Workday strip-club visits, alcohol use, consumption of pot ‘edibles’ cited in OIG report on NCUA’s former top lawyer, deputy

The former general counsel of the National Credit Union Administration (NCUA), then also the agency’s designated ethics official, retired from the agency a day after his interview with the agency inspector general’s office over allegations of workday strip-club visits, alcohol consumption, and consumption of marijuana “edibles” with the agency’s deputy general counsel, according to a report released Friday.

The report was released hours after NCUA Chairman Rodney Hood issued a statement decrying the alleged activity, which he said also pointed to possible harassment. “The NCUA is evaluating the organization’s policies and processes for reporting allegations and is taking additional actions,” said Hood. “These actions include requesting the NCUA Board create an Office of Ethics Counsel, supplementing our existing anti-harassment training programs, and offering additional third-party counseling services to employees.”

According to the OIG report, NCUA Executive Director Mark Treichel and Deputy Executive Director John Kutchey on Nov. 17 informed the OIG that Kutchey had learned from then-Deputy General Counsel Lara Daly-Sims that she and then-General Cousel McKenna drank alcohol and went to strip clubs during work hours. The reporting agent (RA) opened an investigation Nov. 18. The RA later expanded the scope of the investigation to include an examination of Daly-Sims’ time and attendance after the RA discovered that Daly-Sims’ NCUA daily parking garage duration was routinely less than eight hours.

According to the report, the investigation substantiated the allegations that McKenna and Daly-Sims drank alcohol and went to strip clubs during work hours; both affirmed this in their interviews.

“Daly-Sims stated in her interview that when she raised her concerns of getting in trouble, McKenna said that if they were reported to the IG, they should just say they were offsite at a planning session,” the report says. “When interviewed, McKenna initially claimed to have no knowledge of anyone from the Office of General Counsel drinking heavily at offsite meetings until the RA asked him if he attended offsite planning meetings.

“In addition, Daly-Sims stated during her interview that she and McKenna consumed edible marijuana during work hours while they were on work-related travel in New York City. McKenna stated in his interview that he had not used marijuana during the workday at the NCUA or at all since joining the Army in 1985, and that he did not remember consuming edible marijuana during the New York trip.”

The report continues, noting that McKenna on Nov. 19, the day following his interview, retired from the NCUA after being informed by Treichel that McKenna might be drug tested. Treichel also informed McKenna that he expected McKenna would not be at the NCUA Board meeting on Nov. 21 because he would have been placed on administrative leave.

NCUA announced McKenna’s retirement Nov. 20.

Daly-Sims resigned from her post Jan. 10, 2020, while on administrative leave.

The report notes that the U.S. Attorney’s Office for the Eastern District of Virginia declined to prosecute McKenna and Daly-Sims for drinking alcohol and going to strip clubs during the workday; and declined to prosecute Daly-Sims for time and attendance fraud.

Report of Investigation No. 20-01 Michael McKenna and Lara Daly-Sims, Feb. 10, 2020

RR: NCUA chairman responds to report, now public, about misconduct allegations at agency (March 6, 2020)