FDIC Chairman to Resign After Workplace Culture Accusations

UPDATE May 20, 2024 5:55 PM CDT

The chairman of the Federal Deposit Insurance Corp. announced Monday that he's leaving in response to an independent review's findings that the independent agency is rife with sexual harassment and discrimination. Martin Gruenberg said he'll resign once a successor is confirmed, CNBC reports, and a White House official said President Biden will select a nominee quickly. The report noted that Gruenberg's behavior isn't the cause of the widespread misconduct, but employees had told them the toxic culture "starts at the top."

May 8, 2024 2:30 AM CDT

A massive, newly released report on the workplace culture at the Federal Deposit Insurance Corp. includes major accusations against the government agency. More than 500 employees reported misconduct at the FDIC ranging from sexual harassment and stalking to homophobia, bullying, and racial discrimination. The entire 234-page report can be viewed here. The independent review, carried out by the law firm Cleary Gottlieb Steen & Hamilton, was ordered by the FDIC's board after an investigation by the Wall Street Journal last year found a toxic work environment at the bank regulator. Some of the allegations include:

• Stalking: One woman says a more senior employee sexually harassed her for six years with stalking behavior that continued even after she filed a complaint about him, causing her to fear for her safety. She says his text messages frequently included images of semi-nude women participating in sex acts, with messages like "get naked b----."

• Sexual harassment and assault: Alleged behavior included inappropriate comments about female employees' bodies and supervisors' sex lives, propositioning, groping, and texting of explicit photos. Multiple people reported sexual harassment at the hotel where trainings took place, and two people say they were sexually assaulted there.
• Sexism: Women who are part of underrepresented groups say they were openly referred to as "token" employees who were only hired to meet quotas. One woman says she was told she should leave the work force after becoming a mother.
• Racism: A Hispanic employee says a colleague told them to "prove that they were American" by reciting the pledge of allegiance; another says that when diversity initiatives were organized, a colleague asked when there would be a "white man's day/month."
• Problems from the top: Many people accused Chairman Martin Gruenberg of fostering a toxic environment; they say he has anger issues, can't control his temper, and treats employees poorly. He apologized in a statement for any "shortcomings." Some lawmakers on both sides of the aisle said he should resign. As a presidential nominee, only the president can force him to leave the position.

The agency, which is also facing other external investigations, says it is committed to instituting the report's recommendations to address the issues going forward, but some lawmakers say those recommendations don't go far enough in terms of consequences for misconduct. (More FDIC stories.)