A report on office tradition on the Federal Deposit Insurance coverage Company launched on Tuesday revealed a broad, yearslong sample of sexual harassment, discrimination and abuse of principally ladies and members of minority teams by senior officers. The findings are more likely to result in one other doubtlessly bruising spherical of questions for the company’s chair, Martin Gruenberg, who’s scheduled to testify in Congress later this month.
The report mentioned the dangerous habits at F.D.I.C., which has the authority to observe the well being and stability of all U.S. banks however extra intently oversees smaller establishments, affected “far too many workers” and went on “far too lengthy.”
The company’s issues had been attributable to “a patriarchal, insular, and risk-averse tradition” and a “lack of readability and credibility round inside reporting channels,” mentioned the report, ready by the regulation agency Cleary Gottlieb. It described “fiefdoms” in regional places of work, the place senior managers protected different longtime workers from potential penalties stemming from extra junior workers’ claims of mistreatment.
Examples of the habits, together with senior examiners texting junior ladies footage of their genitalia or taking them to brothels, had been first reported by The Wall Avenue Journal in November. Tuesday’s report was the results of an unbiased investigation by Cleary Gottlieb, which was employed by a particular committee created by the company’s board after The Journal’s report.
The report questioned whether or not Mr. Gruenberg, who has labored on the company for nearly twenty years and led it for 10 of the final 13 years, may successfully proceed in his function.
“The incidents of — and ensuing status for — dropping his mood and expressing anger with workers,” it mentioned, “might hinder his potential to determine belief and confidence in main significant tradition change.” The report additionally cited Mr. Gruenberg’s “obvious incapacity or unwillingness to acknowledge how others expertise sure troublesome interactions with him.”
In a memo to F.D.I.C. staffers on Tuesday that was shared with The New York Instances, Mr. Gruenberg apologized for his habits.
“To anybody who skilled sexual harassment or different misconduct on the F.D.I.C., I once more need to specific how very sorry I’m. I additionally need to apologize for any shortcomings on my half. As chairman, I’m finally chargeable for the whole lot that occurs at our company, together with our office tradition,” he wrote.
The report didn’t suggest that Mr. Gruenberg step down or be eliminated. It prescribed new techniques for shielding victims of abuse, a brand new function to observe tradition, extra coaching to enhance office habits and higher reporting techniques for workers experiencing mistreatment.
Nevertheless it may gas new requires Mr. Gruenberg to depart. Republicans in Congress have been pushing for him to resign since final fall, whereas Democrats criticized his habits as reported by The Journal and known as for an unbiased investigation.
Greater than Mr. Gruenberg’s profession is at stake. Financial institution executives and lobbyists, who usually oppose a brand new plan proposed by federal regulators to extend capital necessities on the biggest establishments, consider that if Mr. Gruenberg leaves the F.D.I.C., there won’t be sufficient help for the plan left among the many different regulators and it should be scrapped.
Mr. Gruenberg is ready to testify earlier than the Home Monetary Providers Committee on Might 15 and the Senate Banking Committee on Might 16 in semiannual hearings on monetary regulation.
