FDIC head stepping down after report on agency's workplace culture, White House says
The White House said Monday that the chairman of the Federal Deposit Insurance Corporation will step down, a departure that follows the release of a damning report about the agency's toxic workplace culture.
The White House said Martin Gruenberg will step aside once a successor is appointed, and that President Biden will name a replacement "soon." The announcement came after the top Democrat on the Senate Banking Committee earlier Monday called for Gruenberg's removal.
Mr. Biden expects the FDIC "to reflect the values of decency and integrity and to protect the rights and dignity of all employees," Deputy Press Secretary Sam Michel said in a statement.
Gruenberg has held positions in various levels of leadership at the FDIC for nearly 20 years, and this was his second full term as FDIC chair. His long tenure at the agency made him largely responsible for its toxic work environment, according to the independent report outlining the agency's problems.
The 234 page report released Tuesday by law firm Cleary Gottlieb Steen & Hamilton cites incidents of stalking, harassment, homophobia and other violations of employment regulations, based on more than 500 complaints from employees.
The report says the agency fostered a workplace rife with harassment and bullying that mostly targeted women or people from underrepresented groups.
"[F]or far too many employees and for far too long, the FDIC has failed to provide a workplace safe from sexual harassment, discrimination and other interpersonal misconduct," the report said.
Employees harbored a fear of retaliation that dissuaded them from reporting misconduct, and the report noted that one worker said they were contacting the law firm by using a VPN and someone else's email because of their fear that senior executives would learn about their complaint.
Among the misconduct outlined in the report:
- One female worker said she feared for her physical safety after a colleague stalked her and continued to text her, including sending texts with partially naked women engaging in sex acts, even after she made a complaint about him.
- A male supervisor in a field office routinely talked about his female employees' breasts and legs, as well as his sex life.
- A senior bank examiner send a text of his genitals out of the blue to a woman examiner while she was serving on detail in a field office.
- Workers who are part of underrepresented groups were told by colleagues that they were "only hired" because of they were members of those groups, and told they were "token" employees hired to meet a quota.
Gruenberg was also taken to task in the report, citing employee reports that he sometimes lost his temper and treated workers in a "demeaning and inappropriate manner."
The findings about the FDIC's workplace culture comes after the Wall Street Journal published a November investigation that alleged male employees at the agency engaged in harassment, such as sending lewd photos to female employees, yet still kept their jobs.
The FDIC is one of several U.S. banking system regulators. The Great Depression-era agency is best known for running the nation's deposit insurance program, which insures Americans' deposits up to $250,000 to protect them if their bank fails.
Before Monday, no Democrats had called for Gruenberg's ouster, although several came very close to. But Ohio Sen. Sherrod Brown, the top Democrat on the Senate Banking Committee and who is facing a tough reelection campaign, issued a statement Monday calling for Gruenberg to step down, saying his leadership at the FDIC could no longer be trusted.
Gruenberg was grilled for two days last week on Capitol Hill in hearings largely focused on the FDIC's workplace culture and the failures disclosed in the report prepared by an outside law firm.
"After chairing last week's hearing, reviewing the independent report, and receiving further outreach from FDIC employees to the Banking and Housing Committee, I am left with one conclusion: there must be fundamental changes at the FDIC," Brown said in a statement.
Republicans have been calling for Gruenberg's ouster for some time and criticized the White House for not calling for his immediate departure.
-- additional reporting by Aimee Picchi.