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FDIC head stepping down after report on agency’s workplace culture, White House says
The White House said Monday that the chairman of the Federal Deposit Insurance Corporation will step down, a departure that follows the release of a damning report about the agency’s toxic workplace culture.
The White House said Martin Gruenberg will step aside once a successor is appointed, and that President Biden will name a replacement “soon.” The announcement came after the top Democrat on the Senate Banking Committee earlier Monday called for Gruenberg’s removal.
Mr. Biden expects the FDIC “to reflect the values of decency and integrity and to protect the rights and dignity of all employees,” Deputy Press Secretary Sam Michel said in a statement.
Kevin Lamarque / REUTERS
Gruenberg has held positions in various levels of leadership at the FDIC for nearly 20 years, and this was his second full term as FDIC chair. His long tenure at the agency made him largely responsible for its toxic work environment, according to the independent report outlining the agency’s problems.
The 234 page report released Tuesday by law firm Cleary Gottlieb Steen & Hamilton cites incidents of stalking, harassment, homophobia and other violations of employment regulations, based on more than 500 complaints from employees.
The report says the agency fostered a workplace rife with harassment and bullying that mostly targeted women or people from underrepresented groups.
“[F]or 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.
Employees harbored a fear of retaliation that dissuaded them from reporting misconduct, and the report noted that one worker said they were contacting the law firm by using a VPN and someone else’s email because of their fear that senior executives would learn about their complaint.
Among the misconduct outlined in the report:
- One female worker said she feared for her physical safety after a colleague stalked her and continued to text her, including sending texts with partially naked women engaging in sex acts, even after she made a complaint about him.
- A male supervisor in a field office routinely talked about his female employees’ breasts and legs, as well as his sex life.
- A senior bank examiner send a text of his genitals out of the blue to a woman examiner while she was serving on detail in a field office.
- Workers who are part of underrepresented groups were told by colleagues that they were “only hired” because of they were members of those groups, and told they were “token” employees hired to meet a quota.
Gruenberg was also taken to task in the report, citing employee reports that he sometimes lost his temper and treated workers in a “demeaning and inappropriate manner.”
The findings about the FDIC’s workplace culture comes after the Wall Street Journal published a November investigation that alleged male employees at the agency engaged in harassment, such as sending lewd photos to female employees, yet still kept their jobs.
The FDIC is one of several U.S. banking system regulators. The Great Depression-era agency is best known for running the nation’s deposit insurance program, which insures Americans’ deposits up to $250,000 to protect them if their bank fails.
Before Monday, no Democrats had called for Gruenberg’s ouster, although several came very close to. But Ohio Sen. Sherrod Brown, the top Democrat on the Senate Banking Committee and who is facing a tough reelection campaign, issued a statement Monday calling for Gruenberg to step down, saying his leadership at the FDIC could no longer be trusted.
Gruenberg was grilled for two days last week on Capitol Hill in hearings largely focused on the FDIC’s workplace culture and the failures disclosed in the report prepared by an outside law firm.
“After chairing last week’s hearing, reviewing the independent report, and receiving further outreach from FDIC employees to the Banking and Housing Committee, I am left with one conclusion: there must be fundamental changes at the FDIC,” Brown said in a statement.
Republicans have been calling for Gruenberg’s ouster for some time and criticized the White House for not calling for his immediate departure.
— additional reporting by Aimee Picchi.
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Washington — Congress’ path forward on government funding is in limbo after House Republicans, with the support of Elon Musk and President-elect Donald Trump, torpedoed an initial deal to avert a shutdown before a Friday night deadline.
The House descended into chaos Wednesday when the GOP revolt sank a last-minute funding measure to keep the government operating through early next year.
The massive end-of-year spending legislation immediately sparked anger from conservatives when it was unveiled late Tuesday. Texas GOP Rep. Chip Roy referred to it on X as a “1,547-page Christmas tree,” while Rep. Kat Cammack, a Florida Republican, called it “a band-aid that is laced with fentanyl.”
The more than 1,500-page bill released Tuesday was far from a modest stopgap measure. In addition to extending government funding through March 14, it included disaster aid, health care policy extenders and a pay raise for members of Congress, among other provisions. The disaster relief portion of the bill came with a $110 billion price tag.
Elon Musk, the co-head of Trump’s advisory Department of Government Efficiency chimed in with a barrage of posts Wednesday calling the bill “criminal” and suggestions that Republicans who supported it did not belong in Congress. And the opposition culminated in statements from Trump lambasting the new spending and threatening a primary challenge against any Republican supporting the measure.
The president-elect called on Republicans to strip out the additional spending and added a new element instead — raising the debt ceiling. The debt ceiling, which limits how much the government can borrow to pay its bills, is suspended until the first quarter of next year, but Trump said he’d prefer to force President Biden to approve raising the debt ceiling so he wouldn’t have to sign it.
“I will fight ’till the end,” Trump wrote.
Top House Republicans met Wednesday night after the initial deal fell apart, but a new path forward remained unclear Thursday morning as Congress lurched toward Friday night’s deadline to fund the government.
Though stripping out most of the additional funding would satisfy many Republicans, Johnson is likely to need dozens of votes from Democrats, and some are already slamming Johnson for walking away from the agreement. They argue Republicans will shoulder any blame for a potential shutdown.
“Republicans have now unilaterally decided to break a bipartisan agreement that they made,” House Minority Leader Hakeem Jeffries, a New York Democrat, said Wednesday. “House Republicans will now own any harm that is visited upon the American people that results from a government shutdown or worse.”
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Spending fight throws Johnson’s speakership into question
The initial plan to keep the government funded and the chaos that surrounded it also prompted intense criticism of Johnson, including from members of his own party.
In addition to the slew of add-ons to the spending bill, conservatives are angry with Johnson for carrying out the negotiating process largely occurred outside of the view of rank-and-file members. Rep. Eric Burlison, a Missouri Republican, called the process “a total dumpster fire.”
A handful of Republicans indicated their support for Johnson’s speakership in the new Congress is now in question, and with such a narrow majority, it would take only a few to take him down. Rep. Thomas Massie, a Kentucky Republican, said flatly Wednesday that he won’t support Johnson in the speaker’s election.
“I’m not voting for him,” Massie said. “This solidifies it.”
In November, House Republicans backed Johnson to lead for another two years during their leadership elections. But the full chamber will vote to elect a speaker on Jan. 3. During the last speaker fight at the beginning of a new Congress in 2023, the slim Republican majority took 15 rounds to elect former Speaker Kevin McCarthy, who was ousted from the role nine months later, partly due to his handling of government funding.
Still, Johnson generally enjoys more favor than McCarthy with the president-elect, who wields widespread influence over House Republicans. Trump told Fox News Digital on Thursday that Johnson would “easily remain speaker” if he “acts decisively and tough” and eliminates “all of the traps being set by Democrats” in the spending package.
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