The Federal Deposit Insurance Corp. must make sweeping changes to combat widespread sexual harassment and other misconduct, according to an independent report commissioned by the top banking regulator, according to two sources familiar with the matter.
More than 500 people have reported misconduct at the agency, most of them current FDIC employees, according to people who have seen the report, written by the Cleary Gottlieb law firm after an investigation by five months.
Cleary Gottlieb also found evidence of widespread retaliation against employees who complained about a supervisor’s misconduct, and little evidence that such retaliation was addressed, the sources said.
They declined to be identified discussing the report ahead of its scheduled release later Tuesday.
In a statement to staff, FDIC Chairman Martin Gruenberg, who was one of the agency’s top executives for nearly two decades, said the report offered a “sobering” look at the regulator and said hundreds of employees “reported painful experiences of mistreatment and feelings of mistreatment.” fear, anger and sadness.
Gruenberg, a Democrat in his second term as head of the FDIC, said he was “ultimately responsible” for everything that happened at the agency and apologized for any shortcomings. “I want to once again express how sorry I am,” he added.
The investigation was sparked by Wall Street Journal reports last year that said sexual harassment and other misconduct had been going on for years at the FDIC and had not been addressed by senior leaders. , and that in some cases Gruenberg had been personally involved in decisions that did not punish misconduct.
The report is expected to renew pressure on Gruenberg, who has faced calls from Republicans to resign following the WSJ reports.
President Joe Biden nominated Gruenberg in 2022 and the FDIC chief’s departure would jeopardize the administration’s efforts to impose tougher financial rules, including a pending regulatory proposal on bank capital requirements, which sparked a backlash from Republicans and industry representatives.
If Gruenberg resigns or is removed from office, the agency’s bylaws stipulate that FDIC Vice Chairman Travis Hill, a Republican, will take over, and the agency’s board will be split evenly. equal between Republicans and Democrats.
New York Post
