Senators allege partisan politics, double standards in response to FDIC scandal

Republican and Democratic senators accused one another of playing partisan politics Thursday in their responses to reports of a toxic workplace culture at the Federal Deposit Insurance Corporation (FDIC). 

While GOP lawmakers across the board have called on FDIC Chair Martin Gruenberg (D) to resign, Democrats have been split over how to respond, with some urging Gruenberg to make changes at the agency rather than step down. 

Sen. Tim Scott (R-S.C.), who serves as ranking member on the Senate Banking Committee, suggested at the panel’s oversight hearing Thursday that the Biden administration has kept the FDIC chair in place to continue progressing its regulatory agenda. 

The South Carolina Republican pointed to President Biden’s decision to fire Martin Dickman, the inspector general of the U.S. Railroad Retirement Board (RRB), in March on grounds of creating a hostile work environment. 

“I can only conclude with one question: What makes you so different from the inspector general?” Scott said. “Is it politics? Is it the fact that you are a necessary and easy vote for the Biden administration’s economic policy agenda? I think the answer is yes.” 

If Gruenberg were to step down, he would be replaced by the Republican FDIC Vice Chair Travis Hill, he acknowledged Thursday in response to questions from Sen. Bill Hagerty (R-Tenn.). 

“It’s truly remarkable that anybody on this committee would be willing to ignore this report and what it so obviously requires, all for a few regulations at the Federal Reserve,” Hagerty said. “Does the ‘Me Too’ movement now have an exception for technical regulations?” 

However, Sen. Elizabeth Warren (D-Mass.) countered her Republican colleagues, accusing them of engaging in “a purely political exercise” with their calls for Gruenberg’s resignation. 

“They want to replace you with Vice Chairman Travis Hill, who was the right-hand man to your Republican predecessor who allowed the cultural problems at the agency to fester,” Warren said. 

“Your resignation would do nothing to improve the toxic culture at the FDIC, but it would give Republicans a veto over bank policy,” she added. 

Other Democrats, like Rep. Maxine Waters (Calif.), ranking member of the House Financial Services Committee, have accused the law firm that conducted a recent review of the FDIC of political bias, alleging it downplayed concerns and complaints that occurred under Republican leaders of the agency in its final report. 

Cleary Gottlieb Steen & Hamilton’s report, released last week, confirmed allegations originally reported by The Wall Street Journal of a culture of sexual harassment, misconduct and retaliation at the banking regulator.   

Sen. Laphonza Butler (D-Calif.) also accused Republicans at Thursday’s hearing of “double standards” for their failures to call out the actions of former President Trump, who is now the presumptive GOP presidential nominee. 

“I also expect that my colleagues from both sides of the aisle will be consistent in their commitment to investigating and holding perpetrators to account of perpetrators of sexual harassment to account and abuse, whether they serve at the FDIC or they seek to occupy the Oval Office,” Butler said. 

“It’s been interesting and a bit perplexing to listen to my colleagues mentioned the notion of double standards but also experience how they have not and will not call out the behavior of the former president, who not only is in court today but finds himself having already been found liable for sexual assault,” she added. 

Trump has spent much of the last few weeks in court in New York City, where he is on trial for falsifying business records to conceal hush money payments to porn actor Stormy Daniels. 

The former president was also found liable last year for sexually abusing writer E. Jean Carroll during an encounter in the 1990s. 

“It simply cannot be that this behavior is disgusting and unacceptable for manager at the FDIC, but it’s willfully ignored and therefore excused for a person who hopes to actually be the next president of the United States,” Butler continued. “What incredible hypocrisy.” 

Sen. Steve Daines (R-Mont.) also suggested a double standard on the part of Democrats, questioning their commitment to fighting sexual harassment and discrimination. 

“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,” he said. 

“It’s clear that the president and his party would rather ignore these damning findings out of political expediency,” Daines added.