Daines Grills FDIC Chair on Toxic Workplace Double Standard

U.S. Senator Steve Daines today at a Senate Banking hearing grilled Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg on the recent investigation into a toxic workplace at the FDIC. The report found that the agency, under Gruenberg’s leadership, has been plagued with sexual harassment and assault, bullying, discrimination and brazen misconduct.

Daines pressed Chairman Gruenberg on President Biden’s pledge to fire employees engaging in misconduct:

Senator Daines: On day one of his Administration, President Biden said, and I quote, “If you’re ever working with me and I hear you treat another colleague with disrespect or talk down to someone, I promise you I will fire you on the spot. No if or buts.”

It’s interesting, given the findings of a recent investigation into the workplace culture at the FDIC that, Chair Gruenberg, I find you’re still sitting here, still with a job, before this committee. How do you reconcile what President Biden said with what’s been going on at the FDIC and the fact you still hold your job?

Chairman Gruenberg: As I’ve indicated, I accept all the findings of the report, the recent report, including in regard to my conduct. I’ve committed to addressing the issue personally as well as to having our workforce, on a confidential basis, regularly give me feedback as well as engaging an executive coach and any necessary counseling. I’m prepared to take responsibility on my part for the findings of the report.

Daines: So how do you resolve your boss saying. “I promise I’ll fire you on the spot?” Let’s start, first of all, with who’s been fired so far at the FDIC.

Gruenberg: I can tell you, Senator, that that this year there have been four employees separated from the agency for misconduct. We have had changes of senior management responsible in this area.

Daines: Just to make sure I know what ‘separated’ means, define that.

Gruenberg: It means they’ve either received termination notices from the agency or, before the disciplinary action takes effect, they’ve resigned or retired, which they’re allowed to do under the law. 

Daines: How many of them have been terminated?

Gruenberg: I would want to get back to you, but several of them, but not all of them. I mean, all of them either received termination notices or other disciplinary action before that action took place, at least some of them voluntarily left the agency.

Daines: What I find revealing is that some of the same Senate Democrats who have sought to stake their political identities on fighting against sexual harassment and discrimination are sitting here today and frankly turning a blind eye to the very same abuses that are happening under your leadership at the FDIC.

And I think it’s another example on full display for the American people of the Biden administration and Senate Democrats talking out of both sides of their mouth. If President Biden was serious about the pledge that he made on day one, he would have already called for a change in leadership at the FDIC.

However, it’s clear that the President and his party would rather ignore these damning findings out of political expediency.

Because without you, Chair Gruenberg, they lose a key figure in their rush to radically expand the regulatory state for little purpose other than to target politically disfavored entities.

Chairman Gruenberg, as I alluded in my opening remarks, an independent report investigating workplace culture of the FDIC, found the agency you have led longer than any other FDIC director in history has been plagued with sexual harassment, assault, bullying, discrimination, brazen misconduct.

Additionally, according to interviews with FDIC employees, you are described as someone who is incapable of controlling their temper and subordinates regularly describe interactions with you, and I quote, as being ‘extremely difficult and volatile.’

The findings make clear that serious and systemic reforms are desperately needed at the FDIC.

Given your long tenure lead in the agency and your clear inability or unwillingness to address these issues, how is it you can sit here and make the case you have the moral authority to continue leading the agency? 

If the President was consistent with what he said about firing people on the spot, this issue would have been addressed a long time ago. But how do you have the moral authority to continue leading the agency with the incredible list of behaviors and brazen allegation?

Gruenberg: Senator, we have been engaged since the news stories came out last year in an all-agency effort, engaging employees across the agency in addressing these deeply, deeply troubling issues. We have a comprehensive action plan we’re in the process of implementing. We’ve accepted all the findings of the new report and committed to implementing all of the recommendations. We’ve already started that process. We have engaged, as I’ve indicated, a broad participation in the agency. We are committed to following through, and I think I can provide the leadership to do that.

Daines then asked Gruenberg if the President has asked him to resign. Gruenberg did not answer the question.

Daines joined Banking Republicans in December in calling for Gruenberg’s resignation.