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FDIC chair faces calls to resign, probe imminent, after reports of toxic workplace

Ray Bogan Political Correspondent
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FDIC Chair Martin Gruenberg is facing calls to resign after The Wall Street Journal reported accusations of a toxic workplace at the agency. An investigation is expected to follow.

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Here’s what happened:

On Monday, Nov. 13, The Wall Street Journal published a report titled: “Strip Clubs, Lewd Photos and a Boozy Hotel: The Toxic Atmosphere at Bank Regulator FDIC.”

“Employees say sexual harassment, misogyny pervade federal agency tasked with ensuring stability of nation’s banks, driving women to leave,” the report said.

On Tuesday, FDIC Chair Gruenberg appeared before the Senate Banking Committee for a previously scheduled hearing. 

“I am personally disturbed and deeply troubled by this report.” Gruenberg told the committee. “The FDIC is conducting a comprehensive review, including engaging an independent third party. I have no higher priority to ensure that all FDIC employees work in a safe environment where they feel valued and respected.”

After the hearing, The Wall Street Journal published another report titled “FDIC Chair, Known for Temper, Ignored Bad Behavior in Workplace.” The report alleges that Gruenberg was part of the problem.

“Martin Gruenberg set a tone that left alleged harassment and discrimination unpunished at the bank regulator,” the report said.

Resignation vs. Investigation

Sen. John Kennedy, R-La., and other Republicans are calling for Gruenberg’s resignation. 

“Have you ever sexually harassed an employee at the FDIC,” Kennedy asked Gruenberg at the Banking Committee hearing.  

“No, sir,” Gruenberg answered.  

“Apparently you’re the only one,” Kennedy responded. 

Democrats are calling for an investigation by the FDIC’s Office of Inspector General. 

“The reports are extremely concerning,” Banking Committee Chairman Sherrod Brown, D-Ohio, said in a statement. “I am calling for the FDIC’s Office of the Inspector General to conduct an independent and thorough investigation into the workplace culture at the agency.”

Why the different responses?

As The Wall Street Journal points out, if Gruenberg, a Democrat, exits, then the FDIC board will have an equal number of Republicans and Democrats. 

The controversy is already having a negative impact. A board meeting was canceled Thursday during which members were supposed to finalize a plan to reimburse the FDIC for the billions it distributed after the collapse of Silicon Valley Bank and New York’s Signature Bank

In addition to the internal investigation, the chairman of the House Financial Services Committee said his panel will conduct a “rigorous investigation.” 

“Under his leadership, the FDIC is at best preoccupied with this sideshow and at worst compromised,” Rep. Patrick McHenry, R-N.C., said in a statement. 

If Gruenberg leaves the position for any reason, President Biden would have to nominate a new chair who needs Senate confirmation.

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(Ray Bogan | Anchor)

The FDIC chair is facing calls to resign and an investigation is imminent, after a series of Wall Street Journal reports exposed accusations of a toxic workplace at the agency. 

Here’s what happened. 

On Monday, the Wall Street Journal published a report titled: “Strip Clubs, Lewd Photos and a Boozy Hotel: The Toxic Atmosphere at Bank Regulator FDIC”.

It stated: “Employees say sexual harassment, misogyny pervade federal agency tasked with ensuring stability of nation’s banks, driving women to leave”. 

On Tuesday, FDIC Chair Martin Gruenberg appeared before the Senate Banking Committee for a previously scheduled hearing. 

“I am personally disturbed and deeply troubled by this report. The FDIC is conducting a comprehensive review, including engaging an independent third party,” Gruenberg told the committee. “I have no higher priority to ensure that all FDIC employees work in a safe environment where they feel valued and respected.” 

But after the hearing, the Wall Street Journal published another report that said Gruenberg was part of the problem. 

The headline read, “FDIC Chair, Known for Temper, Ignored Bad Behavior in Workplace”. 

It stated, “Martin Gruenberg set a tone that left alleged harassment and discrimination unpunished at the bank regulator.” 

Sen. John Kennedy, R-La., and other Republicans are calling for Gruenberg’s resignation. 

“Have you ever sexually harrased an employee at the FDIC?” Kennedy asked Gruenberg at Tuesday’s Banking Committee hearing.  

“No, sir,” Gruenberg answered.  

“Apparently you’re the only one,” Kennedy responded. 

Democrats are calling for an investigation by the FDIC’s Inspector General. 

“The reports are extremely concerning. I am calling for the FDIC’s Office of the Inspector General to conduct an independent and thorough investigation into the workplace culture at the agency,” Banking Committee Chairman Sherrod Brown, D-Ohio, said in a statement. 

Why the different responses? 

As the Wall Street Journal points out – if Gruenberg, a Democrat, exits, the FDIC board will have an equal number of Republicans and Democrats. 

This controversy is already having a negative impact. A board meeting was canceled Thursday during which members were supposed to finalize a plan to reimburse the FDIC for the billions it distributed after the collapse of Silicon Valley Bank and New York’s Signature Bank. 

In addition to the internal investigation, the Chairman of the House Financial services committee says his panel will conduct a,“rigorous investigation”. 

“Under his leadership, the FDIC is at best preoccupied with this sideshow and at worst compromised,” Chairman Patrick McHenry, R-N.C., said in a statement. 

If Gruenberg leaves the position for any reason, President Biden would have to nominate a new chair who needs senate confirmation.