Months after he was accused of overseeing a “boy’s club” workplace rife with misogyny and harassment, the FDIC Chairman Martin Gruenberg said Wednesday he’s prepared to step down once a successor is confirmed.
“In light of recent events, I am prepared to step down from my responsibilities once a successor is confirmed,” he said. “Until that time, I will continue to fulfill my responsibilities as Chairman of the FDIC, including the transformation of the FDIC’s workplace culture.”
A Wall Street Journal report in November marked the beginning of Gruenberg’s downfall, with women at the FDIC claiming male employees got to keep their jobs despite sending colleagues pictures of their penises, inviting others to a strip club, and speaking openly about having sex with a subordinate. The agency was also accused of tolerating a messy drinking culture, with staffers having allegedly urinated off the roof and vomited in the elevator of a hotel where employees are housed for trainings.
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Next came an independent probe by the law firm Cleary Gottlieb, which shared a scathing 174-page report last month that drew accounts of more than 500 people that largely confirmed—and expounded upon—the allegations in the Journal article.
That probe revealed shortcomings by Gruenberg, alleging that he had a short temper and would bully and verbally abuse subordinates. That included one instance where he allegedly screamed profanities after being told bad news.
“For far too many employees and for far too long, the FDIC has failed to provide a workplace safe from sexual harassment, discrimination, and other interpersonal misconduct,” the report said.
Gruenberg testified before the House Financial Services Committee on May 15. He apologized for the misconduct at the agency and pledged to implement the report’s recommendations.
Last month’s report, on top of last week’s less-than-inspiring testimony, culminated with Sen. Sherrod Brown (D-OH), the Senate Banking Chair, calling for Gruenberg to be replaced on Monday just before the chairman offered up his own resignation. Brown’s position was a break with fellow Democrats, who’d stood behind Gruenberg, an appointee of Joe Biden, while condemning the allegations.
There “must be fundamental changes at the FDIC,” Brown said in a statement. “Those changes begin with new leadership, who must fix the agency’s toxic culture and put the women and men who work there—and their mission—first.”
Gruenberg is likely not resigning immediately because of politics. If he were to leave prior to a replacement being confirmed, it would leave the FDIC’s Board of Directors politically deadlocked, with two Democrats and two Republicans each on the panel. That split would jeopardize Biden’s financial reform agenda, which he has pushed hard in recent months.
