Hagerty and Sinema Probe Financial Regulators’ Policies for Sexual Harassment Complaints

December 12, 2023

Press FDIC and other agencies on their policies and use of taxpayer funds to suppress complaints

WASHINGTON—United States Senators Bill Hagerty (R-TN), a member of the Senate Banking Committee, and Kyrsten Sinema (I-AZ), a member of the Senate Appropriations Committee, today sent a letter to Federal Reserve Chair Jerome Powell, Federal Deposit Insurance Corporation (FDIC) Chair Marty Gruenberg, and Acting Comptroller of the Currency Michael Hsu demanding answers about their policies for addressing sexual harassment complaints. The oversight effort was triggered by alarming reports that the FDIC attempted to suppress such complaints through the use of taxpayer-funded non-disclosure agreements and settlement payments.

“We are concerned by recent news reports alleging deeply disturbing conduct at the Federal Deposit Insurance Company (FDIC), including sexual harassment, official misconduct, and efforts to suppress such complaints through the use of non-disclosure agreements and settlement payments. While we remain committed to due process as ongoing investigations progress, if substantiated, many of these claims represent egregious and indefensible acts that warrant resignation or dismissal,” the Senators wrote.

“As you are aware, sexual harassment at any level erodes public trust and damages a government agency’s ability to manage effectively and deliver on its mission,” the Senators continued. “In addition to hamstringing the agency’s reputation and credibility, the misconduct exposed by the WSJ reveals a significant cost to American taxpayers to cover up sexual harassment within your department, potentially in violation of Public Law 117-224 and National Labor Relations Board regulations. American taxpayers should not be paying to cover up sexual harassment claims and shield corrupt bureaucrats from accountability.”

The Senators requested answers to the following questions by December 22:

  1. What is your agency’s practice of using non-disclosure agreements (NDAs)?  Under what circumstances do you use them?  How often has the use of NDAs led to monetary pay-outs to employees who signed NDAs?  Of the employees who sign NDAs, how many leave the agency because of the NDA (or is forced to leave as a condition of the NDA)?
  1. What is your agency’s policy in addressing employees against whom complaints for workplace harassment or intimidation have been filed?  Provide examples of how the policy has been implemented including the use of outside resources (such as anger management courses and training) and how the agency addressed recidivism.  Explain in detail if there are deviations from or exceptions made to agency policy.
  1. What is the role of agency’s senior leaders (the Board at the Federal Reserve and FDIC, the Comptroller at the OCC) in responding to complaints?  How are they engaged or briefed on such matters?  If they are not, why not?  What is the agency’s policy if the offending individuals are senior staff or agency principal?  Have there been instances in the past ten years in which senior staff or agency principal engaging in work place misconduct?  If so, detail how the agency addressed the matter.
  1. Please provide any guidance or expectations your agencies have for supervised financial institutions relating to the handling of such instances of harassment and misconduct.

A copy of the letter can be found here.