Federal Deposit Insurance Commissioner Martin Gruenberg has announced that he is, “prepared to step down from my responsibilities once a successor is confirmed.”
Gruenberg’s announcement came after he faced withering criticism from Senate Banking Committee Ranking Member Tim Scott (R-SC) and Senator Joni Ernst (R-IA) over his mismanagement of sexual harassment and other gross personnel misconduct at the FDIC.
Scott’s and Ernst’s ire was raised by a devastating Report for the Special Review Committee of the Board of Directors of the Federal Deposit Insurance Corporation from the law firm Cleary, Gottlieb, Steen & Hamilton, LLP in response to years of complaints from FDIC employees about sexual harassment and personal abuse that have plagued the typically sleepy banking regulator.
The normally soft-spoken Scott confronted Gruenberg with numerous instances of egregious behavior under his watch, unequivocally stating, “Marty — you’ve heard me say this to you directly — you should resign.”
The problem with Gruenberg’s announcement is he isn’t really resigning. He is saying, if the President appoints someone to replace me and if the Senate confirms that person, then I will leave.
I think Mr. Gruenberg doesn’t fully understand his position. He is resigning for cause. Meaning, he doesn’t get to set the terms of his packing his bags.
Given the obvious fact that Gruenberg doesn’t understand the gravity of the charges against him and the need for him to leave in order to allow the Agency staff to move forward without fear of reprisals in the interim, the House and Senate committees which oversee the FDIC must have another hearing specifically on the charges levied in the Report.
Senator Scott hammered home why this is necessary when he said, “Your employees do not have confidence in you. And this is not a single incident. This spans over a decade-plus of your leadership at the FDIC.”
Rep. Gregory Meeks (D-NY) put it even more bluntly, “I would love to talk about some of the substance of the economy. But as I sit here right now, if I'm gonna be honest, I'm pissed off...I'm pissed off because of the very idea that employees suffered from racial and gender discrimination, bullying, mistreatment and harassment at the FDIC for years, and as I see in the report, not a single one resulted in a removal, reductions in paygrade, or any discipline more serious than a mere suspension.”
One specific instance of abuse detailed in the report was that supervisors of a disabled veteran FDIC employee regularly referred to him as Pirate McNasty.
Gruenberg didn’t have an answer when Scott asked him directly about how such appalling behavior could occur.
Other employees were “permitted to mock the fact that this employee used a wheelchair.”
Ernst started the bi-partisan chorus calling for Gruenberg to step down, and responded to President Biden’s refusal to fire Gruenberg, “The FDIC frat party is over, and it’s past time for President Biden to take real action. By failing to fire and immediately remove Chairman Martin Gruenberg, to ensure Democrats keep control of the FDIC’s Board of Directors, the Biden administration is putting politics over protecting women in the workplace. Gruenberg needs to go today, and everyone who perpetuated this culture of misconduct should be investigated and immediately removed from the FDIC, so public servants are focused on serving Americans, not their Animal House behavior.”
The senator had called for Gruenberg’s firing in the immediate aftermath of the Cleary Report putting it squarely in President Biden’s lap by demanding he, “… order his Department of Justice to investigate the FDIC from top to bottom, or else he is complicit in subjecting the women of the FDIC to more abuse and discrimination.”
Ernst continued, “No amount of mops could completely clean the FDIC frat house. It’s time to throw away the current leadership’s keys and permanently change the locks, so we can close the door on this chapter of abuse.”
Senator Ernst is exactly right. By not firing Gruenberg immediately, Biden broke his word given on his first day in office to his staff members that, “I will fire you on the spot” if they disrespect others.
Given the President’s intransigence and the timing games being played by Gruenberg in his contingent resignation, aided and abetted by Senate Banking Chairman Sherrod Brown (D-OH), it is imperative that the House Financial Services Committee and the Senate Banking Committee hold hearings that specifically investigate the Cleary Special Report to give voice to those who have been abused and intimidated, pressuring the White House to erase this blot from the FDIC.
Of course, Martin Gruenberg could put this all to rest by simply doing the right thing and resigning effective yesterday.
The author is president of Americans for Limited Government.
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