The Federal Deposit Insurance Corp. did not have an effective sexual harassment program, following a 2020 evaluation by its watchdog, the Office of Inspector General. Announced Thursday.
Watchdog groups said the failure to do so created an environment where employees were discouraged from speaking up about sexual harassment for fear of retaliation.
“[W]During the evaluation, the FDIC found that it had not followed its inspection procedures and had not updated its procedures since its last inspection, that it had abandoned its tracking system and replaced it with an internally developed system, and that it no longer tracked recommended data elements; [Anti-Harassment Program] The OIG has developed an “Oversight Plan.” The report“Thus, in these cases, the FDIC is rolling back the progress it had made in response to its previous recommendations.”
Of the 2,812 FDIC employees who responded to the OIG survey, 191, or 7%, said they had been sexually harassed at the FDIC since April 20, 2019. However, the FDIC told the OIG that it had received only 34 sexual harassment complaints during that time period, indicating an underreporting of sexual harassment complaints at the FDIC.
In one instance, management “was aware of the harassment for several years (since at least 2018) but did not begin an investigation until employees reported being contacted by management.” [Wall Street Journal] June 2023.”
The watchdog also found at least four cases in which the Labor and Employee Relations Division, the Labor, Employment and Administration Division and management were aware of sexual harassment conduct by supervisors, managers and at least one executive, but failed to conduct sexual harassment investigations under the AHP.
“In three of the four instances, when we asked why an investigation had not been opened due to the lack of relevant supporting documentation, we were told that there was no appetite for an investigation because ‘essentially every supervisory examiner’ was involved in some way and it could open a ‘Pandora’s box’ for the FDIC and dig a big hole,” the OIG wrote.
Additionally, some of the people working on parts of the action plan that the FDIC has put together include: Reaction to the 2023 journal revelations — The allegation that “they are or have been the recipients of allegations of sexual harassment misconduct or retaliation” “undermines the overall efforts to improve culture, reduces trust in leadership, and creates the impression that FDIC leadership continues to tolerate inappropriate behavior, despite the intent and content of the action plan.”
Following its evaluation, the OIG made 24 recommendations to the FDIC to address its findings, including that the Chairman fully implement all provisions of the FDIC’s AHP.
“We agree with all of the report’s recommendations and have made significant progress in addressing them,” an agency spokesperson told Banking Dive. “The FDIC is committed to implementing effective sexual harassment prevention programs.”
The FDIC has until March 31, 2025 to implement the remediation measures.
FDIC Chairman Martin Grunberg has offered to resign following a third-party report into the agency’s culture. Christy Goldsmith Romero has been nominated for the role and has testified before the Senate Banking Committee, but her confirmation vote has not been scheduled.
