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The Federal Deposit Insurance Corporation has a ‘misogynistic’ and ‘insular’ workplace whose president may not be well-positioned to lead needed reforms, according to a new report commissioned following complaints of widespread sexual harassment within the American banking regulator.
The FDIC, which employs nearly 6,000 people, commissioned an independent report late last year in response to news reports of harassment and discrimination against female employees.
The report released Tuesday describes an organization with deep-rooted problems, calling it “a good old boys’ club where favoritism is common, the wagons circle around managers, and senior executives with a well-known reputation for romantic relationships with their subordinates enjoy long careers. without any apparent consequence.
Martin Gruenberg, who has worked at the agency for most of the past two decades, including 10 of the last 13 years as president, has been criticized as an angry boss who must change his own behavior in order to fix the agency .
As recently as 2023, the report said, FDIC employees had seen Gruenberg “lose his temper and express his anger in a manner that they considered offensive and inappropriate.”
The subjects of the anger “left these meetings feeling personally and unfairly verbally attacked.”
The report said that given Gruenberg’s length of tenure at the top, as well as allegations about his character “could hamper his ability to build confidence in leading meaningful cultural change, as would his apparent inability or refusal to recognize how others experience certain difficult interactions with him.
The report adds: “For these challenges to be overcome, there must at least be a genuine and lasting commitment to driving cultural change, accompanied by recognition that such change is necessary because of past failures, including his own. »
A person close to FDIC management said the board had not discussed Gruenberg’s possible resignation. The person was not aware of any terminations related to the report.
Some lawmakers renewed calls for the president to step down on Tuesday.
Patrick McHenry, chairman of the House Financial Services Committee, said it was time for Gruenberg to step down. “The independent report released today details his inexcusable behavior and makes clear that new leadership is needed at the FDIC,” he said.
Other Republicans on the committee followed suit, as well as Democrat Bill Foster, who said on the social networking site
However, Sherrod Brown, Democratic chairman of the influential Senate Banking Committee, stopped short of calling for Gruenberg’s departure, saying the chairman “must accept his responsibilities and must immediately work to make fundamental changes to the agency and to his culture “.
The report, produced by law firm Cleary Gottlieb, lifts the lid on widespread reports of sexual and racial harassment within the regulator and fears of reprisals among staff who spoke out. The report was based on conversations with more than 500 current and former employees.
Gruenberg apologized to staff in an internal memo Tuesday, calling the report “sobering.”
He said the agency would follow the report’s recommendations, including appointing an internal person to lead the cultural transition and an external auditor of progress.
“Hundreds of our colleagues have reported painful experiences of mistreatment and feelings of fear, anger and sadness,” Gruenberg wrote. “I accept the findings and recommendations of this report and thank the special review committee for its comprehensive work.”
He reported that the FDIC has taken steps to begin to address some of the complaints raised – providing more support for victims, in-person training for all of its employees, strengthening reporting procedures and improving accountability for any person guilty of bad behavior.
“We will spare no effort to create a workplace where every employee feels safe, valued and respected,” the president said.
