Biden names new watchdog at finance agency after embattled IG departs

The Biden administration has named a new watchdog chief for the Federal Housing Finance Agency (FHFA) following the departure of the agency’s embattled inspector general.

Phyllis Fong, the top watchdog at the United States Department of Agriculture (USDA) since 2002, was tapped last week to take over as acting chief of the office formerly led by Laura Wertheimer. Fong will continue to hold her post at USDA.

Wertheimer last month announced she would resign at the end of July, following two investigations that determined she had abused her authority and mistreated staff.

As acting head of the Office of Inspector General (OIG), Fong will be tasked with overseeing the federal government’s regulation of Fannie Mae, Freddie Mac and the Federal Home Loan Bank System. 

“FHFA OIG has an important mission — to provide oversight and recommendations to enable FHFA to deliver its programs as effectively as possible. I look forward to working with FHFA OIG’s staff to accomplish this mission,” Fong said in a statement Friday.

Before her time as the USDA’s top watchdog, Fong served in the same role at the Small Business Administration. In 2008, Fong was elected as the first chairperson of Council of the Inspectors General on Integrity and Efficiency, where she subsequently served three terms. The council conducted one of the two investigations into Wertheimer’s tenure at FHFA.

Acting FHFA Director Sandra L. Thompson voiced her support of Fong in a statement last week.

“FHFA takes great pride in being a world-class prudential regulator,” she said in a statement Friday. “Inspector Fong’s leadership in FHFA OIG will provide the oversight required to ensure that FHFA executes our mission in an efficient and effective manner without waste, fraud, or abuse.”

Agriculture Secretary Tom Vilsack also praised Fong’s track record.

“For nearly two decades, Phyllis has fostered an environment of transparency, accountability, and safety at USDA while serving as Inspector General,” he said in a statement. “Her numerous awards and leadership in this area highlight her commitment to ensuring that federal programs are effective and to preventing fraud, waste, and abuse.”

Raphael Williams, an FHFA spokesperson, said Fong’s appointment was at President Biden’s request.

Last month, three advocacy groups sent a letter to Biden urging him to designate a temporary replacement for Wertheimer and prevent her from naming her own successor, particularly since some of her senior colleagues were also accused of abusive behavior in the investigations.

Sens. Chuck Grassley (R-Iowa) and Maggie Hassan (D-N.H.) also wrote to Biden, pressing him to swiftly appoint an acting inspector general not found to have abused their power and nominate a “qualified individual with the leadership expertise to stabilize the FHFA OIG.”