FHFA Director Bill Pulte has proposed slashing the agency inspector general’s budget by more than 60%, a cut watchdog staff say would force a 70–80% staffing reduction in FY2027 and suspend most criminal investigations. The move follows internal probes into whether Pulte improperly accessed mortgage records belonging to prominent Democrats, including Letitia James — an inquiry that was referred to federal prosecutors. Critics call the budget proposal part of a broader retaliation campaign against oversight, while related developments include DOJ inquiries and several notable federal court rulings affecting the Justice Department.
Bill Pulte Proposes Massive Cuts to FHFA Inspector General After Probe Into His Actions
Federal Housing Finance Agency (FHFA) Director Bill Pulte has proposed cutting the Office of Inspector General’s budget by more than 60% for the coming fiscal year — a move watchdog staff say would effectively cripple the office’s ability to investigate misconduct.
What Officials Say
Inspector General employees told members of Congress in a letter that the proposed reductions would force a 70–80% staffing decline in FY2027 and “result in the discontinuance of essentially all criminal investigations conducted by our Office of Investigations.” Senate Democrats have sent a letter demanding the funding be restored and have called for Pulte’s resignation.
Origins And Allegations
The proposed cuts come after internal probes examined whether Pulte improperly accessed mortgage records belonging to prominent Democrats, including New York Attorney General Letitia James. According to reporting in The Wall Street Journal, Fannie Mae’s ethics and investigations unit received complaints that senior officials had directed staff to obtain James’s mortgage documents and those of other public figures. Fannie investigators escalated the matter to the FHFA Office of Inspector General, which referred a report to the U.S. Attorney’s Office in the Eastern District of Virginia.
That referral intersected with the high-profile prosecution of Letitia James: James was indicted in October by then-acting U.S. Attorney Lindsey Halligan, but a federal judge later dismissed the indictment because Halligan had been unlawfully appointed; subsequent attempts to re-indict James were rejected by two grand juries.
Retaliation Allegations And Fallout
Observers say the budget move is part of a broader pattern of retaliation against internal oversight. The Wall Street Journal reported that FHFA acting Inspector General Joe Allen, who forwarded the internal findings to prosecutors, was later asked to step down. Around the same time, roughly a dozen staffers in Fannie Mae’s ethics and investigations unit were dismissed.
More recently, the Journal reported that Pulte had sought mortgage records connected to Todd Blanche, a Justice Department official who has clashed with Pulte. Some officials told the Journal they believed Pulte was trying to collect information to pressure or undermine DOJ and FHFA officials; Pulte has denied improperly accessing internal files. Separately, the Department of Justice opened an inquiry into whether Pulte or others improperly shared information related to DOJ’s investigation into allegations involving Sen. Adam Schiff.
Timing And Context
Whether the Journal’s sources included the FHFA inspector general’s office, DOJ investigators, or others is not publicly confirmed — but the sequence is notable: within days of reports about Pulte’s scrutiny of DOJ officials, he proposed new funding cuts that watchdogs say would all but end the IG’s criminal investigations.
Related Legal And National Security Developments
Separately, several federal judges have issued significant rulings and orders this month that touch on the Justice Department and national security policy. U.S. District Judge Stanley Bastian issued a preliminary injunction restoring Roger Rogoff as a court-appointed U.S. attorney in Seattle and blocked efforts to remove court-appointed U.S. attorneys at the president’s discretion; the DOJ has moved to appeal. U.S. District Judge April Perry has opened an inquiry into DOJ conduct in the Broadview 6 case and named William Baude as a friend of the court to provide an adversarial perspective.
In national security reporting, The Wall Street Journal says Pentagon preparations are underway for a possible renewal of large-scale strikes against Iran later in the year. The USS Theodore Roosevelt carrier strike group and the USS Makin Island amphibious ready group have departed from California and are expected to bolster U.S. forces in the region when they arrive.
And in New York, U.S. District Judge Paul A. Engelmayer ordered the administration to produce the Office of Legal Counsel memo used to justify at-sea strikes on suspected drug-smuggling boats, concluding the government cannot rely publicly on the memo while withholding it from court review.
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