Maxine Waters backs FDIC chair after sexual harassment report

The top Democrat on the House Financial Services Committee blasted a third-party investigation of sexual harassment and misconduct at the Federal Deposit Insurance Corp. (FDIC), arguing it focuses disproportionately the agency’s current Democratic leader and not enough on his Republican predecessors.

In a Thursday statement, Rep. Maxine Waters (D-Calif.) acknowledged cultural deficiencies at the FDIC, highlighted in the report by law firm Cleary Gottlieb Steen & Hamilton, but effectively stood up for FDIC Chair Martin Gruenberg as he faces bipartisan pressure to resign.

“The Cleary report places the focus for ‘tone at the top’ solely on the Democratic chair under whose leadership the agency received the most favorable ratings from its employees, while it completely ignores the activities of the two previous Republican Chairs,” Waters said in a Thursday statement.

Waters also described the contents of the report as “troubling,” saying it “affirms that the FDIC needs to change its policies and programs to improve its workplace culture — particularly in the area of anti-sexual harassment.”

The FDIC pushed back Thursday on the statements that the Cleary Gottlieb report was unfairly focused on the agency’s current leadership.

“The report makes clear that the workplace culture issues at the FDIC are long-standing. The report does not limit its findings to the current Chair,” Jonathan McKernan, co-chair of the special review committee overseeing the Cleary Gottlieb investigation, said in a statement provided to The Hill.

Waters’ support for Gruenberg puts her at odds with some of her colleagues on the House Financial Services Committee, notably Rep. Bill Foster (D-Ill.), the top Democrat on the Financial Institutions subcommittee.

On Tuesday, Foster called for Gruenberg’s resignation, saying that he was “appalled” and “deeply disturbed” by the accounts of widespread sexual harassment and discrimination documented in the report.

Numerous Republican lawmakers in both the House and Senate have already called for the departure of Gruenberg, a 20-year veteran of the FDIC who has held multiple positions within the agency.

Sexual harassment and a culture of intimidation have been problems at the FDIC for years, documented as far back as 2014 in a report by the regulator’s inspector general published in 2020.

A survey referenced in that report found that 9 percent of FDIC respondents had experienced sexual harassment between 2014 and 2016, a lower number than the government-wide average at 14 percent.

The roughly 500 individuals who reported harassment to Cleary Gottlieb from the agency’s workforce of 5,280 full-time employees puts the prevalence of sexual harassment in line with recent historical standards.

The 2020 inspector general report found that the FDIC had not set up an acceptable sexual harassment prevention program, a void that appears not to have been filled in the years since.

Cleary Gottlieb did not immediately respond to a request for comment on Waters’ criticisms of the firm’s investigation.

Former FDIC Chairs Jelena McWilliams, who led the agency when the 2020 inspector general report was released, and Sheila Bair did not respond to requests for comment.