EXCLUSIVE: Feds Paid Employee $1M For Pain And Suffering Of Being Called A Little Rascal

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Luke Rosiak Investigative Reporter
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Taxpayers wrote a $900,000 settlement check to a federal employee to compensate her for once being likened to a “Little Rascals” character by her boss, The Daily Caller News Foundation’s Investigative Group has learned.

The secret settlement appears to be one of the largest-ever discrimination settlement payouts to an individual federal employee. The payment came after an Equal Opportunity Employment office ruled that the remark was racist and accepted without challenge the claim that it caused nearly a million dollars worth of emotional harm.

The offending boss was Mary K. Kinney, then-executive vice president of Ginnie Mae, which is part of the Department of Housing and Urban Development (HUD).

Kinney’s offense was referring to the employee, who is black, as “Buckwheat,” a character from the Little Rascals movie series. HUD had already settled with another black female over racism allegations against Kinney–which suggests that they found the allegations credible–but kept her in the top post anyway.

Settlements are intended to save money by avoiding a potentially much more expensive court-ordered payment. But there are few examples of courts ordering federal agencies to pay an amount even greater than the Kinney settlement to a similarly-situated federal employee, suggesting that they were not performing that calculation.

When another HUD employee received $900,000, it was heralded as one of the largest equal-employment settlements of all time–and that employee was left unable to breathe or walk after HUD put her in an office with mold and refused to lift a finger when she complained.

In this case, the massive expense to taxpayers did keep the incident secret and save Kinney’s personal reputation from the tarnish of a public lawsuit accusing her of racism. The payment was authorized by Greg Keith, who worked directly for Kinney.

Kinney had previously inappropriately used taxpayer money to help her own reputation: the agency was faulted for wrongfully spending $4 million on a public relations contract designed in part to bolster her personal image, including getting her featured in a beauty magazine.

Ginnie Mae spokeswoman Cynthia Adcock declined to confirm the settlement. TheDCNF subsequently obtained the settlement agreement —which TheDCNF has published here — under the Freedom of Information Act.

Kinney’s job as chief operating officer and EVP of Ginnie Mae was to “administer Ginnie Mae’s $1.7 trillion Mortgage-Backed Securities” program. The agency’s formal name is the Government National Mortgage Association.

She quietly retired in February 2016 shortly after the settlement, which required her to undergo diversity training.

The recipient of the $900,000 jackpot, whose name was withheld by HUD, is a GS-15 employee, the highest-paying rank below the Senior Executive Service in the career civil service. She complained to the HUD Equal Opportunity Office (EEO), and in August 2015 it issued a ruling.

The HUD EEO–an internal office devoted solely to policing discrimination in HUD’s own workforce–admitted that the law requires that “there must have been a steady barrage of opprobrious comments and not a casual comment or accidental or sporadic conversation in order to trigger an entitlement to relief … routine work assignments, instructions, and admonishments do not rise to the level of discriminatory harassment.”

Yet it sided with the complainant anyway.

“The Complainant states that she was ‘really stunned’ that Ms. Kinney had called her Buckwheat, and was ‘deeply troubled and alarmed’ about the comment and ‘could barely think of anything else all weekend.” She said the film character “connotes a slow and ignorant African American.”

Her performance review in April 2012, the same month she was called Buckwheat, indicated she must “significantly improve your effectiveness as a leader in order to achieve real and expected quality solutions and results in the expected timeframe.”

Kinney later said that the woman displayed only a “subtle” reaction to the comment but she should have apologized “in the moment” anyway. Instead she apologized by email and said she “made a mistake in judgement in carrying such an expression in her inventory.”

After the insult, the woman was detailed to another office temporarily at her own request.

In the meantime, Kinney discovered that the woman’s workload was light enough that she could do it herself in addition to her own work.

After a few months, the office she was detailed to said it didn’t want her anymore. By that time her old job had gone away since she had not been there to do it, so Kinney created a position for her as a special assistant in Ginnie Mae’s procurement office, where she would make the same high salary. But the woman filed another complaint, claiming the job change was punishment for her earlier racism complaint and represented a slighting of “power, prestige, and privileges” since she would no longer have people working for her.

HUD’s Equal Opportunity Office said there is “no dispute” that Kinney uttered the remark, and called it an “utterly humiliating, race-denigrating slur.”

Buckwheat from Our Gang

Buckwheat from Our Gang

Despite the alternate explanation for her job change, the EEO said the agency has not “articulated a legitimate, nondiscriminatory reason for its actions.”

It said the woman should be restored to her original job, be paid $1,500 in punitive damages, be given an “Outstanding” performance rating, have vacation time added, and for Kinney be punished and management forced to undergo “extensive EEO” training.

The woman requested “compensatory damages,” and the EEO office asked her to provide “objective proof of the damages suffered… Proof can take the form of receipts and/or bills for medical care… statements concerning your emotional pain and suffering, inconvenience,” and other factors.

Though it is unlikely that she itemized “objective proof” of a million dollars in harm, the office appears to have accepted the amount uncritically.

In exchange for agreeing not to sue, HUD signed off on paying her a “lump sum gross amount of $900,000.” It was to be a secret settlement that “may not be shared or disseminated to others by the Agency or Complainant.” The agency produced it to TheDCNF only under threat of lawsuit.

Kinney could not be reached for comment.

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