Martin Gruenberg, chairman of the Federal Deposit Insurance Corporation (FDIC), initiated a comprehensive review of sexual harassment complaints and took appropriate measures to address the allegations.
On November 13, the Wall Street Journal published a write-up about the allegations called "Strip Clubs, Lewd Photos and a Boozy Hotel: The Toxic Atmosphere at Bank Regulator FDIC."
Comprehensive Review for Sexual Harassment Complaints
The article published by the Wall Street Journal claimed that the former and current employees maintained a toxic and sexist environment, which was described as a 'sexualized boys' club.
Sen. Mike Rounds (R-S.D.) and Sen. Thom Tillis (R-S.C.) asked Gruenberg about the allegations in the article. However, Gruenberg was not informed about the claims in the report.
Furthermore, Sen. Rounds would expect more related reporting and asked if the FDC chief would handle the future news reports. Gruenberg said he could not answer as they still had to speak to the news organizations.
On November 14, Gruenberg said at a Senate Banking Committee hearing that he was personally disturbed and deeply troubled by the allegations.
The comprehensive review would be partnered with an independent third-party entity to address the nature of the issues. He said that the report would be completed in approximately 90 days.
Gruenberg noted that the management should ensure employees can freely submit complaints. "Let me underscore, I have no higher priority to ensure that all FDIC employees work in a safe environment where they feel valued and respected," he said.
Sen. John Kennedy (R-La.) said that old creepy men do not have a place in the country and the FDIC. In a letter passed to the inspector general, the Republicans asked for a briefing on the agency's workplace culture for this month.
Rep. Patrick McHenry (R-N.C.) wrote in the letter that the Committee on Financial Services took the allegations seriously and would address any misconduct.
He added that they also ensure the safety of the civil servants of their financial regulators so that they can perform their duties freely without having to experience harassment.
FDIC Toxic Culture
In the 2019 survey, Tyler Smith, FDIC's inspector general, reported that 8% of the 2,376 respondents suffered from sexual harassment between January 2015 and April 2019.
In a 2020 report, Smith said the employees acted like the characters in the 1985 film "Porky's Revenge!" and the 1978 movie "Animal House."
Smith reported sexual harassment complaints and submitted 15 agency policy recommendations. Gruenberg said the agency endorsed the 15 recommendations, but the environment remained unchanged.
Jelena McWilliams, chair of the FDIC in 2020, reported that there were adequate sexual harassment prevention programs. Gruenberg said the underlying issues made it difficult for the employees to apply the policies and procedures implemented to resolve the toxic culture.
Gruenberg would testify again on Wednesday, and lawmakers would question him like in the previous scheduled hearing.
