The embattled head of the Federal Deposit Insurance Corporation was questioned on Capitol Hill on Tuesday, a day after an explosive investigation revealed that the banking regulator has long been a toxic cesspool of misogyny.
FDIC Chairman Martin Gruenberg, appearing at an oversight hearing on Capitol Hill with other top financial regulators, told the Senate Banking Committee that he was personally dismayed by Monday’s Wall Street Journal report and pledged to provide a safe work environment for staff.
That didn’t spare him the ire of lawmakers after the Journal detailed incidents in which high-level bank examiners allegedly texted female subordinates photos of their penises and invited employees to a strip club.
“You and your colleagues should put your heads in a bag,” criticized Sen. John Kennedy (R-La.). “This is not a country for creepy old men.”
Republican Sen. Cynthia Lummis highlighted Gruenberg’s nearly 20-year tenure on the FDIC board and chastised him for what they said was his failure to act on a long-standing problem highlighted by the FDIC inspector general.
Kennedy and Lummis cited examples of “disgusting behavior,” such as lewd comments, wild partying, unsolicited nude photography, and pressure to have sex with colleagues in exchange for career advancement, which led to women leaving the agency.
“You’ve been there for 18 years at an agency that has now been exposed for having a hostile work environment toward women,” said Lummis, of Wyoming. “This is so out of character that I’m just going to say you better do something about it.”
Kennedy asked Gruenberg if he had ever personally participated in sexual harassment, which the president denied.
Gruenberg, 70, noted that he was not president 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 admitted that this probably had not changed the work culture.
Gruenberg, who joined the FDIC in 2005, first assumed the role of chairman after being nominated by President Barack Obama in 2011.
After his five-year term expired, he returned after Joe Biden was elected in 2020.
“It is quite clear that we have had FDIC employees subjected to experiences that are simply unacceptable and cannot be tolerated,” Gruenberg told the committee.
“It will really be up to the agency to take all necessary steps to confront this and address it effectively.”
It has reportedly turned to independent law firm BakerHostetler to conduct a “comprehensive review.”
Gruenberg told the Senate committee that he expected the BakerHostetler review to take 90 days or less.
The Post has sought comment from BakerHostetler.
When asked by Sen. Jon Tester (D-Montana) if the “very damning” allegations justified firings, Gruenberg said, “You really have to look at the individual cases,” according to The Journal.
“It depends on the facts of the case and the law.”
The Journal’s investigation was reportedly the result of more than 100 interviews with past and present FDIC employees (including 20 women who resigned), legal filings, union complaints, Equal Opportunity Commission complaints in the Employment, emails, text messages and other internal documents.
Examiners described the FDIC to the Journal as a sexualized boys’ club environment where women’s appearance was openly discussed.
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In a shocking example that illustrated what the FDIC’s male-dominated workplace was like, a former FDIC employee recalled her male colleagues saying that women needed to use sex to get ahead, while staring at her.
The questioning threatened to overshadow testimony scheduled for Wednesday on proposed changes to bank capital regulations that have generated fierce industry opposition.
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 oversight.
With post cables
