December 07, 2023

Scott Leads Banking Republicans in Call for FDIC’s Gruenberg to Resign, Provide Answers on Allegations of Sexual Harassment at the FDIC

Washington, D.C. – Ranking Member Tim Scott (R-S.C.) is leading fellow Banking Committee Republicans in calling on Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg to provide detailed information regarding the recent allegations of a toxic workplace culture, including allegations of sexual harassment and mistreatment of employees, and to resign as Chairman and Board Member. Senators Thom Tillis (R-N.C.), Cynthia Lummis (R-Wyo.), Kevin Cramer (R-N.D.), and Steve Daines (R-Mont.) joined the Ranking Member in the letter to Gruenberg.

The senators wrote, “…according to these reports, both you and your top deputies ‘have been involved in decisions over high-level examples of alleged sexism, harassment, and racial discrimination in which the agency didn’t take a hard line with individuals accused of misconduct,’ allowing the culture of harassment and discrimination to persist and flourish. As a leader, you bear an ethical and professional responsibility to those you serve to ensure a safe and respectful workplace. Accordingly, we are disturbed to learn that, while leading the agency, you reportedly personally ‘built a reputation for bullying and for having an explosive temper,’ culminating in at least one investigation against you after you angrily berated a female FDIC employee while you were Vice Chairman.”

“The culture of an organization is set from the top. As such, we have significant concerns with your ability to continue leading the FDIC as it seeks to clean up its public image and provide much-needed changes to its workplace culture to return the FDIC to working order. Given the importance of the role of the FDIC in maintaining stability and public confidence in the nation's financial system, we call on you to step down as Chairman and Board Member and allow someone with more credibility to address the hostile workplace culture at the FDIC to which you have contributed.”

To read the full letter, which includes detailed requests for information by the senators, click here. The letter also calls on Gruenberg to inform FDIC employees that they may confidentially contact Ranking Member Scott’s Committee staff if they desire to make a protected disclosure of information regarding waste, fraud, or abuse – including, but not limited to, sexual harassment or discrimination – or any other misconduct occurring at the FDIC. To share such information, FDIC employees may email RepWhistleblowers@banking.senate.gov or call 202-224-4287.

BACKGROUND:

Following the initial reports of sexual harassment and a toxic workplace culture at the FDIC, Ranking Member Scott released a statement promising to “continue to conduct rigorous oversight of the FDIC to ensure these problems are addressed, bad actors are held accountable, and a respectable office culture is restored at the agency.”

In April 2022, Senator Scott and then-Ranking Member Pat Toomey (R-Pa.) wrote to then-Acting Chairman Martin Gruenberg regarding troubling allegations of racial discrimination and fears of retaliation at the FDIC under his previous leadership of the agency. On September 17, 2018, a group of African American employees wrote to former FDIC Chairman Jelena McWilliams to express their concerns about the FDIC’s culture over the prior 14 years—much of which occurred under Acting Chairman Gruenberg’s prior stint as FDIC Chairman. The letter sought to understand how the agency functioned prior to the changes McWilliams implemented to prevent a reoccurrence of the culture of discrimination that existed under Mr. Gruenberg’s previous tenure as Chairman. Senators Scott and Toomey requested that the FDIC turn over all records pertaining to allegations of workplace misconduct by senior officials, as well as any corrective or disciplinary actions related to those complaints, from November 2004 to September 2018. In a response, Gruenberg declined to provide the records, citing privilege and privacy considerations and instead described, among other things, his efforts to bolster diversity programs at the agency.

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