The Federal Deposit Insurance Corp. has fostered a workplace rife with sexual harassment, discrimination and other bad behavior “for far too many employees and for far too long,” according to findings from a third-party audit of the agency released Tuesday.

The findings were shared by Cleary Gottlieb, tapped in December following a report of such misconduct in The Wall Street Journal.

The review was based on testimony of 510 current and former FDIC employees, who communicated through a hotline email address, voice mailbox, website and other means. It was also based on 167 interviews of current and former FDIC employees, including people who report directly to Chair Martin Gruenberg and have varying levels of seniority; along with thousands of documents and certain electronic communications between employees.

Following the report’s release, Gruenberg thanked those who shared their experiences during the process, in a statement posted on the FDIC’s website. 

“To anyone who experienced sexual harassment or other misconduct at the FDIC, I again want to express how very sorry I am,” he said in the statement. “I also want to apologize for any shortcomings on my part. As Chairman, I am ultimately responsible for everything that happens at our agency, including our workplace culture.”

“I personally pledge to each of you that we will implement the recommendations contained in this report,” he said.

Below are eight takeaways the report:

1. Stalking, sexting and surrogacy.

One employee told Cleary Gottlieb that she feared for her safety after a colleague who had been stalking her “continued to text her even after she made a complaint against him for, among other things, sending unwelcome sexualized text messages that feature partially naked women engaging in sexual acts.”

Another woman employee, an examiner, said she received a picture of a senior examiner’s private parts out of the blue. Employees in the field office she was working from told her “she should stay away from him because he had a ‘reputation.’”

Another employee told auditors of a time her supervisor, while discussing the challenges he and his wife were having conceiving a child, looked directly at her and said, “I know I technically can’t ask you [to be a surrogate] since I’m your boss.”

2. Harassment wasn’t always sexual.

An employee with a disability was subject to mocking by his or her supervisor, including being called “Pirate McNasty,” individuals told auditors.

Employees from underrepresented groups said they were demoralized when told “they were ‘only hired’ because [of that status] and were ‘token’ employees hired to fill a quota.”

3. The FDIC’s 10 root issues.

The FDIC’s issues stem from 10 root causes, the law firm found: lack of accountability; fear of retaliation; insufficient prioritization of workplace culture; patriarchal, hierarchic and insular culture; risk aversion; lack of clear guidance; abuse of power dynamics; confusing and ineffective reporting channels; investigative processes lacking credibility; and insufficient recordkeeping.

4. Gruenberg ‘can get angry.’

Several instances of Gruenberg losing his temper at work were detailed by employees. At one meeting in May meant to discuss corporate governance-related regulations, Gruenberg instead focused on bank failures and, according to one participant at the meeting, “went on a rant” for 45 minutes, directing his “ire” at a particular individual, and also threatened that he could “fire” or “reassign” anybody he wanted. One participant described it as “45 minutes of vitriol” where no one else could say anything.

Following these reports, auditors reviewed Microsoft Teams messages that corroborated the account.

When asked by auditors about the meeting, Gruenberg recalled the meeting but said he did not recall getting upset or angry.

5. Cleary Gottlieb did not consider that anger a root issue.

Gruenberg’s attributes — including that he is allegedly “harsh” and “aggressive,” particular when receiving bad news  — “may hinder his ability to establish trust and confidence in leading meaningful culture change, and so too may his apparent inability or unwillingness to recognize how others experience certain difficult interactions with him,” Cleary Gottlieb found.

“For these challenges to be overcome, there must at least be a genuine and sustained commitment to lead a culture change, accompanied by a recognition and acknowledgment that such change is necessary because of failings of the past, including his own,” according to the review.

In November, he took responsibility for setting the tone of the agency in a video to staff.

6. Years of the ‘old boy’s club.’

The Office of Personnel Management conducts its Federal Employee Viewpoint Survey annually to gauge the experience of federal agency employees.

In 2016, one FDIC employee commented, “End the ‘good old boy’ network so that discrimination can end.” That same year, another employee commented that the “old boys” network at the FDIC needed to be fixed.

“These people are entrenched and oppose any productive change…These people are not only tolerated, but encouraged by senior management, and they frequently resort to intransigence or bullying to get their way,” the employee wrote, as quoted in the Cleary Gottlieb report.

The toxicity persists, according to the firm’s audit.

“This toxic ‘boys club culture’ fosters an environment in which subtle and not-so-subtle forms of gender and other biases are permitted,” auditors wrote. “For women and individuals from underrepresented groups, this includes gender and race-based name calling, difficulty being promoted after having children, a lack of respect for women, pressure to participate in offensive jokes to avoid ‘being considered a prude,’ experiencing different accountability standards, and their opinions not being heard.”

7. ‘Useless’ to report bad behavior.

“The threat of retribution and payback is real, supervisors rule by fear in the FDIC. Nobody trusts those in charge, and even though this is not getting into the hands of senior execs, I’m using a VPN and someone else’s cell phone to write this,” one employee wrote to Cleary Gottlieb’s hotline. “I still fear that talking will come back to haunt me.”

That this much fear exists, the auditor noted, “indicates that there are likely many others who have not reported and remain fearful of reporting misconduct they have experienced at the FDIC.”

Fears of reporting workplace issues to higher-ups outside of the audit, employees told Cleary Gottlieb, ranged from being made to travel or travel more often, receiving bad evaluations, getting reassigned, having bonuses withheld, being held from promotion, or being fired.

Employees also believed misconduct complaints weren’t kept confidential, exacerbating fears of retaliation.

One FDIC employee who informally complained, for example, recalled being told by her manager to “remember who is giving you feedback.”

Other employees reported that those who reported workplace misconduct were then informally mocked, and that filing a complaint was seen as disloyal.

8. FDIC leadership has its work cut out for it.

Auditors gave the FDIC several recommendations on how to address its rampant issues.

These include protecting victims of sexual harassment, discrimination, bullying or other interpersonal misconduct, including with mental health resources; enacting a culture and structure transformation and holding leadership accountable; and modifying and enhancing policy to further prevent misconduct.

Additionally, auditors recommend the FDIC enhance its workplace conduct and leadership programs; improve its structures and procedures for overseeing its anti-harassment policy; and provide greater transparency and timeliness into harassment and discrimination investigations.

But all is not lost.

“By implementing the recommendations — with the commitment and understanding that change is necessary — the FDIC will emerge even stronger and continue to serve the public in its noble mission,” auditors concluded.