Hagerty Grills FDIC Chairman Gruenberg on Managerial Failures Exposed in Scathing Independent Report

May 16, 2024

WASHINGTON—United States Senator Bill Hagerty (R-TN), a member of the Senate Banking Committee, today in a hearing confronted Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg about his managerial failures. Hagerty urged his colleagues to acknowledge Gruenberg’s responsibility for leading an agency rife with misconduct—and to call on him to resign.

The hearing comes in the wake of an independent report on sexual harassment and the toxic work culture at the FDIC.

“Chairman Gruenberg…Roughly one in 10 FDIC employees reported experiences of sexual harassment, discrimination, and other interpersonal misconduct. Just the sheer volume of complaints demonstrates serious managerial issues,” Hagerty said. “A workplace culture like this doesn’t evolve overnight. This is shaped by years of senior management. The report even says, ‘culture starts at the top.’ Well, you’ve been at the FDIC for nearly 20 years, 10 of the past 13 years. You’ve led the agency.”

“So my question is this: if the FDIC’s culture is the problem, and you’ve established this culture for nearly two decades, how could you possibly be the most capable person to fix this rot?” Hagerty asked.

“I take full responsibility,” said Gruenberg. “I’ve also indicated that one of my failures was not recognizing the deep-seated cultural challenge the agency has previously since last December.”

“If you were to resign your role, who would take your place?” Hagerty asked.

“The Vice Chairman would become acting Chairman,” said Gruenberg.

“Is the Vice Chairman Republican?” Hagerty asked.

Gruenberg confirmed that the Vice Chairman is a Republican.

“I think now we’re getting to the very core of what’s happening here,” Hagerty said. “This is what’s going on: Just yesterday in a House hearing, Representative [Ayanna] Pressley from Massachusetts said the quiet part out loud. She said that if you were to resign, it would jeopardize critical regulations pending finalization at this agency. Just let that sink in….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 in the Federal [Register].”

“Does the ‘Me Too’ movement now have an exception for technical regulations? Chairman Gruenberg, is saving your job more important than protecting the staff and the integrity of the agency that you lead?” Hagerty asked.

Gruenberg dodged the question by stating, “I have no higher priority than addressing these issues and protecting the employees of the FDIC.”

“I don’t believe you can do it…This is the most damning report I’ve ever seen, and I can’t believe there’s a willingness of anybody on this committee to brush this under the table just to get a regulatory agenda passed,” Hagerty concluded.

*Click the photo above or here to watch*