Washington D.C. – An external examination of the Federal Deposit Insurance Corporation (FDIC) uncovered a toxic work environment rife with sexual harassment, discrimination, and other forms of misconduct that were largely ignored by the agency’s leadership. The investigation, prompted by a damning report in the Wall Street Journal last fall, revealed a culture of strip club visits, lewd messages, heavy drinking, and bullying at the organization tasked with protecting Americans’ bank deposits.
The review highlighted a “patriarchal, insular, and risk-averse culture” at the FDIC that enabled such behavior to persist, with a widespread fear of retaliation discouraging employees from reporting complaints. FDIC Chairman Martin Gruenberg issued an apology to victims of harassment and vowed to implement the recommendations outlined in the external review, including an overhaul of the agency’s culture, better protection for victims, and increased accountability for leadership.
Questions have arisen regarding Gruenberg’s ability to lead the necessary changes, given his long tenure at the FDIC, including a decade as chairman and reports of a volatile temper. Representative Patrick McHenry, chair of the House Financial Services Committee, called for Gruenberg’s resignation in light of the report’s findings, emphasizing the need for new leadership at the helm of the agency.
More than 500 FDIC employees came forward to report misconduct within the organization, with the review noting that wrongdoers were often rewarded with promotions or transfers rather than facing disciplinary action. The report characterized the FDIC’s response to misconduct as “pay, promote, or move them,” highlighting systemic issues that need to be addressed to foster a safer and more respectful workplace environment.