IG Report Reveals Strip Club Visits, Alleged Drug Use by Former NCUA Attorneys
“On average, their visits to strip clubs, including travel, were at least 3 to 4 hours long."
Former NCUA General Counsel Michael McKenna and his former deputy, Lara Daly-Sims, on several occasions visited strip clubs, drank alcohol and allegedly used marijuana during work hours, the agency’s Inspector General said in a report released Friday.
Both attorneys have left the agency, with McKenna retiring and Daly-Sims joining a private law firm.
“Daly-Sims said that going out drinking or to a strip club was always McKenna’s idea and that she told him that she was concerned about getting in trouble,” the IG said in the report, provided to CU Times under the Freedom of Information Act. The IG also released reports of interviews that had been conducted with agency officials.
“On average, their visits to strip clubs, including travel, were at least 3 to 4 hours long,” the IG said.
“As a single mother, Daly-Sims was afraid of losing her job, while McKenna did not have concerns because he was already eligible for retirement,” the report continued.
Daly-Sims said she felt pressured to engage in “inappropriate behavior” with McKenna, with the general counsel frequently mentioning that NCUA officials loved him and he could help Daly-Sims get the general counsel job when he retired.
Even before the report was released, the NCUA began damage control, with Chairman Rodney Hood holding a webinar on harassment issues with employees Thursday and issuing a statement Thursday night.
“I want you to hear this update directly from me,” he said during the webinar, but did not go into details about the report. CU Times obtained an audio recording of the session.
The report was released Friday afternoon.
Beginning in Feb. 2017, McKenna, who was the agency’s designated ethics official, and Daly-Sims went to strip clubs seven times over a 22-month period, the IG said.
Daly-Sims also said the two consumed edible marijuana during a work-related trip to New York City.
When he was interviewed by NCUA officials about the marijuana allegation, McKenna initially said he had not used marijuana since joining the Army in 1985.
McKenna retired from the agency the following day, after being informed that he might have to take a drug test.
The IG said Daly-Sims was paid at least $46,951.96 in salary hours that she didn’t actually work.
The report stated the Justice Department would not prosecute Daly-Sims for that overpayment.
She resigned from the agency on Jan. 10 and later declined to be interviewed about the discrepancies in her time and attendance, the report stated.
In his Thursday statement, Hood said the NCUA learned of the allegations in November and immediately notified the IG’s office.
“I was surprised and disappointed to learn of the activities described in the report. They are unacceptable and do not represent the values of this agency,” Hood said.
He said the agency is taking several steps to try to avoid similar problems in the future. He said the board will be requested to establish an Office of Ethics Counsel. The agency also will supplement its existing anti-harassment training and will offer third-party counseling services.