Kennedy to FDIC Chair Gruenberg: 'Have You Ever Sexually Harassed an Employee?' 'No Sir.' 'Apparently You're the Only One' (November 2023)

Sen. John Kennedy, R-La., asked the head of the Federal Deposit Insurance Corp. a blunt question. “Have you ever sexually harassed an employee at the FDIC?” Kennedy asked FDIC Chairman Martin Gruenberg, the Deseret News reported [1].

“No sir,” Gruenberg answered [1].

“Apparently you’re the only one,” Kennedy replied [1].

The video above shows Kennedy questioning Gruenberg in November 2023. Quotes are from the Deseret News, CNN via KTVZ and the Associated Press via WPTV [1][2][3].

”Personally Disturbed and Deeply Troubled”

Gruenberg testified before the Senate Banking Committee the day after a Wall Street Journal investigation of the agency was published. CNN reported that the Journal’s report was “based on interviews with more than 100 current and former FDIC employees” and “found that the agency rarely disciplined managers accused of sexual misconduct and other offenses.” [2]

“Gruenberg told senators he was ‘personally disturbed and deeply troubled’ by the report, which alleged female workers received photos of their male superiors’ genitalia, were told they needed to use sex to get ahead and were passed over for opportunities,” CNN reported [2].

“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,” Gruenberg told senators [2].

”As a General Matter, No, Senator”

Republican senators pressed him on what he knew. “When asked by Republican Senator Mike Rounds from South Dakota if he was aware of the allegations in the Journal’s initial reporting before it was published on Monday, Gruenberg responded, ‘As a general matter, no, senator,’” CNN reported [2].

“Republican Senator Thom Tillis from North Carolina followed up on Gruenberg’s response, asking him if he should read anything into it. ‘I did not know about the individual cases,’ Gruenberg told him,” CNN reported [2].

“Shortly after the report was published, the FDIC announced it hired a law firm to conduct an independent investigation into the allegations,” CNN reported. “Gruenberg said Tuesday he hopes the findings from the review will be made public in ‘90 days or less’ and vowed to be completely transparent throughout the process.” [2]

“Your Conflicting Testimony”

The next day, before the House Financial Services Committee, Gruenberg’s story shifted. “Gruenberg denied having ever been investigated for ‘inappropriate conduct,’” CNN reported. “But after the House committee returned from a recess Wednesday afternoon, Gruenberg revealed he was the subject of an investigation in 2008, when he was Vice Chair at the FDIC.” [2]

House Financial Services Chairman Patrick McHenry launched an investigation. “Your conflicting testimony in this week’s hearing before the Committee was alarming,” McHenry wrote, joined by two other high-ranking Republicans. “The viability of your leadership is in question.” [2]

Warned in 2020

The problems were not new. In 2020, CNN reported, the agency’s inspector general “released a report that found the FDIC did not have ‘an adequate sexual harassment prevention program’ in place and needed to improve its policies and procedures.” [2]

“The report also referenced a 2019 survey conducted by the inspector general that found 8% of the 2,376 respondents experienced sexual harassment between January 2015 to April 2019,” CNN reported [2].

“Gruenberg told senators it was the responsibility of prior FDIC chairs to do something about it, even though he was the Acting Chair beginning in February 2022, after the inspector general’s report had been made public,” CNN reported [2].

By the Numbers

100+: current and former FDIC employees the Journal interviewed, per CNN [2].
8%: of 2,376 survey respondents who reported sexual harassment, per the inspector general [2].
2008: the year Gruenberg was investigated as vice chair, which he disclosed after a recess [2].
500+: employee complaints behind the outside law firm’s 2024 report, per the AP [3].
Nearly 20: years Gruenberg held leadership posts at the FDIC, per the AP [3].

What Happened Next

The White House said Gruenberg would step down. “The White House said Monday that the chairman of the Federal Deposit Insurance Corporation will step down, a departure that follows the release earlier this month of a damning report about the agency’s toxic workplace culture,” the AP reported on May 20, 2024 [3].

“The report released Tuesday by law firm Cleary Gottlieb Steen & Hamilton cites incidents of stalking, harassment, homophobia and other violations of employment regulations, based on more than 500 complaints from employees,” the AP reported [3].

“Gruenberg was grilled for two days last week on Capitol Hill in hearings largely focused on the FDIC’s workplace culture and the failures disclosed in the report prepared by an outside law firm,” the AP reported [3].

Sen. Sherrod Brown, the committee’s top Democrat, called for Gruenberg to go. “After chairing last week’s hearing, reviewing the independent report, and receiving further outreach from FDIC employees to the Banking and Housing Committee, I am left with one conclusion: there must be fundamental changes at the FDIC,” Brown said [3].

“His long tenure at the agency made him largely responsible for the agency’s toxic work environment, according to the independent report outlining the problems at the agency,” the AP reported [3].

“Republicans have been calling for Gruenberg’s ouster for some time and criticized the White House for not calling for his immediate departure,” the AP reported. “Before Monday, no Democrats had called for Gruenberg’s ouster.” [3]

For Kennedy pressing Biden’s judicial nominees, see HYGO News’ page on Sept. 6, 2023. For Kennedy and an economist on taxes and moving to Florida, see the page on April 18, 2023.