Biden’s Labor chief calls FDIC revelations ‘clearly horrific’

Acting Secretary of Labor Julie Su described revelations stemming from a probe into allegations of sexual harassment and discrimination at a top bank regulator as “clearly horrific” at a hearing on Thursday. 

During tense questioning by Sen. John Kennedy (R-La.), Su was pressed about the investigation into the Federal Deposit Insurance Corporation (FDIC), finding it failed to provide a “provide a workplace safe from sexual harassment, discrimination, and other interpersonal misconduct.”

Kennedy asked Su at the hearing on the Biden administration’s fiscal 2025 budget request for the Department of Labor if she would use her “legal authority” to open an investigation of the FDIC amid the ongoing scandal. 

“I am deeply concerned anytime a working person goes to work and does not get the dignity and respect that they deserve,” Su said, while noting she is “charged with enforcing certain laws based on the powers that Congress has given to the Department of Labor.”

“I appreciate that you are raising an issue involving working people who have experienced clearly horrific sexual harassment and other kinds of abuse,” she said. “And what it demonstrates is that too often workers may feel like they have to endure [what] no one should have to endure because of a power imbalance in the workplace.”

Kennedy then pressed Su on whether she plans to “do anything about it,” such as calling on FDIC Chair Martin Gruenberg to resign, while arguing Su has a “legal and moral authority to investigate Labor.”

“I’m honestly surprised. I thought you would pounce on this like a ninja,” he said, to which Su responded, “Like a what?”

Kennedy said he’d “heard that expression in movies” before accusing Su of “waffling” during his line of questioning.

“Are you or are you not going to call for Martin Gruenberg, who runs the FDIC and has been there since God was a corporal, and the senior leadership over there to resign?” he said. 

Su didn’t specifically answer that question, but defended the administration’s budget request for the Labor Department. 

In an earlier exchange during the hearing, the senator had also pressed Su about how she intended to respond to the findings. Su noted, in response, that the “sexual harassment claims that [Kennedy is] talking about fall under a different federal agency.”

The back-and-forth comes as Gruenberg, who was confirmed by the Senate in 2022, has been facing renewed pressure to resign in light of the recent probe into the workplace culture at the FDIC.

The review carried out by Cleary Gottlieb Steen & Hamilton also concluded “a patriarchal, insular, and risk-averse culture has contributed to the conditions that allowed for this workplace misconduct to occur and persist, and that a widespread fear of retaliation, as well as a lack of clarity and credibility around internal reporting channels, has led to an underreporting of workplace misconduct over the years.”

“While we do not find Chairman Gruenberg’s conduct to be a root cause of sexual harassment and discrimination in the agency or the long-standing workplace culture issues identified in our review, we do recognize that, as a number of FDIC employees put it in talking about Chairman Gruenberg, culture ‘starts at the top,’” it also stated.