Top Democrat Criticizes Report on Sexual Harassment at FDIC Amid Calls for Martin Gruenberg to Resign

Congresswoman Maxine Waters (D-Calif.), the ranking Democrat on the House Financial Services Committee, has criticized a newly published investigation into claims of sexual harassment and misconduct at the Federal Deposit Insurance Corporation (FDIC).

In a press release on Thursday, Ms. Waters called the probe by law firm Cleary Gottlieb Steen & Hamilton into workplace culture at the agency “troubling.”

However, Ms. Waters claimed the report places the focus for “tone at the top” solely on the FDIC’s current leader, Martin Gruenberg, a Democrat, while ignoring the activities of its former Republican chairs.

“Unfortunately, the Cleary report diverts attention from the longstanding institutional challenges confronting the FDIC by spotlighting allegations of temperament raised against only one of three individuals who held the Chairmanship of the FDIC during the matters addressed in its review,” the lawmaker wrote.

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Under Ms. McWilliams’s leadership, “employee favorability ratings of the agency declined,” Ms. Waters said.

In 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.”

Report ‘Affirms’ Need for Change

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

“Similarly, investigators informed Committee staff that allegations of temperament were also raised against former Chair Sheila Bair but those were not included in the report,” Ms. Waters said.

“By narrowly focusing the report on the current Chair, the authors of the report do a disservice to FDIC employees and impede the public understanding of the depth of the problems at the FDIC,” Ms. Waters continued.

The congresswoman acknowledged that the latest report “affirms” that the FDIC needs to roll out changes to its policies and programs and improve its workplace culture, “particularly in the area of anti-sexual harassment.”

“All employees deserve a work environment free from abuse and the FDIC under Democratic and Republican leadership has failed to provide that,” she wrote. “Chairman Gruenberg must work diligently to fix what is broken at the FDIC and to restore the trust of employees in his leadership and in the organization,” the lawmaker added.

“The bottom line is Chair Gruenberg and the FDIC Board must promptly implement policies and programs that ensure there is a professional environment where everyone feels safe and protected. To restore trust, FDIC must continue implementing the action plan I requested of Chair Gruenberg last year, along with the recommendations laid out in the report. This must be the FDIC leadership’s top priority.”

The investigation was conducted at the request of the bank regulator. According to the more than 200-page report, over 500 individuals reported experiences of “sexual harassment, discrimination, and other interpersonal misconduct” that they have suffered at the FDIC.

“Those who reported expressed fear, sadness, and anger at what they had to endure,” the report stated. “Many had never reported their experiences to anyone before, while others who had reported internally were left disappointed by the FDIC’s response.”

While the law firm noted that it does not find Mr. Gruenberg’s conduct to be a “root cause” of sexual harassment and discrimination at the agency or the long-standing workplace culture issues identified in its review, it does recognize that, “as a number of FDIC employees put it in talking about Chairman Gruenberg, culture ‘starts at the top.’”

Mr. Gruenberg, who has been a member of the FDIC for over 20 years, has since apologized for overseeing a hostile environment, adding that the report presented “a sobering look inside” the FDIC workplace.

He is set to appear at a hearing before lawmakers from the House of Representatives Financial Services Committee and the Senate Banking Committee later this month.

The Epoch Times has contacted the FDIC and former chairs Jelena McWilliams and Sheila Bair for comment.

Andrew Moran contributed to this report.