The Federal Deposit Insurance Corp. did not implement an effective sexual harassment program following a 2020 evaluation by the Office of the Inspector General, the watchdog announced Thursday.
Failure to do so has created an environment where employees don’t feel comfortable speaking up about sexual harassment for fear of retaliation, the watchdog said.
“[W]e found during our evaluation that the FDIC was not following the investigation procedures and had not updated the procedures since our last review; abandoned the tracking system and replaced it with one developed in-house which was no longer tracking the recommended data elements; and had not fully implemented the [Anti-Harassment Program] Oversight Plan,” the OIG said in its report. “Therefore, in these cases, the FDIC has regressed on the progress that was made in response to our prior recommendations.”
Of the 2,812 FDIC employees who responded to the OIG survey, 191, or 7%, said they’d been sexually harassed at the FDIC since April 20, 2019. But the FDIC told the OIG it only received 34 sexual harassment complaints in that time, indicating the underreporting of sexual harassment complaints at the FDIC.
In one example, management “was aware of harassing behavior that occurred over a number of years (since at least 2018) but did not initiate an investigation until employees reported they were contacted by the [Wall Street Journal] in June 2023.”
The watchdog also found at least four cases in which the Labor and Employee Relations Section; the Labor, Employment and Administration Section; and management were aware of sexual harassing behavior by supervisors, managers and at least one executive, but failed to conduct a sexual harassment investigation under the AHP.
“In three of the four examples, when we inquired why an investigation was not opened because there was no related supporting documentation, we were told there was no appetite for the investigations because ‘basically all the supervisory examiners’ were involved to some degree and it could open ‘Pandora’s Box and dig a bigger hole’ at the FDIC,” the OIG wrote.
Additionally, some of the individuals working on aspects of the Action Plan — the plan the FDIC developed in response to the Journal’s expose in 2023 — “have, or had, sexual harassment misconduct or retaliation allegations raised against them” which “undermines the overall effort to improve the culture, diminishes trust in leadership, and creates the impression that FDIC leadership will continue to tolerate inappropriate behavior despite the intent and content of the Action Plan.”
Following its evaluation, the OIG made 24 recommendations to the FDIC to address its findings, including that the chairman fully implement all provisions of the FDIC’s AHP.
“We agree with all of the recommendations in the report and are making substantial progress to address them,” an agency spokesperson told Banking Dive. “The FDIC is committed to implementing an effective sexual harassment prevention program.”
The FDIC plans to remediate its actions by March 31, 2025.
FDIC Chair Martin Gruenberg volunteered to resign following a third-party report on the agency’s culture. Commodity Futures Trading Commission commissioner Christy Goldsmith Romero has been nominated for the role and has testified in front of the Senate Banking Committee, but no vote for her confirmation has been scheduled.
