WASHINGTON–A number of Republican members of are calling on FDIC Chairman Martin Gruenberg to step down in the wake of reports of sexual misconduct and misogyny at the agency.
Gruenberg is a Democratic appointee.
As CUToday.info reported here, a Wall Street Journal investigation found numerous women complaining of a “toxic” culture at the FDIC, with reports of being forced into trips to strip clubs, sexual harassment, and drinking. During a Senate hearing, one senator asked Gruenberg “What the hell is going on at the FDIC?”
The Journal has since followed up with a long report that alleges Gruenberg, 70, is known for having a temper and has engaged in other “bad behavior.”
During hearings before the House and the Senate, which had already been scheduled prior to the Wall Street Journal reporting, Gruenberg said he was “personally distributed and deeply troubled by the report,” 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.”
Says He Was Subject of Investigation
When pressed by one senator over whether he knew of the claims being made, Gruenberg, who has been on the FDIC board since 2005 and has served as chairman and vice chairman in the past, said, “As a general matter, no, senator.”
During a hearing in the House, House Financial Services Committee Chairman Patrick McHenry (R-NC) asked Gruenberg if he had ever been the subject of any investigation related to his workplace conduct, Gruenberg said no. But McHenry later issued a statement saying
Gruenberg had "initially misled" the committee during testimony, and that Gruenberg has since acknowledged that he has been the subject of such an investigation, according to Reuters.
Little Action Taken
The Wall Street Journal report and the congressional testimony noted the FDIC’s Office of Inspector General flagged some of the issues in 2020, but little action was taken. The male employees whose behavior was identified in the report are either still with the FDIC or transferred to other government agencies.
The FDIC has retained the law firm Baker Hostetler to conduct an investigation. During a House hearing, Rep. Maxine Waters (D-CA) asked Gruenberg to provide an update within 15 days, a request that was also made of NCUA, as Chairman Todd Harper was also on the panel testifying before Congress. Harper said NCUA would comply.
Calls for Resignation
Now, some members of Congress are calling on Gruenberg to step down.
Sen. Tim Scott (R-SC), who is the ranking Republican on the Banking Committee, said Gruenberg should "seriously consider" whether he was fit to lead the agency. Republican Senators Sen. John Kennedy (R-LA) and Thom Tillis (R-NC), who are also members of the Senate Banking Committee, also called on Gruenberg to resign.
Under FDIC bylaws, Vice Chair Travis Hill, a Republican, would replace Gruenberg should he step aside.
2 Board Members Issue Statement
As CUToday.info also reported earlier, the two Republican members of the five-person FDIC board, Travis Hill and Jonathan McKernan, issued a statement saying, “This has been a difficult week for the FDIC. Restoring faith in the work environment at the FDIC will be challenging. One essential step will be a comprehensive review of the recently reported allegations that is truly and fully independent. This includes, at a minimum, the following:
- “First, the review must look at all conduct described in the recent news reports, in all parts of the organization, including that of the chairman and general counsel, and they need to fully recuse from the process.
- “Second, the FDIC board, not FDIC management, should determine the scope of the investigation, the appropriate structure for day-to-day direction of the review, and who conducts the inquiry.
“News stories like these make it more difficult for the FDIC to do its job and undermine public confidence in the agency,” Hill and McKernan said. “We will continue to work with our fellow board members to restore the faith of the public and our employees in the FDIC.”
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