FDIC is a workplace rife with sexual harassment, independent probe alleges
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The Federal Deposit Insurance Corporation is a workplace rife with sexual harassment and discrimination, an independent investigation alleged on Tuesday.
Why it matters: The damning report looks terrible for FDIC leadership, particularly chair Martin Gruenberg, who is a President Biden nominee.
- The investigation was commissioned by the FDIC last year after revelations of widespread misconduct came to light via a Wall Street Journal report.
- Law firm Cleary Gottlieb spoke with 500 FDIC employees — out of close to 6,000 total — many who recounted experiences of sexual harassment and described widespread fear of retaliation.
The big picture: It's rare to see a workplace's dirty laundry outed in such explicit detail.
- Often in the private sector, these types of independent law firm investigations are not released to the public.
Between the lines: The report questions Gruenberg's ability to lead the organization through any kind of cultural change.
- Gruenberg isn't the "root cause of all the workplace issues," the authors note, but "'tone at the top' is important."
- Gruenberg also has a reputation for being harsh, demeaning and insulting, they report, which "raises questions about the credibility of the leadership's response to the crisis and the 'moral authority' to lead a cultural transformation," they write.
Some lawmakers are already calling for Gruenberg's resignation, including at least one Democrat.
- Rep. Bill Foster of Illinois called for "sweeping changes" including "a change of leadership."
- "It's time for Chair Gruenberg to resign," Foster added in his statement.
- "It's time for Chairman Gruenberg to resign so the FDIC can move forward with the leadership it deserves," Sen. Tim Scott (R-S.C.) said in a statement Tuesday.
Yes, but: "Gruenberg has been a survivor at the agency," writes TD Cowen financial services analyst Jaret Seiberg in a note Tuesday.
- "He issued a note to employees expressing remorse and vowing change. That might be enough to convince progressive Democrats to continue to quietly back Gruenberg." At least until the end of the year, he writes, to give the agency time to finalize some pending financial regulations they like.
Catch-up quick: The investigation was commissioned after a Wall Street Journal story ran last year, detailing some of these issues.
- It's a highly detailed 234-page report with explosive details.
Case in point: "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,'" authors of the report wrote.
- "A number of employees recounted homophobic statements made by their Field Office Supervisor, including referring to gay men as 'little girls,' resulting in one of them, at least, believing he had to hide that he was gay."
What he's saying: "To anyone who experienced sexual harassment or other misconduct at the FDIC, I again want to express how very sorry I am," Gruenberg wrote to staff ahead of the report's release, per the WSJ. "I also want to apologize for any shortcomings on my part."
