The long-serving ethics officer for the National Credit Union Administration (NCUA) retired late last year after admitting to visiting strip clubs and drinking on the job, according to an internal investigation.

The investigation by the NCUA’s Office of Inspector General found that Michael McKenna, who had been the general counsel and ethics officer for the NCUA for 30 years, visited strip clubs and drank heavily during the workday seven times between February 2017 and December 2018. The report, dated Feb. 10, was released last week.

McKenna, who retired from the NCUA in November, could not be reached for comment.

McKenna visited the strip clubs with his deputy, Lara Daly-Sims, who drank heavily with him, the report said. In addition, Daly-Sims told investigators she and McKenna ate marijuana edibles on the train ride home from one strip club; McKenna denied the allegation, the report said.

Daly-Sims resigned from the NCUA earlier this year and is now a partner with the Washington law firm Chapman and Cutler.

The report concluded that as a result of her conduct, Daly-Sims worked 374 fewer hours between April 2017 and November 2019 than she had claimed, worth almost $47,000 in salary.

Cathy Harris, an attorney representing Daly-Sims, alleged Daly-Sims was sexually harassed by McKenna, her former supervisor. The OIG investigation was launched in November after Daly-Sims reported the harassment to a manager, Harris said. Daly-Sims later initiated an Equal Employment Opportunity complaint in December, which is still pending, Harris said.

“We are dismayed that the IG investigation failed to mention or investigate her complaints of sexual harassment,” Harris said in an e-mailed statement. “We are appalled that the IG publicly released a report with the name of a sexual harassment victim without her consent.”

The OIG’s findings were handed over to the U.S. Attorney’s Office for the Eastern District of Virginia, which declined to prosecute McKenna for drinking alcohol and going to strip clubs during the workday and Daly-Sims for time and attendance fraud.

NCUA Chairman Rodney Hood said he was “surprised and disappointed” to learn about the activities described in the report.

“They are unacceptable and do not represent the values of this agency,” he wrote in a statement posted on the NCUA’s Website.

The NCUA has been criticized for its lax oversight of federally insured credit unions, and the agency has come under scrutiny before. Its previous chairman, J. Mark McWatters, was criticized for ringing up expensive dinner and travel at taxpayer expense. He remains on the agency’s board but is not the chairman.

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Aaron Nicodemus covers regulatory policy and compliance trends for Compliance Week. He previously worked as a reporter for Bloomberg Law and as business editor at the Telegram & Gazette in Worcester, Mass.

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