WASHINGTON–Five officials with the Federal Deposit Insurance Corp. (FDIC), including its former chairman, Martin Gruenberg, engaged in workplace misconduct, according to a new report from the agency’s Office of Inspector General.
The report comes two years after a 2023 investigation by the Wall Street Journal uncovered a “toxic boys club” environment at the agency that led many women to leave and drove many to “tears.”
“While the scope and severity of conduct varied, our investigations developed evidence supporting that each of the senior officials personally engaged in some degree of inappropriate workplace conduct,” the report states.
The FDIC OIG identified Gruenberg, but declined to identify officials one through four in the report, which is the second that OIG has produced on the culture at the bank regulator and insurer. An outside law firm also previously issued a report.
Gruenberg left the FDIC earlier this year.
‘Did Not Protect Victims’
“Our investigations developed evidence supporting that certain actions of these senior officials did not protect victims of harassment, nor consistently align with the FDIC’s applicable policies and stated core values (including accountability, fairness, and integrity),” the report states.
According to the report, Gruenberg could be “short tempered,” was “not always nice,” “his behavior could feel threatening,” and he made people cry – an allegation the OIG said it heard from “at least four people.”
The report also said Gruenberg believed the Wall Street Journal report was a “political attack” that did not focus on the underlying issues. The OIG report said Gruenberg “seemed more interested in protecting himself than fixing the problems noted in the articles.”
Official One: ‘Belittled Staff’
According to the report, Official 1, a deputy chairman who started at the FDIC in 1998, belittled staff, made demeaning comments, and was dismissive of employee concerns.
“On multiple occasions, she drove employees to tears,” the OIG report states. “When employees raised concerns, Official 1 was dismissive and would state things like ‘you’re not used to working hard,’ ‘not used to working to tough standards,’ and would say to her managers that she thought staff were being ‘babies and needed to get over it.’”
Official 1 did not agree to be interviewed by the OIG for the report.
Two: ‘Completely Inappropriate
The report said Official 2 left a “vitriol[ic]” and “completely inappropriate” ranting, swearing voicemail to an employee who had made a “fairly benign mistake.” The employee filed a complaint with the Equal Employment Opportunity Commission and received a $105,000 payout, but was then allegedly subject to retaliation by Official 2.
The OIG said that during an interview Official 2 “took responsibility for his actions and also said that, when he left the voice message, he was en route to visit a sick relative.:
Official Three: ‘Detailed Allegations of Sexual Harassment’
Official 3, according to the report, was the subject of detailed allegations of sexual harassment, gender discrimination and inappropriate conduct in 2022 and 2023. The OIG report said the allegations against him include that he told one employee he was excited to see her “from the waist down” after previously only working remotely with them, and that on another occasion, he looked her up and down and muttered, “wow.”
In an interview with the OIG, the report said Official 3 “acknowledged that he may not have been articulate” during the “unscripted moment.”
Official Four: Those Who Disagree are ‘Disloyal’
The report found that Official 4 “viewed those who took opposing positions to his as ‘disloyal’ and that he would respond by using his position to investigate them or move them out of their positions.”
Witnesses alleged to the OIG that Official 4 arbitrarily reassigned managers into nonsupervisory roles, with three witnesses alleging he “exerted influence over personnel investigations in favor of those he liked and against those he did not,” the report states
Official 4 told the OIG that of five reassignments, some were for disciplinary actions and some were not, with each based on “a different set of facts,” according to the report.
Nearly 300,000 Documents
The OIG said its investigation included outreach to FDIC employees, a technology-assisted review of 280,448 FDIC documents, follow-up document requests and interviews of 69 current and former FDIC employees.
None of the five officials still work at the FDIC, according to the report.
