Sun, May 4, 2014

The Treasury Department temporarily froze recruitment by its anti-money laundering arm and forced the agency to rescind 11 job offers because an investigation found it violated the federal employment code during an aggressive hiring push, according to several government officials.

The Office of Personnel Management, which governs labor practices in the government, determined that the Treasury's Financial Crimes Enforcement Network, known as FinCEN, illegally screened candidates in a quest to hire only lawyers for certain jobs, the officials said. It has recommended investigations by two other federal agencies, the sources added.

Rules for hiring at government agencies make it illegal to screen candidates for qualifications that are not stipulated in the job description, and the jobs the agency had posted were not designated as being only for lawyers, the officials said.

Some senior Treasury officials knew about the practice, but it was not halted until personnel management identified the problem, two of the sources said. Treasury sent a memo to FinCEN suspending its hiring authority, one of the sources said.

A Treasury spokeswoman, Hagar Chemali, said on Thursday that FinCEN is “committed to complying with all relevant federal rules and regulations regarding federal hiring.”

On Friday, she said, “FinCEN does not have a hiring freeze. It is continuing to recruit and hire.”

Chemali declined to comment on the memo or provide further explanation.

It was not clear when the hiring freeze was put into place and when it was lifted. The agency has three jobs posted on its website, with one listed as opening for applications on Thursday and one on Friday.

The temporary hiring freeze, the rescinding of job offers and further investigations into its practices could deal at least a short-term setback to its push to aggressively crack down on money laundering.

The agency has taken part in several of the highest-profile actions against banks in the past three years, including a record $875 million settlement with HSBC Holdings Plc for helping Mexican drug traffickers launder money in American accounts and an investigation into JPMorgan Chase & Co. for failing to alert regulators to suspicions about convicted Ponzi schemer Bernard Madoff.