A report on office tradition on the Federal Deposit Insurance coverage Company launched on Tuesday revealed a broad, yearslong sample of sexual harassment, discrimination and abuse of principally girls and members of minority teams by senior officers. The findings are prone to result in one other probably bruising spherical of questions for the company’s chair, Martin Gruenberg, who’s scheduled to testify in Congress later this month.
The report stated the dangerous habits at F.D.I.C., which has the authority to watch the well being and stability of all U.S. banks however extra intently oversees smaller establishments, affected “far too many workers” and went on “far too lengthy.”
The company’s issues have been attributable to “a patriarchal, insular, and risk-averse tradition” and a “lack of readability and credibility round inner reporting channels,” stated the report, ready by the legislation agency Cleary Gottlieb. It described “fiefdoms” in regional workplaces, the place senior managers protected different longtime workers from potential penalties stemming from extra junior workers’ claims of mistreatment.
Examples of the habits, together with senior examiners texting junior girls photos of their genitalia or taking them to brothels, have been first reported by The Wall Avenue Journal in November. Tuesday’s report was the results of an impartial investigation by Cleary Gottlieb, which was employed by a particular committee created by the company’s board after The Journal’s report.
The report questioned whether or not Mr. Gruenberg, who has labored on the company for nearly twenty years and led it for 10 of the final 13 years, may successfully proceed in his position.
“The incidents of — and ensuing repute for — shedding his mood and expressing anger with employees,” it stated, “could hinder his capacity to ascertain belief and confidence in main significant tradition change.” The report additionally cited Mr. Gruenberg’s “obvious lack of ability or unwillingness to acknowledge how others expertise sure troublesome interactions with him.”
In a memo to F.D.I.C. staffers on Tuesday that was shared with The New York Instances, Mr. Gruenberg apologized for his habits.
“To anybody who skilled sexual harassment or different misconduct on the F.D.I.C., I once more wish to categorical how very sorry I’m. I additionally wish to apologize for any shortcomings on my half. As chairman, I’m in the end accountable for the whole lot that occurs at our company, together with our office tradition,” he wrote.
The report didn’t advocate that Mr. Gruenberg step down or be eliminated. It prescribed new methods for safeguarding victims of abuse, a brand new position to watch tradition, extra coaching to enhance office habits and higher reporting methods for workers experiencing mistreatment.
However it may gasoline new requires Mr. Gruenberg to depart. Republicans in Congress have been pushing for him to resign since final fall, whereas Democrats criticized his habits as reported by The Journal and referred to as for an impartial investigation.
Greater than Mr. Gruenberg’s profession is at stake. Financial institution executives and lobbyists, who typically oppose a brand new plan proposed by federal regulators to extend capital necessities on the biggest establishments, consider that if Mr. Gruenberg leaves the F.D.I.C., there won’t be sufficient help for the plan left among the many different regulators and it must be scrapped.
Mr. Gruenberg is about to testify earlier than the Home Monetary Companies Committee on Could 15 and the Senate Banking Committee on Could 16 in semiannual hearings on monetary regulation.