OIG Investigations Clear NCUA Chairman McWatters

The Office of Inspector General (OIG) of the National Credit Union Administration (NCUA) closed two investigations into NCUA Chairman McWatters with no action taken between April 1 and September 30, 2018.

According to the OIG, it opened a conflict of interest investigation into Chairman McWatters. The complaint alleged that McWatters participated in a vote to rescind the Financial Stability Oversight Committee's Systemically Important Financial Institution designation of American International Group (AIG), while he owned stock and warrants in AIG at the time of the vote. McWatters stated that he believed that his holdings fell under the Office of Government Ethics (OGE) de minimis exemption and he was not required to recuse himself. OGE informed McWatters and the OIG that the exemption only applied to stock holdings, not warrants. McWatters provided information from security lawyers and accountants that warrants are the same as stocks and are publicly traded. The investigation was closed with no action taken against the Chairman.

A second complaint accused McWatters of misuse of NCUA funds for extravagant travel. This included premium air travel and expensive meals. The investigation found that McWatters was reimbursed for alcohol expenses of almost $150 associated with 3 meals. While there was no violation of law, NCUA policy did not permit for the reimbursement of alcohol expenses. NCUA changed its policy after the investigation closed to allow for the reimbursement of alcohol expenses. The OIG also found that the reimbursement of the Chairman for other expenses including premium air travel, UberBlack, and hotels did not violate the agency's policy.

These findings were reported in the agency's Semiannual Report to the Congress.

Read the OIG report.