Top House Democrat calls on FDIC chairman to resign after sexual harassment report

Rep. Bill Foster (D-Ill.) called on FDIC Chairman Martin Gruenberg to resign Tuesday after a law firm investigation confirmed a report of rampant sexual misconduct, lewd behavior and retaliatory management practices at the federal banking regulator.

Foster became the first House Democrat to call for Gruenberg’s resignation, joining some fellow Republicans, including House Financial Services Committee Chairman Rep. Patrick McHenry (R-N.C.) and members of the House Banking Committee. Senate, which in December similarly called for Gruenberg’s resignation.

“I am shocked and deeply disturbed by the details of widespread sexual harassment and discrimination at the FDIC outlined in the report released today, and I commend the courageous individuals who have come forward to shine a light on these abuses,” Foster wrote on X.

“Radical changes must be made to fix the toxic work environment that has run rampant for too long, and that starts with a change in leadership,” he continued, “It is time for President Gruenberg to step down.”

The investigation, carried out by the law firm Cleary Gottlieb Steen & Hamilton, was commissioned by the FDIC following a Wall Street Journal investigation, which painted the agency’s picture as a degenerate boys’ club rife with cases of sexual harassment and misogynistic behavior toward women. women.

The law firm’s investigation described the culture as “patriarchal, insular and risk-averse” and revealed more than 500 cases of individuals experiencing misconduct in the workplace.

“We have completed our review and found that for too many employees and for too long, the FDIC has failed to provide a workplace that is safe from sexual harassment, discrimination, and other interpersonal misconduct,” the document’s executive summary says. reportpublished on Tuesday, read it.

The report concluded that the toxic culture “contributed to the conditions that allowed this workplace misconduct to occur and persist, and that a widespread fear of retaliation, as well as a lack of clarity and credibility around internal reporting channels, has led to underreporting of workplace misconduct over the years.

The report did not directly blame Gruenberg for sexual harassment, but revealed a staff that often feared the president would “lose his temper and interact with staff in a demeaning and inappropriate manner.” It also stated that the administration’s responses to allegations of misconduct “were insufficient and ineffective.”

“While we do not consider Chairman Gruenberg’s conduct to be the root cause of sexual harassment and discrimination at the agency or the long-standing workplace culture problems identified in our review, we recognize that, as several FDIC officials have put it in speaking about President Gruenberg, culture ‘starts at the top,’” the report said.

The report called for a “cultural transformation,” which it indicated could be difficult for Gruenberg as he has led the organization for ten of the past 13 years and worked at the agency for nearly 20 years. He also developed a reputation for becoming angry and losing his temper, the report said.

“These attributes may hinder his ability to establish trust in leading significant cultural change, and so may his apparent inability or unwillingness to recognize how others experience certain difficult interactions with him,” the report says.

“For these challenges to be overcome, there must be at least a genuine and sustained commitment to leading cultural change, accompanied by recognition and acknowledgment that such change is necessary because of past failures, including their own,” the report continued. .

Gruenberg, before the report was released, apologized to staff but did not indicate plans to resign. He said the investigation presented a “sober look” within the FDIC and that he accepted its conclusions and recommendations.

“To anyone who has experienced sexual harassment or other misconduct at the FDIC, I want to once again express how sorry I am,” Gruenberg wrote to staff. “I also want to apologize for any shortcomings on my part.”

“Hundreds of our colleagues have reported painful experiences of mistreatment and feelings of fear, anger and sadness,” Gruenberg wrote, pledging to implement the report’s recommendations.

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