GOP Senators Urge FDIC Chair to Resign Over Workplace Misconduct Claims

They accuse FDIC Chairman Martin Gruenberg of contributing to ‘a toxic workplace environment’ at the agency.
GOP Senators Urge FDIC Chair to Resign Over Workplace Misconduct Claims
Martin Gruenberg, chairman of the Federal Deposit Insurance Corporation, testifies before the House Financial Services Committee in Washington on Nov. 15, 2023. (Madalina Vasiliu/The Epoch Times)
Aldgra Fredly

Five Republican senators on the Senate Banking Committee have demanded that Federal Deposit Insurance Corp. (FDIC) Chairman Martin Gruenberg resign over workplace misconduct allegations.

In a letter dated Dec. 7, Sens. Tim Scott (R-S.C.), Thom Tillis (R-N.C.), Cynthia Lummis (R-Wyo.), Kevin Cramer (R-N.D.), and Steve Daines (R-Mont.) requested that Mr. Gruenberg provide information about the claims of a hostile environment at the agency.

They cited Wall Street Journal reports that uncovered the FDIC’s years of mishandling sexual harassment and discrimination allegations and Mr. Gruenberg’s role in dealing with these cases during his tenure.

“The allegations detailed in these press reports are deeply disturbing and unacceptable at any workplace, let alone a federal agency,” the letter reads.

Mr. Gruenberg allegedly had “a reputation for bullying and for having an explosive temper” at the agency, which resulted in at least one probe being launched against him after he berated a female employee while he was vice chairman, according to the letter.

“According to these reports, both you and your top deputies ‘have been involved in decisions over high-level examples of alleged sexism, harassment, and racial discrimination in which the agency didn’t take a hard line with individuals accused of misconduct,’ allowing the culture of harassment and discrimination to persist and flourish,” it added.

It stated that most of these cases were met with “little to no disciplinary action on the part of the alleged perpetrators,” forcing victims to continue working with their harassers.

The senators urged him to step down as chairman and board member, saying that the FDIC requires “someone with more credibility” given its role in maintaining public confidence in the nation’s financial system.

“The culture of an organization is set from the top. As such, we have significant concerns with your ability to continue leading the FDIC as it seeks to clean up its public image and provide much-needed changes to its workplace culture to return the FDIC to working order,” the senators added.

They provided Mr. Gruenberg with a list of questions and requested that he furnish all records of complaints and investigations that occurred during his tenure. All information must be submitted by Jan. 4, 2024.

The FDIC’s inspector general’s office said last month that it will perform a special inquiry into “the leadership climate at the FDIC with regard to all forms of harassment and inappropriate behavior.”
The inspector general said it will also assess the FDIC’s sexual harassment prevention program.

Prevalence of Alleged Harassment in FDIC

In The Wall Street Journal’s reporting, which featured interviews with more than 100 current and former employees, the office culture throughout the federal regulatory agency was described as a “boys club,” and that bank examiners who engaged in misogynistic behavior faced little consequences.

The harassment became so prevalent and intense that many women quit the FDIC. Additionally, there were internal criticisms that Mr. Gruenberg maintained a fierce temper and that he did nothing in response to complaints.

The Federal Deposit Insurance Corp (FDIC) logo at the FDIC headquarters in Washington on Feb. 23, 2011. (Jason Reed/Reuters)
The Federal Deposit Insurance Corp (FDIC) logo at the FDIC headquarters in Washington on Feb. 23, 2011. (Jason Reed/Reuters)

“Employees said bad workplace behavior has festered at the agency for years because top administrators didn’t fully address problems, whether in regional offices or in the Washington headquarters.

“When employees did raise such issues, they said they believed the agency swept the problems under the rug,” the newspaper reported.

There were also allegations of racism across the organization.

In September 2018, an anonymous group of black employees expressed concerns to then-Chair Jelena McWilliams that they were mistreated and “afraid to speak out about the issues they are facing for fear of repercussions.”

In response to these grievances, the FDIC adjusted its promotion and ratings systems to rely more on merit.

Andrew Moran contributed to this report.