Lawmakers Grill FDIC Chair Over Alleged ‘Toxic’ Workplace Culture

Several U.S. senators on Tuesday questioned the chairman of the Federal Deposit Insurance Corp. over allegations that the banking regulator fostered a "toxic" workplace culture of rampant sexism and harassment.

Martin Gruenberg was asked by lawmakers about what the agency was doing to address the allegations, which appeared Monday in a Wall Street Journal report.

“You and your colleagues ought to hide your head in a bag,” Sen. John Kennedy, a Louisiana Republican, said during an exchange with Gruenberg at the previously-scheduled hearing by the Senate Committee on Banking, Housing, and Urban Affairs on regulatory protection of bank customers. "This is no country for creepy old men, and they got no place for them at the FDIC.”

"I am personally disturbed and deeply troubled by this report,” Gruenberg told the committee.

He said that the FDIC was “conducting a comprehensive review, including engaging an independent third party, to ensure that we understand the nature of these issues and take all appropriate actions to address them." The review would look into employees' conduct across the agency, he said, adding that he hoped the study would be finished within 90 days.

Gruenberg didn’t mention the allegations in a written statement posted to the FDIC’s website on Tuesday.

In a statement Tuesday, the agency said that “Harassment in any form is contrary to the FDIC’s values and our deep commitment to fostering a diverse and inclusive workplace” and that “When we identify misconduct, we investigate and take appropriate action.”

The Journal interviewed more than 100 current and former FDIC employees and reviewed legal filings to conclude that the agency repeatedly failed to take action against employee complaints of sexual harassment. The newspaper cited several examples of an allegedly toxic culture in which supervisors invited staff to strip clubs and male employees sent their female colleagues unsolicited nude photographs.

Kelsi Foutz, a senior risk management examiner who worked in Salt Lake City and San Francisco, was quoted as saying that she received a negative performance review in 2018 after being assigned to a different office; a senior colleague told her that her male reviewer "is just intimidated by tall beautiful women," while two male managers told her to "just smile and make him feel good."

When Foutz joined the regulator in 2013 — when she was 21 and working in a different office — she told the Journal that an examiner complained to her about his marriage and said he wasn't having enough sex. 

"Obviously if I walked into this office and you were naked, I’d f--- you right here,” she said he told her, according to the report. She added that she was so stunned she didn't say anything and never filed a complaint.

Several House Republicans, led by Chairman of the House Financial Services Committee Rep. Patrick McHenry, R-N.C., on Tuesday sent a letter to the Office of the Inspector General for the FDIC demanding a briefing on the agency's workplace culture.