A damning independent report released Tuesday says the Federal Deposit Insurance Corporation must undergo sweeping reforms to address widespread sexual harassment and other misconduct, raising questions about the future of the banking regulator’s leadership. is being cast.
The report, conducted in November in the wake of a Wall Street Journal investigation, cited testimony from more than 500 people, including FDIC Chairman Martin Gruenberg, who accused him of bullying and verbal abuse. This included people who claimed to have been abused.
Overall, the Cleary Gottlieb report found that sexual harassment, racism and bullying were pervasive at all levels and long tolerated by senior leaders, while complaints of misconduct were met with retaliation. It highlights the reality of government agencies.
“For too many employees, for too long, the FDIC has failed to provide a workplace safe from sexual harassment, discrimination, and other interpersonal misconduct,” the report said. It added that employees were frequently assigned new roles.
Cleary Gottlieb’s report highlights a toxic culture within the government agency tasked with implementing an “action plan” to address the problems identified in the Journal’s reporting, and which itself has faced allegations of wrongdoing. revealed that he had been the subject of
The findings are likely to spark new calls for the removal of Gruenberg, a Democrat who has led the agency for nearly 20 years. Several Republicans in Congress called for his immediate resignation following the Journal report, while Democrats called for a full investigation.
According to the report, Gruenberg has been described by employees as “harsh,” “aggressive,” and “upset” when presented with bad news or opinions they don’t agree with, including: The report also includes cases in which he was treated in a “humiliating and inappropriate manner.”
In a statement to staff, Gruenberg called the report “sobering” and vowed to implement its recommendations.
He said he was “ultimately responsible” for everything that happened at the agency and apologized for any shortcomings. He added, “Once again, I would like to express my deep regret.”
leadership cloud
The report recommends appointing new officials dedicated to changing the FDIC’s culture and hiring an independent third party to assist with the transition, but does not consider whether top leaders should resign. do not have.
It also establishes an anonymous hotline for the agency to report fraud and abuse, develops a more timely and transparent process for handling complaints, and ensures protection and support for victims. He called on the government to take measures to ensure this.
The departure of Gruenberg, who was appointed by President Joe Biden in 2022, could jeopardize the administration’s efforts to impose stricter financial regulations, including: Pending regulatory proposals Capital requirements for banks have drawn opposition from Republicans and industry representatives.
A White House press secretary did not respond to a request for comment.
If Mr. Gruenberg resigns or is fired, the agency’s bylaws state that Republican FDIC Vice Chairman Travis Hill will replace him and that the agency’s board of directors will be split evenly between Republicans and Democrats. There is.
