Bipartisan Group Of Lawmakers Demands Resignation Of Agency Head

Few people give the Federal Deposit Insurance Corporation much thought. But this federal agency plays a central role in the nation’s banking system, overseeing, among other things, the insurance program that protects depositors money if and when banks go bust.

The FDIC also has a major, non-banking problem on its hands. A rotten internal culture that would make disgraced Hollywood mogul Harvey Weinstein jealous. As an independent report on the FDIC makes abundantly clear, the rot starts at the top. After listing examples of sexual harassment, bullying, retaliation, and other conduct that in the private sector would have resulted in firings and lawsuits, the report notes:

These incidents, and many others like them, did not occur in a vacuum. They arose within a workplace culture that is “misogynistic,” “patriarchal,” “insular,” and “outdated”—a “good ol’ boys” club where favoritism is common, wagons are circled around managers, and senior executives with well-known reputations for pursuing romantic relations with subordinates enjoy long careers without any apparent consequence. Many reported that in this culture, wrongdoers are not held to account for their misconduct. Instead, they are just moved around to other offices and roles. As one executive at the FDIC put it, the FDIC’s response to interpersonal misconduct is “pay, promote, or move them.”9 In fact, according to the FDIC’s own public reporting, of the ninety-two harassment complaints made through its Anti-Harassment Program in the nine year period from 2015 to 2023, not a single one resulted in removal, reductions in grade or pay, or any discipline more serious than a suspension.10 Of those ninety-two, just two resulted in suspensions, two in letters of reprimand, and twelve in counseling, warnings, or trainings. The rest led to no discipline at all.

The report also has strong words for long-time FDIC chairman Martin Gruenberg. After noting that Gruenberg as a “reputation for having a temper,” and offering examples of how that temper made him the classic bullying boss, the report says:

…we do recognize that, as a number of FDIC employees put it in talking about Chairman Gruenberg, culture “starts at the top.” We also note that, having been with the FDIC for almost 20 years, and having served as its head for ten of the last thirteen years, leading cultural transformation at an agency that he has led for so long presents unique challenges for Chairman Gruenberg, as do the incidents of—and resulting reputation for— losing his temper and expressing anger with staff. These attributes may hinder his ability to establish trust and confidence in leading meaningful culture change, and so too may his apparent inability or unwillingness to recognize how others experience certain difficult interactions with him. For these challenges to be overcome, there must at least be a genuine and sustained commitment to lead a culture change, accompanied by a recognition and acknowledgement that such change is necessary because of failings of the past, including his own.

Good luck with that. Gruenberg says he can’t recall getting upset, irate, or otherwise enraged at staffers….though his conduct had been investigated on those grounds before.

The only way to kickstart the changes is for Gruenberg to resign, which a bipartisan chorus of lawmakers are calling for. Once the rot is scraped out of the executive suite, a new team can start the long and difficult task of cleaning up the cultural swamp that Gruenberg & Co. allowed to thrive for so many years.

The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.

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Norman Leahy has written about national and Virginia politics for more than 30 years with outlets ranging from The Washington Post to BearingDrift.com. A consulting writer, editor, recovering think tank executive and campaign operative, Norman lives in Virginia.

Picture of Norman Leahy

Norman Leahy

Norman Leahy has written about national and Virginia politics for more than 30 years with outlets ranging from The Washington Post to BearingDrift.com. A consulting writer, editor, recovering think tank executive and campaign operative, Norman lives in Virginia.

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