Independent Review Reveals Toxic Workplace Culture At FDIC

An independent review conducted by law firm Cleary Gottlieb Steen & Hamilton has exposed a workplace culture at the Federal Deposit Insurance Corp. (FDIC) that has many upset.

The report released on Tuesday paints a picture of an environment that tolerated “hostile abusive unprofessional or inappropriate conduct” and raises doubts about the ability of the agency’s chairman to spearhead a cultural transformation.

The review, which was ordered by the FDIC’s board following an investigation by the Wall Street Journal last November, details incidents of stalking, harassment, homophobia and other violations of employment regulations across the agency’s field offices and headquarters in Washington. Over 500 workers reported such incidents.

“Far too many employees and for far too long the FDIC has failed to provide a workplace safe from sexual harassment discrimination and other interpersonal misconduct” the report states. It also finds that a “patriarchal insular and risk-averse culture” contributed to the persistence of workplace misconduct and that a “widespread fear of retaliation” led to underreporting of such incidents over the years.

The report describes the FDIC’s workplace culture as a “‘good ol’ boys’ club where favoritism is common; wagons are circled around managers and senior executives with well-known reputations for pursuing romantic relations with subordinates enjoy long careers without any apparent consequence.” Lawmakers from both parties have called for the resignation of FDIC Chairman Martin Gruenberg whose behavior is also scrutinized in the report.