Federal Deposit Insurance Corp. Chair Martin Gruenberg told lawmakers Tuesday that he was “personally disturbed and deeply troubled” by a recent Wall Street Journal report detailing what was described as a “toxic atmosphere” for the agency’s women employees.
He said Monday that attorneys from the law firm BakerHostetler would conduct an independent “top-to-bottom” evaluation of the allegations and the FDIC’s workplace within the next 90 days following the WSJ exposé on the regulator’s “sexualized, boys’ club environment.”
"Let me underscore, I have no higher priority than to ensure that all FDIC employees work in a safe environment where they feel valued and respected," Gruenberg told lawmakers Tuesday.
He also told them he hadn’t been “generally aware” of the allegations addressed in the WSJ piece.
The WSJ said it interviewed more than 100 current and former employees, including more than 20 women who quit, for a piece published Monday describing more than a decade of incidents that include pressure to drink excessively and unwanted sexual advances.
Kelsi Foutz, a senior risk management examiner who quit last year, told the WSJ that when she was a 21-year-old trainee in 2013, an examiner complained to her about his marriage and sex life over lunch. Foutz said he then told her, “Obviously if I walked into this office and you were naked, I’d f— you right here.”
“For the longest time, I didn’t have any perspective,” she told the WSJ, noting that she was shocked by his comments and never filed a complaint. “It was just normal. You deal with it.”
On Tuesday, Gruenberg told lawmakers, “It’s quite clear that we’ve had employees at the FDIC subjected to horrendous experiences that simply are unacceptable and can’t be tolerated.”
“It’s really going to be incumbent on the agency to take all actions necessary to come to grips with this and to address it effectively,” he said.
FDIC Vice Chairman Travis Hill and another member of the agency’s board of directors, Jonathan McKernan — both Republicans — released a joint statement Wednesday, calling for the independent review initiated by Gruenberg to “be effectively overseen by the Board and have the latitude and time needed to conduct a thorough, holistic review.”
“Ensuring a professional work environment throughout the agency, and providing transparency and accountability for employees and the public, must be top priorities for the Board,” Hill and McKernan said.
Following Gruenberg’s testimony Tuesday, an FDIC spokesperson told Banking Dive that “harassment in any form is contrary to the FDIC’s values and our deep commitment to fostering a diverse and inclusive workplace.”
“We have various training, reporting and oversight programs that endeavor to create a safe and equitable environment where all employees can feel valued and respected,” the spokesperson said. “When we identify misconduct, we investigate and take appropriate action.”
The spokesperson confirmed the FDIC had hired a third-party firm to conduct an independent review “to ensure we are living up to our values.”
Allegations within the WSJ report date back to 2010. Gruenberg has led the FDIC for the bulk of that time, from 2011 to 2018, and again since early last year.
Jelena McWilliams led the FDIC between 2018 and 2021, and two years into her tenure, the FDIC’s inspector general found that the regulator’s sexual harassment policies failed to prevent bad actors.
At the time, the FDIC said it would do better.
Lawmakers Tuesday challenged Gruenberg on the FDIC’s performance preventing such harassment.
Sen. Cynthia Lummis, R-WY, told Gruenberg that he “sure as heck better do something” about his agency’s culture, and challenged his plans for a third-party audit.
“Just looking at it or having a third party come in and evaluate, that is bureaucratic mumbo-jumbo for ‘We’re doing nothing and nothing is going to improve’,” she said.
Sen. John Kennedy, R-LA, asked the chairman if he’d ever engaged in sexual harassment himself. Gruenberg said he had not.
"You and your colleagues ought to hide your heads in a bag," Kennedy said. "This is no country for creepy old men."
