A special committee overseeing a review of the Federal Deposit Insurance Corp.’s workplace culture appointed law firm Cleary Gottlieb Steen & Hamilton to investigate allegations of sexual harassment and misconduct by former FDIC employees, detailed in reports last month by The Wall Street Journal.
In the days following the reports, FDIC Chair Martin Gruenberg said the agency had hired the law firm BakerHostetler to investigate the allegations.
Cleary Gottlieb replaces BakerHostetler in the investigation. BakerHostetler did not respond to a request for comment from Reuters.
Cleary Gottlieb will "conduct an independent review into allegations of sexual harassment and interpersonal misconduct, as well as issues relating to the workplace culture at the FDIC," the agency said Monday. The team at Cleary Gottlieb will be led by Joon H. Kim, the former acting U.S. Attorney for the Southern District of New York; Jennifer Kennedy Park; and Abena Mainoo.
The Cleary Gottlieb team previously handled, among others, an investigation into workplace misconduct and harmful work culture involving former New York Governor Andrew Cuomo and the New York State Executive Chamber.
"The Special Committee is committed to an independent and thorough review," Michael Hsu, the FDIC panel’s co-chair and the acting chief of the Office of the Comptroller of the Currency, said in a statement. "There is no question that the Cleary Gottlieb team has the experience and the expertise to lead this review."
The committee encouraged past and present FDIC staff who witnessed or experienced any sexual harassment or hostile environment at the FDIC to share their experiences with the Cleary Gottlieb team. The independent counsel has also established a telephone hotline and email address to gather information related to the review.
Gruenberg “will play no role in overseeing the review,” he said last month.
In the days after the scandal broke, Gruenberg took responsibility and apologized to staff in a video.
“I bear responsibility for setting the tone for our culture,” Gruenberg said. “I want to assure you that I’m committed to addressing these issues, including my own shortcomings.”
That hasn’t slowed a steady stream of requests from lawmakers that Gruenberg resign. Outcry against the FDIC chief began in earnest when, in front of the House Financial Services Committee, Rep. Patrick McHenry, R-NC, asked Gruenberg if he had ever been investigated for misconduct. Gruenberg said he had not but later acknowledged he was investigated in 2008 but that the complaint was dropped.
Five Senate Republicans pushed Thursday for Gruenberg to resign.
“The culture of an organization is set from the top. As such, we have significant concerns with your ability to continue leading the FDIC as it seeks to clean up its public image and provide much-needed changes to its workplace culture to return the FDIC to working order,” wrote the senators, led by Tim Scott, R-SC.
In a 13-page action plan FDIC staff received this month, Gruenberg noted the review would be complete by February, according to The Wall Street Journal. However, Cleary Gottlieb did not respond to a request for comment from that publication.
