- The Federal Deposit Insurance coverage Company, or FDIC, has a “patriarchal” tradition, in response to an impartial report.
- The financial institution regulator took no motion on dozens of harassment complaints and moved wrongdoers round.
- Investigators raised doubts concerning the FDIC chairman’s capability to guide a cultural transformation.
A key US financial institution regulator has a “patriarchal” and “insular” tradition and is led by a boss with a popularity for a powerful mood, in response to an impartial report launched on Tuesday.
The 234-page abstract of the months-long investigation, led by the exterior legislation agency Cleary Gottlieb Steen & Hamilton, highlighted longstanding and up to date points on the Federal Deposit Insurance coverage Company, or FDIC. The report stated the FDIC has dismissed myriad harassment complaints and that wrongdoers are moved round internally or promoted.
The legislation agency’s report builds on a damning November story from The Wall Avenue Journal concerning the FDIC’s poisonous work tradition and comes because the FDIC faces a probe from the Home of Representatives.
Investigators stated they arrange a hotline in mid-January and acquired greater than 500 complaints — largely from present workers — about sexual harassment, discrimination, and different points. The FDIC has about 6,000 workers.
Tuesday’s report characterised the FDIC’s tradition as “‘misogynistic,’ ‘patriarchal,’ ‘insular,’ and ‘outdated’—a ‘good ol’ boys’ membership the place favoritism is frequent, wagons are circled round managers, and senior executives with well-known reputations for pursuing romantic relations with subordinates take pleasure in lengthy careers with none obvious consequence.”
Whereas the FDIC operates an anti-harassment program, the report stated it’s ineffective. Of the 92 complaints the FDIC acquired from 2015 via 2023, none resulted in additional severe self-discipline than a suspension — and solely two warranted suspensions, whereas 78 led to no self-discipline. Investigators stated many workers didn’t report points as a result of they feared retaliation.
Investigators spoke with one worker who stated she “feared deeply for her bodily security” after her colleague, who was stalking her, stored texting her sexually express messages, even after she made a criticism in opposition to him. Employees from underrepresented teams stated they have been instructed they have been “token” workers meant to fill quotas.
Tuesday’s investigation builds on a 2020 report from the FDIC’s inspector basic that discovered the regulator had not created an “satisfactory” sexual harassment reporting and prevention program. The sooner report additionally famous widespread worry of retaliation.
The impartial investigators spent 9 pages discussing FDIC chairman Martin Gruenberg’s conduct. Investigators wrote that they heard “credible studies” of Gruenberg’s mood, together with in conferences as not too long ago as Might 2023.
“Because the FDIC faces a disaster regarding its office tradition, Chairman Gruenberg’s popularity raises questions concerning the credibility of the management’s response to the disaster and the ‘ethical authority’ to guide a cultural transformation,” the report stated.
Gruenberg stated in an announcement on Tuesday to workers, launched to the general public, that he took duty for the company, together with its tradition. The 71-year-old Democrat has spent practically a decade within the function underneath a number of presidential administrations.
“I additionally wish to apologize for any shortcomings on my half,” he stated.
After the report’s publication, some lawmakers from each events referred to as for Gruenberg’s exit. His departure would put vice chairman Travis Hill, a Republican, within the interim seat.
On Tuesday, White Home press secretary Karine Jean-Pierre did not say whether or not the president nonetheless has confidence in Gruenberg.
She stated Gruenberg “apologized and has dedicated to the suggestions” from the legislation agency.
The FDIC didn’t instantly reply to a request for remark from Enterprise Insider despatched outdoors normal hours. The company has not issued an announcement past Gruenberg’s Tuesday message to workers.
