WASHINGTON–The chairman of the FDIC said he is “personally disturbed and deeply troubled” by a new report of a misogynistic and toxic culture at the agency, with male workers acting abusively against women, including supervisors inviting female employees to strip clubs, another supervisor requesting sex with an employee, and employees being urged to drink whiskey while working.
FDIC Chairman Martin Gruenberg’s comments came during a Senate hearing at which he said he was not aware of the specifics of the allegations, but several senators noted he has been a board member at the agency since 2005, and has previously served as vice chairman and as chairman. Gruenberg was subjected to several pointed comments by senators, including one who asked, “What the hell is going on at the FDIC?” (See separate report.)
The FDIC’s Inspector General flagged many of the issues three years ago, but the FDIC workers and ex-workers who spoke with the Wall Street Journal said the troubling issues remain.
According to the Wall Street Journal’s long report, the toxic work environment at the FDIC has for years caused employees to “flee from an agency they say enabled and failed to punish bad behavior,” according to the investigation, which is based on interviews with FDIC employees as well as legal filings, union grievances, Equal Employment Opportunity complaints, emails, text messages and other internal documents.
‘Sexualized Boys’ Club’
“Female examiners left the FDIC because of what they say was a sexualized, boys’ club environment and the belief they were consistently given fewer opportunities than their male counterparts, according to interviews with more than 100 current and former employees, including more than 20 women who quit,” the Journal reported. “While traveling to banks across the country, where regulators are meant to evaluate banks’ financial stability and compliance with regulations, male examiners talked openly about female colleagues’ appearances. A former female employee recalled her male colleagues saying women needed to use sex to get ahead at the FDIC, as they stared at her.”
FDIC Chairman Responds
The FDIC’s Gruenberg was asked about the report and its findings numerous times during testimony before a Senate Banking Committee hearing on financial oversight at which NCUA Chairman Todd Harper also testified (see related story).
Gruenberg said the FDIC is conducting a “comprehensive review” and has engaged an independent third party to assist in the investigation. He said he expects that review to take 90 days.
“I am personally distributed and deeply troubled by the report,” Gruenberg said, adding he has “no higher priority” than to ensure all FDIC employees are respected and work in a safe environment.
“It's quite clear we've had employees at the FDIC subjected to horrendous experiences that simply are unacceptable and can't be tolerated, and it's really going to be incumbent on the agency to take all actions necessary to come to grips with this and to address it effectively,” Gruenberg said. “I think the core issue here is we have appropriate policies and procedures in place, but the issue is it's really on management to instill the confidence in our employees to utilize those procedures and policies in a way that they can feel safe and secure and that their information is kept confidential. That's not an easy thing to do.”
Holding People ‘Accountable’
He said the FDIC also needs to have in place the processes to hold accountable the individuals who have engaged in misconduct. In response to questions from several senators, Gruenberg said he had no knowledge of the specific allegations being made.
None of the men named in the report by the Wall Street Journal have been fired, according to the report, and remain employed at the agency. Sen. Jon Tester (R-MT) said during the hearing he believes that if “you’re going to change behavior, the best way to do it would be to deal with these folks severely.”
The Allegations
Among other allegations made in the Journal report:
- The FDIC tolerated a heavy drinking culture. “The FDIC’s 11-story hotel outside Washington, where out-of-town employees stay when attending training, was a party hub, where people have vomited in the elevator and urinated off the roof after nights of heavy drinking.”
- Some called life on the road the “Wild West.” One female examiner said she was pressured by her male colleagues to drink and she felt they were tracking how many glasses of wine she drank.
- One female employee said she was told she did not receive a good review because the man who gave her the review “is just intimidated by tall, beautiful women.”
- Male employees invited female employees along to a strip club.
Inspector General Report
The FDIC’s Inspector General published a report in 2020 that cited a survey the IG conducted in 2019 that found 8% of more than 2,300 respondents said they had been sexually harassed. Some 38% of those harassed said they didn’t report the incidents for fear of retaliation. The FDIC received 12 allegations of sexual harassment from 2015 to 2019, the report said, according to the Journal.
The Journal said the FDIC declined to respond to detailed questions about employees’ drinking, specific employees’ claims of harassment and descriptions of sexualized or inappropriate work environments.
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