On 11/14/2023, The head of the U.S. Federal Deposit Insurance Corporation faced outraged criticism from lawmakers following a media report that cited pervasive allegations of sexual harassment at his agency. FDIC Chairman Martin Gruenberg appeared at Capitol Hill oversight hearing with other top financial regulators. Gruenberg said he found the matter was “deeply disturbing” and said the FDIC would employ all its resources to review internal practices “and how we can most effectively address it.”
The article cited misconduct occurring between 2010 and 2022 in cities such as San Francisco, Dallas, Seattle and Denver, as well as interviews with “more than 20 women” who had quit. Senator John Kennedy noted Gruenberg’s nearly 20-year tenure on the FDIC board, chastising him for what they said was his failure to act on a long-standing problem spotlighted by the FDIC’s inspector general.
Kennedy asked Gruenberg if he had personally ever engaged in sexual harassment, which the chairman denied, (but on 11/16/20223 Kennedy wrote “You later told the panel that you were, in fact, investigated for inappropriate behavior in 2008.”) Kennedy cited examples of “disgusting behavior,” such as lewd remarks, wild partying, unsolicited nude photographs and pressure for sex with colleagues in return for professional advancement, prompting women to leave the agency.
“You and your colleagues ought to hide your heads in a bag,” said Kennedy. “This is no country for creepy old men.”
Gruenberg noted that he was not chairman at the time of the inspector general’s report in 2020 and said the FDIC had addressed all of that report’s recommendations. But he conceded this had likely not changed workplace culture.
The senator also asked Gruenberg to answer questions about what, if any, actions he has taken to improve the FDIC’s work environment during each of his tenures as chair of the agency. The FDIC’s performance has come under harsh scrutiny following a costly series of large bank failures earlier this year, two of which occurred during the agency’s supervision.
On 11/16/2023, Sen. John Kennedy (R-La.), a member of the Senate Banking Committee, urged Federal Deposit Insurance Corporation (FDIC) Chair Martin Gruenberg to step down after reports documenting the FDIC has tolerated a toxic work environment under his tenure. Kennedy questioned Gruenberg at a Senate Banking Committee Hearing on Nov. 14, 2023 about reports indicating that the chairman has failed to address sexual harassment and other inappropriate behavior at the FDIC.
“New allegations surfaced this week suggesting that the FDIC is tolerating an inappropriate and toxic workplace atmosphere under your leadership. Given the vital role the FDIC plays in upholding America’s financial and economic systems, it is imperative that its leader be one with irreproachable demeanor and character. These troubling allegations call into question your ability to continue leading and present a troubling picture of your tenure,” Kennedy wrote.
“Further, in your testimony at the House Financial Services Committee on Wednesday, November 15, 2023, you stated that you have not been investigated for inappropriate behavior. You later told the panel that you were, in fact, investigated for inappropriate behavior in 2008,” the senator continued.
“According to your statement at the Senate Banking Committee on Tuesday, November 14, 2023, you have not personally acted to rectify these allegations throughout your time as chair or acting chair at the FDIC in order to make the FDIC an appropriate workplace for all individuals. As a result of these troubling reports and your apparent unwillingness to address them, I call for your resignation so that a new chair can restore the professional culture at the FDIC that the American people expect from its institutions,” Kennedy concluded.
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Kennedy to FDIC Chairman Resign: You ought to hide your heads in a bag, this is no country for creepy old men