had recused himself from dealings between Fannie Mae and TransUnion, the FHFA-OIG faulted the CEO as well as Fannie for their failure to flag a potential conflict in relation to a credit-scoring project that might have benefitted TransUnion, Politico reported.
On the day the FHFA-OIG report was released, FHFA Director Mel Watt abandoned the credit-scoring project. Just three days earlier, Fannie Mae announced that Mayopoulos would leave the company by the end of 2018.
Fannie Mae and FHFA defended the CEO against the allegations.
"Tim proactively disclosed the potential conflict prior to his partner’s employment at TransUnion. He executed a standard blanket recusal agreement covering any business decisions related to TransUnion," a Fannie Mae spokeswoman said. "This blanket recusal was understood by both Tim and the board to cover TransUnion itself and anything ‘related to’ TransUnion. As a result, it included entities like VantageScore. That recusal remains in effect today. Consistent with this recusal, he has not had any involvement with business decisions related to TransUnion or VantageScore."
Meanwhile, Watt said that conflicts of interest should allow individual judgment in applying a recusal and that individuals should be held accountable for violations when they occur.
