US FDIC Chair Announces Resignation...Accountability for Workplace Sexual Harassment and Bullying

Martin Gruenberg, chairman of the U.S. Federal Deposit Insurance Corporation (FDIC), is taking responsibility for the widespread sexual harassment and workplace bullying issues within the organization and is ultimately stepping down from his position.

[Image source=AP Yonhap News]

The Wall Street Journal (WSJ) reported on the 20th (local time), citing an email Gruenberg sent to employees. He stated, "I have considered it an honor to work at the FDIC since August 2005," and added, "Given recent circumstances, I am prepared to step down once a successor is confirmed." He also confirmed that he will continue to fulfill his responsibilities, including "changing the workplace culture at the FDIC," until a new leader is appointed.

This announcement came just hours after the Senate Banking Committee urged the FDIC to establish new leadership due to sexual harassment and related issues. The White House confirmed that President Joe Biden will soon nominate a new FDIC chairman. Deputy Press Secretary Sam Michelle said, "President Biden expects the administration to reflect values of dignity and integrity and to protect the rights and dignity of all employees." However, WSJ noted that confirming a new chairman during an election year could be challenging for Congress, pointing out that finding a candidate who is neither too moderate nor too progressive will not be easy.

Previously, the FDIC came under scrutiny as widespread sexual harassment, bullying, and discrimination within the workplace were revealed. Reported cases from last year included a male manager gathering employees, including female staff, at strip clubs, and a senior male investigator sending explicit photos of his genitals to female colleagues via phone messages. A culture encouraging excessive drinking and forced alcohol consumption was also identified. As a result, many female employees resigned, while the male employees involved in the controversies continued to work at the FDIC, which was also criticized as problematic.

Subsequently, the law firm Cleary Gottlieb, commissioned by the FDIC, released a 234-page report earlier this month criticizing the FDIC management’s response to these illegal acts of sexual harassment and bullying as insufficient and ineffective. Among the investigated cases included in the report, some serious violations were confirmed. For example, one employee reported being sexually harassed for six years by a senior examiner who sent obscene messages and photos containing profanity unilaterally.

Additionally, the report included confirmation of WSJ’s earlier coverage that many employees, including management, had experienced "extremely difficult and anxious" interactions with Chairman Gruenberg, perceiving him as "an angry person unable to control his temper," the media outlet added.

At a congressional hearing last week attended by Gruenberg, he faced criticism from lawmakers of both parties. Democratic Representative Ayanna Pressley remarked, "I have no confidence that Chairman Gruenberg can demonstrate leadership." Republican Senator John Kennedy said, "You should be ashamed of yourself."

WSJ reported that many FDIC employees are currently angry that more measures have not been taken in response to sexual harassment and workplace bullying, and that campaigns urging Gruenberg’s resignation are underway through board emails and congressional support. Republican Representative Sheila Bair, a former FDIC chair, stated, "The FDIC desperately needs change," and called for his immediate resignation once a new chairman is confirmed. The FDIC is responsible for maintaining and supervising the stability of the U.S. banking system and resolving failing bank issues, with fewer than 6,000 employees.