A former top official at the Consumer Financial Protection Bureau is dismissing a Republican inquiry into whether he had a hand in the bureau's decision to award a $5 million contract to a consulting firm he co-founded.
During a congressional hearing last month, Rep. Patrick McHenry, a North Carolina Republican, asked CFPB Director Richard Cordray a series of questions about a contract that the bureau entered into with a nonprofit firm called ideas42.
Some of the questions centered around Sendhil Mullainathan, a Harvard economics professor and co-founder of ideas42, who left CFPB earlier this year after roughly two years as the bureau's assistant director of research.
Asked last week if he had any role in the contract, Mullainathan said: "I don't know what the contract is, because I recused myself from every side of that transaction I was never even involved in any side of that."
During last month's congressional hearing, McHenry asked Cordray about what contracting process the CFPB used. "For a former staffer of yours to get a $5 million contract without any apparent bids It appears to us as an enormous conflict of interest," McHenry said.
But a CFPB spokesperson said Monday that the ideas42 contract was competed for public bid, and eight proposals were received and evaluated using a standard government process. Mullainathan was not involved in developing the project, or any of the procurement documents, or in evaluating the proposals that the CFPB received, the agency spokesperson added.
The goal of the contract is to help the CFPB examine consumers' financial challenges in a range of decision-making areas, including challenges faced by older Americans, according to the CFPB spokesperson.
Ideas42 applies behavioral economics to solve social problems in areas including consumer finance, energy efficiency and education, according to the firm's website.
Mullainathan said that he is currently serving as a scientific adviser to ideas42. He said the "number one downside" of working at the CFPB was the politicization of the agency's work.