Emily Flitter and Brett Wolf
Reuters
NEW YORK/ST LOUIS (Reuters) – The U.S. Treasury Department has frozen all recruitment by its anti-money laundering arm and forced the agency to rescind 11 job offers, after an investigation found it violated the federal employment code during an aggressive hiring push, according to several government officials.
The Office of Personnel Management, a federal agency that governs labor practices in the government, determined that the Treasury’s Financial Crimes Enforcement Network, known as FinCEN, illegally screened candidates in a quest to hire only lawyers for certain jobs, the officials said. It has recommended further investigations by two other federal agencies into FinCEN’s practices, they added.
Rules for hiring at government agencies make it illegal to screen candidates for qualifications that aren’t stipulated in the job description, and the jobs FinCEN had posted weren’t designated as being only for lawyers, the officials said.
Some senior Treasury officials knew about FinCEN’s practice but it was not halted until OPM identified the problem, two of the sources said.
A Treasury spokeswoman said that FinCEN is "committed to complying with all relevant federal rules and regulations regarding federal hiring."
OPM did not return calls and emails seeking comment.
The hiring freeze at FinCEN and further investigations into its practices could deal at least a short-term setback to its push to aggressively crack down on money laundering.
ACAMS moneylaundering.com, a compliance trade publication, previously reported that FinCEN was under scrutiny and that Treasury officials were considering suspending its hiring authority. However, the actual hiring freeze, the rescinded job offers, the investigations, and why OPM intervened have not been previously reported.
REMAKING AGENCY
The hires were being done as part of a drive by FinCEN’s director, Jennifer Shasky Calvery, to remake her agency, the formerly sleepy steward of U.S. anti-money laundering laws, into a powerful organization capable of standing up to big banks and other financial firms where violations are discovered.
FinCEN has taken part in several of the highest-profile actions against banks over the past three years, including a record $875 million settlement with HSBC Holdings Plc for helping Mexican drug traffickers launder money in U.S. accounts. Earlier this year, the agency also participated in an investigation into JPMorgan Chase & Co. That probe resulted in the bank agreeing to $1.9 billion in penalties and forfeitures for failing to alert regulators to suspicions about convicted Ponzi schemer Bernard Madoff.
FinCEN can issue civil penalties but lacks prosecutorial power.
The positions at FinCEN where the illegal hiring took place were in the agency’s recently revamped enforcement division, according to the officials. One of the officials said several of the people whose job offers were revoked are currently prosecutors at the U.S. Department of Justice, where Shasky served as the chief of the DOJ’s Asset Forfeiture and Money Laundering Section before moving to FinCEN in September 2012.
It is unclear whether any of the people who had job offers revoked suffered damage to their careers as a result.
At an ACAMS conference in March, Shasky talked about her hiring strategy.
"We needed people that understood, ‘How do you do enforcement? How do you issue a summons? How do you do a deposition? How do you negotiate a settlement? How do you draft the charging documents?’ Just kind of the nuts and bolts of doing enforcement," she said.
FinCEN ranked 296 of 300 in the 2013 list of the best places to work in the federal government, according to the non-profit Partnership for Public Service, based on data collected by OPM in an employee survey. The agency scored low on categories such as effective leadership, teamwork and employee skills-mission match. In 2012, FinCEN was ranked 147 out of 292.
INFLEXIBLE SYSTEM
Federal employment experts said the incident highlights the antiquated system that dictates hiring procedures inside the federal government, making the task of recruiting new government employees far more complicated and cumbersome than it is in the private sector.
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