Federal Deposit Insurance Corporation Chair Martin Gruenberg testified Tuesday that he was unaware of the allegations of widespread sexual harassment and discrimination at the agency detailed in a Wall Street Journal investigation. But he didn\u2019t indicate he was unaware of the long-standing problematic culture the investigation described.
Gruenberg told the Senate Banking Committee he was \u201cpersonally disturbed and deeply troubled\u201d by the report, which alleged female workers received photos of their male superiors\u2019 genitalia, were told they needed to use sex to get ahead and were passed over for opportunities.
The Wall Street Journal investigation, based on interviews with more than 100 current and former FDIC employees, found that the agency rarely disciplined managers accused of sexual misconduct and other offenses.
Gruenberg, who said he read the report, told senators, \u201cIt\u2019s quite clear that we\u2019ve had employees at the FDIC subjected to horrendous experiences that simply are unacceptable and can\u2019t be tolerated.\u201d
When asked by Republican Senator Mike Rounds from South Dakota if he was aware of the allegations in the Journal\u2019s reporting before it was published on Monday, Gruenberg responded, \u201cAs a general matter, no, senator.\u201d
Republican Senator Thom Tillis from North Carolina followed up on Gruenberg\u2019s response, asking him if he should read anything into it.
\u201cI did not know about the individual cases,\u201d Gruenberg told him.
Shortly after the report was published, the FDIC announced it hired a law firm to conduct an independent investigation into the allegations.
Gruenberg, who was testifying before the Senate committee as part of a hearing meant to review new capital requirements for banks, said he hopes the findings from the review will be made public in \u201c90 days or less\u201d and vowed to be completely transparent throughout the process.
Senators also heard testimony from Michael Barr, Vice Chair for Supervision at the Federal Reserve; and Michael Hsu, Acting Comptroller at the Office of the Comptroller of the Currency, on a range of issues relating to banking regulation.
From U.S. Senate Committee On Banking, Housing, And Urban Affairs
Gruenberg joined the FDIC board of directors in 2005 and was sworn in as chair at the start of this year. In 2020, when Jelena McWilliams was Chair of the FDIC, the agency\u2019s inspector general released a report that found the FDIC did not have \u201can adequate sexual harassment prevention program\u201d in place and needed to improve its policies and procedures.
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.
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\u2019s report had been made public.
Two FDIC board members \u2014 Vice Chair Travis Hill and Director Jonathan McKernan \u2014 released a joint statement on Wednesday saying they and their fellow board members \u201chave an obligation to ensure that the FDIC holds all responsible employees and managers accountable for any inappropriate conduct.\u201d
The 2020 inspector general report made 15 recommendations to prevent and address sexual harassment at the agency, which Gruenberg said in his testimony on Tuesday had been implemented but acknowledged \u201cdidn\u2019t change the culture\u201d at the FDIC.
Gruenberg is set to face another round of grilling by lawmakers when he testifies before the House Financial Services Committee on Wednesday at another previously scheduled hearing.<\/p>\n\n\n\n