Federal Deposit Insurance Corporation Chairman Martin Gruenberg will be testifying before the House Financial Services Committee on Wednesday regarding a report that revealed the agency is rampant with sexual misconduct.
The 234-page report was conducted by Cleary Gottlieb Steen & Hamilton at the request of a special committee formed by the FDIC last year. Investigators talked to 500 out of 6,000 FDIC employees who shared their experiences of sexual harassment and recounted their fears of retaliation from their superiors. Accusations of sexual misconduct include supervisors sending employees their nude photos and taking them to brothels during business trips.
The report also found Gruenberg had a “reputation for bullying and for having an explosive temper” leaving staff feeling “disrespected, disparaged, and treated unfairly.”
“While not the root cause of the sexual harassment, discrimination, or other workplace misconduct impacting the agency as a whole, a number of people noted that tone and culture flows from the top down, and having a leader with a reputation of this type does create certain challenges in leading a cultural transformation that prioritizes a more positive workplace culture,” the report said.
Several members of Congress have called on Gruenberg to resign. A day following the release of the report, Republicans, including House Oversight Committee Chairman James Comer (R-KY), called on President Joe Biden to release all communications and documents related to the allegations against Gruenberg.
However, Rep. Maxine Waters (D-CA), the highest-ranking Democrat on the House Financial Services Committee, said the criticism of Gruenberg isn’t fair since it excludes his predecessor’s involvement in shaping the agency’s culture.
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“Tone at the top is important, and positive workplace culture needs to be modeled and reinforced from the top down,” she said in a Thursday statement criticizing the report.
Given that the five-member FDIC Board of Directors consists of three Democrats, it is unlikely that Gruenberg will be ousted from his position. In response to the allegations, the FDIC is proposing to form an independent Office of Professional Conduct, responsible for investigating misconduct and reporting it directly to the FDIC Board of Directors.
