Catherine Rusoff
The Federal Deposit Insurance Corp., a government agency that protects bank customers from losing their deposits, fostered a toxic workplace filled with harassment and intimidation that primarily targeted women or people from underrepresented groups, according to a study. new report.
The findings about the FDIC’s workplace culture come after the Wall Street Journal published a November investigation that alleged male employees of the agency engaged in harassment, such as sending obscene photos to female employees, but still kept their jobs.
The 234-page report, released Tuesday by law firm Cleary Gottlieb Steen & Hamilton, is based on accounts from more than 500 employees who reported misconduct they encountered at the agency. Their accounts describe a workplace that is “patriarchal, insular and risk-averse” and that failed to deal effectively with harassment, with the findings noting that disciplinary actions were rare after workers raised complaints.
“[F]or too many employees and for too long, the FDIC has failed to provide a workplace safe from sexual harassment, discrimination, and other interpersonal misconduct,” the report states.
Employees harbored a fear of retaliation that dissuaded them from reporting misconduct, and the report noted that one worker said he was contacting the law firm using a VPN and someone else’s email out of fear that executives seniors knew about your complaint.
Among the misconduct described in the report:
- A worker said she feared for her physical safety after a colleague stalked her and continued to send her text messages, including texting partially nude women engaged in sexual acts, even after she filed a complaint about it.
- A supervisor at a local office routinely talked about his female employees’ breasts and legs, as well as their sex lives.
- A senior bank examiner unexpectedly sent a text message about his genitals to an examiner while she was on duty at a field office.
- Workers who are part of underrepresented groups were told by colleagues that they were “only hired” because they were members of those groups and that they were “token” employees hired to fulfill a quota.
FDIC Chairman Martin Gruenberg: “humiliating”
FDIC Chairman Martin Gruenberg was also criticized in the report, citing reports from employees that he sometimes lost his temper and treated workers in a “humiliating and inappropriate manner.”
Gruenberg, who has served on the FDIC board since 2005, was nominated for a second term as chairman by President Joe Biden in 2022.
“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 stated.
The report sparked calls for Gruenberg to resign, with House Financial Services Committee Chairman Patrick McHenry, a North Carolina Republican, saying on Tuesday that the findings detail “his inexcusable behavior and make clear that new leadership is needed at the FDIC.”
Asked for comment, the FDIC pointed to a statement posted on its website by Gruenberg in which he called the report “a sobering look at our workplace.”
“Hundreds of our colleagues have reported painful experiences of mistreatment and feelings of fear, anger and sadness,” he added. “I also want to apologize for any shortcomings on my part. As president, I am ultimately responsible for everything that happens at our agency, including our workplace culture.”
The report included recommendations to fix the FDIC’s culture, such as ensuring that employees who have experienced harassment and mistreatment are protected and appointing a new “Culture and Structure Transformation Monitor” to audit and report on structural changes at the agency.
