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Agency ordered race, sex records on applicants

September 30, 1997

WASHINGTON (AP) _ Top officials of the agency that regulates credit unions directed staffers to track job applicants’ race and gender and later ordered the data purged before auditors showed up, documents released Tuesday show.

Federal rules prohibit agencies from identifying the race and gender of applicants before they are hired.

``We are counting on you to cleanup your own″ files and remove ``the identification of applicants by race and national origin,″ wrote Dorothy Foster, human resources director at the National Credit Union Administration, in a memo to regional hiring managers last April. That was two months before an Office of Personnel Management audit.

OPM found that 60 to 80 credit union examiner jobs had been filled using improper hiring practices that prevented eligible applicants, including veterans and laid-off federal workers, from getting a fair shot at the jobs.

The managers had been instructed by NCUA Executive Director Karl Hoyle to keep separate files noting applicants’ race and gender and whether they had a disability. The practice was part of an effort to recruit more minorities and people with disabilities, Hoyle said in a July memo obtained by congressional investigators.

``Duplicate the ... applicant list and annotate it with the applicant’s sex, race, national origin and disability, when known,″ Hoyle said in the memo. ``Retain the original list, without annotation, for the case files.″

NCUA Chairman Norman D’Amours told a House Government Reform and Oversight subcommittee that the agency has taken steps to correct problems in its hiring practices.

``It’s clearly wrong, clearly illegal and shouldn’t have happened,″ D’Amours said before testifying at the subcommittee’s hearing Tuesday.

He said the race and gender information may have been collected on applicants who were about to be hired. ``I’m not ready to draw any conclusions,″ D’Amours said.

Foster and Hoyle were placed on administrative leave last week. Both declined to comment.

OPM has stripped NCUA of its hiring authority and referred the matter to the Office of Special Counsel for investigation. That office can bar individuals from federal work and refer illegal conduct to the Justice Department.

Rep. Spencer Bachus, R-Ala., subcommittee chairman, said the new documents ``created a true credibility crisis″ for NCUA.

The NCUA memos, obtained by subcommittee investigators from agency officials, provided fresh details of improper hiring practices that first came to light in an OPM report obtained by The Associated Press Sept. 19.

NCUA circumvented federal hiring rules in order to employ preselected candidates by advertising for positions in places where no jobs existed. The agency, which employs 925, would hire desired candidates at those locations and immediately reassign them to other offices, the report said.

In minutes of a July 1996 meeting of NCUA regional directors, disclosed for the first time at the hearing, Hoyle and Foster outlined the practice in a discussion of how to improve diversity.

``RD (regional director) will choose city and create vacancy announcement. RD staff will assist applicant through the application process. Keep hire at that location for 90 days, then move where you need them,″ the document said.

NCUA published job announcements in such out-of-the-way places as Hazard, Ky. (population 5,416) and Bluefield, W. Va. (population 12,765). Those hired never worked in the towns and instead were assigned to work in Miami, Atlanta and other big cities.

NCUA also employed people under a special program that allows hiring without advertising jobs. However, the NCUA positions for which the people were hired required that the jobs be advertised, the OPM report said.

OPM acting Director Janice Lachance told the subcommittee that the problems at NCUA were the worst the agency had seen in years.

``Findings of this magnitude are very rare,″ she told the panel.

NCUA officials had said previously that the practice bolstered minority representation. The report showed that of 45 hired between July 1995 and March 1997, 40 were white, three were black and one was Hispanic. Twenty-two of the whites were women.

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