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Embattled FDIC Chairman Reportedly Prepared To Remain In Power For Months Following Resignation

After pledging to resign due to an investigation into the workplace, Federal Deposit Insurance Corporation Chairman Martin Gruenberg is preparing to remain in power for the foreseeable future, people familiar with the conversation told The Wall Street Journal.

Law firm Cleary Gottlieb Steen & Hamilton concluded its investigation into the FDIC workplace in May, finding that 500 individuals, close to one-in-ten employees at the entire agency, had experienced some sort of “sexual harassment, discrimination and other interpersonal misconduct” in the workplace. Following the report and a congressional hearing, Gruenberg announced May 20 that he would resign from his post once a successor was named. (RELATED: Biden’s Next Big Nightmare Could Be Brewing In Aftermath Of Federal Sex Scandal)

After his resignation announcement, Gruenberg told his senior staff that he is planning to stay in power for the next few months while a replacement is found, people familiar with the conversation told the WSJ. Several senior officials have reportedly expressed skepticism that the Senate would be able to confirm a replacement ahead of the 2024 election, potentially leaving Gruenberg in power for an extended period of time.

The White House plans to nominate a replacement for Gruenberg “soon,” the WSJ reported, though an official timeline on the action has not been indicated.

“While the FDIC is an independent agency, as we have said, the President of course expects the Administration to reflect the values of decency and integrity and to protect the rights and dignity of all employees. The President will soon put forward a new nominee for FDIC Chair who is committed to those values and to protecting consumers and ensuring the stability of our financial system, and we expect the Senate to confirm the nominee quickly,” Sam Michel, White House acting deputy press secretary, told the Caller in a statement.

Amid the 234-page report that sparked the chairman’s resignation, the firm wrote that the instances of sexual harassment and discrimination “did not occur in a vacuum,” instead they were the result of a “misogynistic,” “patriarchal,” “insular” and “outdated” workplace. Some of the examples that staffers alleged were detailed in the investigation.

“Women in one field office recounted how, to their dismay, it became routine to hear their supervisor talk about their breasts and legs and his sex life,” the report stated.

“A woman examiner reported on the shock of receiving a picture of an FDIC senior examiner’s private parts out of the blue while serving on detail in a field office, only to be told later by others in that field office that she should stay away from him because he had a ‘reputation,’” another part of the report reads.

Federal Deposit Insurance Corporation Chair, Martin Gruenberg testifies during a US Senate Banking, Housing, and Urban Affairs oversight hearing on financial regulators, focusing on accountability and financial stability, at Capitol Hill in Washington, DC, on May 16, 2024. (Photo by ROBERTO SCHMIDT/AFP via Getty Images)

As a replacement awaits, the WSJ reported that some staffers are wondering if the resignation was a meaningful action.

The chairman sent a video message to FDIC staffers on May 28 detailing how the agency was planning to respond to the investigation into the workplace.

“We are making progress in implementing all of the recommendations and action items, and we’ll move as quickly as possible to complete this work,” a transcript of the message, obtained by the Daily Caller, reads. “The FDIC has no higher priority, I have no higher priority, than to make our workplace safe, secure, and inclusive for everyone who works at the FDIC.”

Gruenberg has appeared to have conducted business as normal at the FDIC, despite his announced resignation, the WSJ reported. After hosting a virtual press conference on the health of the banking system Wednesday, Gruenberg took questions from his reporters on his future at the FDIC, the outlet reported.

One reporter asked the chairman to explain his decision to remain in power until a successor is chosen and if there was a scenario where he would depart sooner.

“I continue to serve until a successor is chosen by the Senate, that is my intention. I think the agency benefits from having a full board and that was my commitment to follow through on that,” the chairman responded.

If Gruenberg’s fully departs, two Democrats and two Republicans would remain on the board of the FDIC.

As a part of his commitment to change the culture of the FDIC, Gruenberg has implemented an “independent transformation monitor” and a third-party expert to advise on the transformation, the WSJ reported. The changes have reportedly been a point of tension among the board, as Jonathan McKernan, one of the board’s Republican members, says the board should be in charge of the transformation process instead. (RELATED: Burgeoning Sex Scandal Pits Biden Against His Biggest Backers At Critical Moment)

“It’s unclear we’ll see new leadership soon,” McKernan told the WSJ. “That means it’s important that the board instead of management is driving culture change during this period of transition.”

“We have issued expressions of interest to employees to participate in this work and I encourage you to take part. This effort requires an all agency response and I hope, I hope you will participate in this effort,” Gruenberg video message, obtained by the Caller, said. “The FDIC is a great agency with a critically important mission and an extraordinary workforce. I am confident that we can address these issues and look forward to working with you in the coming weeks to achieve that goal — to make the FDIC a safe, secure, and inclusive workplace for everyone.”

The FDIC referred the Daily Caller to the chairman’s previous statements on his resignation.



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