The embattled head of the Federal Deposit Insurance Corp. was grilled on Capitol Hill on Tuesday — one day after a bombshell investigation revealed the banking regulator has long been a toxic cesspool of misogyny.
FDIC Chairman Martin Gruenberg, who appeared at a Capitol Hill oversight hearing with other top financial regulators, told the Senate Banking Committee he was personally distraught after the Wall Street Journal’s report on Monday and committed to providing a safe working environment for staff.
That did not spare him the wrath of lawmakers after the Journal detailed incidents where senior bank examiners allegedly texted female subordinates photos of their penises and invited employees to a strip club.
“You and your colleagues ought to hide your heads in a bag,” Sen. John Kennedy (R-La.) railed. “This is no country for creepy old men.”
Fellow Republican Sen. Cynthia Lummis noted Gruenberg’s nearly 20-year tenure on the FDIC board, chastising him for what they said was his failure to act on a long-standing problem spotlighted by the FDIC’s inspector general.
Kennedy and Lummis cited examples of “disgusting behavior,” such as lewd remarks, wild partying, unsolicited nude photographs and pressure for sex with colleagues in return for professional advancement, prompting women to leave the agency.
“You’ve been there for 18 years at an agency that now has been exposed as having a hostile work environment towards women,” said Lummis, of Wyoming. “This is so far beyond the pale that I’m just gonna say you sure as heck better do something about it.”
Kennedy asked Gruenberg if he had personally ever engaged in sexual harassment, which the chairman denied.
Gruenberg, 70, noted that he was not chairman 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 conceded this had likely not changed workplace culture.
Gruenberg, who joined the FDIC in 2005. first stepped into the chairman role after being nominated by President Barack Obama in 2011.
After his five-year term expired, he was brought back after Joe Biden was elected in 2020.
“It’s quite clear that we’ve had employees at the FDIC subjected to experiences that simply are unacceptable and can’t be tolerated,” Gruenberg told the committee.
“It’s really going to be incumbent on the agency to take all actions necessary to come to grips with this and to address it effectively.”
He has reportedly tapped independent law firm BakerHostetler to lead a “comprehensive review.”
Gruenberg told the Senate committee that he hoped BakerHostetler’s review would take 90 days or less.
The Post has sought comment from BakerHostetler.
When asked by Sen. Jon Tester (D, Mont.) if the “very damning” allegations warranted firings, Gruenberg said: “You really have to look at 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 100-plus interviews with past and present FDIC employees — including 20 women who quit — legal filings, union grievances, Equal Employment Opportunity Commission complaints, emails, text messages and other internal documents.
Female examiners described the FDIC to the Journal as a sexualized, boys’ club environment where women’s appearances were talked about openly.
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In one shocking example that illustrated what the FDIC’s male-dominated workplace looked like, a female former FDIC employee recalled her male colleagues saying women needed to use sex to get ahead — as they stared at her.
The grilling threatened to overshadow testimony slated for Wednesday on proposed changes to bank capital regulations that have drawn fierce opposition from the industry.
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 supervision.
With Post wires
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