Misconduct allegations not reported promptly

Martin Gruenberg, chairman of the Federal Deposit Insurance Corporation (FDIC), during a House Financial Services Committee oversight hearing in Washington, DC, US, on Wednesday, May 15, 2024. 

Graeme Sloane | Bloomberg | Getty Images

The Federal Deposit Insurance Corp. failed to report allegations of senior officials’ misconduct in a timely manner, according to a new memo from the agency’s internal watchdog.

The letter, sent by Inspector General Jennifer Fain to Chair Martin Gruenberg, is the latest development in a monthslong probe of sexual abuse and harassment at the FDIC. Gruenberg announced on Monday that he plans to resign as soon as his successor is confirmed.

The Office of Inspector General “learned of several allegations of misconduct regarding senior FDIC officials that were not reported to the OIG in a timely manner,” said the letter, dated Thursday. “The OIG is now reviewing these allegations to determine how they should be incorporated into OIG work plans.”

Fain wrote in the letter than the watchdog is following up with FDIC’s Office of Minority and Women Inclusion and other employee relations departments “to identify if there are additional allegations that have not been reported to the OIG.”

In its response to the memo, the FDIC said it “welcomes coordinating with the OIG to develop and implement a process to notify the OIG of misconduct allegations, include the OIG Hotline as a reporting option for misconduct, and reminding FDIC employees of the obligation to report to the OIG.”

A scathing independent report published in April found a widespread culture of harassment and discrimination at the FDIC, citing allegations from more than 500 FDIC employees.

“The FDIC has failed to provide a workplace safe from sexual harassment, discrimination, and other interpersonal misconduct,” the report concluded.

The probe also described Gruenberg — a Democrat nominated by President Joe Biden in 2022 — as having a short temper that left employees feeling “unsettled, disturbed, and demeaned.”

Republican lawmakers were quick to call for Gruenberg’s resignation and are still pressing for him to step down immediately before a successor is named.

On Thursday, the GOP-led House Financial Services Committee sent letters to Gruenberg and two other FDIC officials demanding they appear before the committee on June 12 for a panel on the probe’s findings.

Gruenberg testified before the same committee on May 15.

If Gruenberg’s position were to become vacant, the FDIC vice chairman, Republican Travis Hill, would assume the chair’s responsibilities and the agency’s board would be deadlocked.

Following Gruenberg’s resignation announcement, a spokesperson for the White House said Biden would put forward his nominee for the position “soon.”

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