February 28, 2024

Opinion: Frisky business and backdoor bank bailouts brought to you by the finance bros at the FDIC

By Joni Ernst

There are no polite words for how angry I am right now … or the reasons why! The recent revelations about the workplace culture of the Federal Deposit Insurance Corporation (FDIC) — where raunchy, racist and all-around reprehensible behavior is not only tolerated but even rewarded — are appalling. In installment after installment, The Wall Street Journal is telling the personal accounts of more than 100 current and former FDIC employees, most of whom are women, and detailing the long and ongoing history of sexual harassment and discrimination at the banking regulator. The abuse is too extensive, and explicit, to detail here, but includes sleazy suggestions and inappropriate innuendo from supervisors. Lewd photos texted from senior execs. Pressure to drink, sometimes while working! A party atmosphere pervades the FDIC, where puking off an agency rooftop is a rite of passage. But rather than putting an end to the drunken debauchery and despicable behavior, the agency is paying out hundreds of thousands of tax dollars in settlements for managerial misconduct to aggrieved employees and simply shuffling the bad boys to other departments to avoid any real discipline.

The FDIC’s Chairman Martin Gruenberg claims he wasn’t “generally aware” of the toxic environment within the agency he oversees and has been part of for nearly two decades. In sworn testimony before Congress, Gruenberg initially denied being investigated for his own hostile and inappropriate behavior, even though he was! Instead of taking responsibility, the FDIC chairman is putting together a “special committee” to look into the allegations.

A review already was conducted in 2020 by the agency’s own Office of Inspector General, which issued a warning that “the FDIC should do more to prevent and address sexual harassment.” At that time, ten percent of the FDIC workforce divulged they had been sexually harassed, with many fearing retaliation if they dared to report the incidents. The FDIC disagreed and took exceptions with the conclusions, and apparently, nothing changed. All while the FDIC was allowing this frisky business to go on within its own walls, it was failing at its mission of monitoring the risky business of banking institutions. Three of the four largest bank failures ever happened just this year! The result is a backdoor bailout for the banks by the Biden administration. The FDIC admits it could have “acted sooner and more forcefully” to prevent the collapse of one big bank and “done more” to head off the failure of another.

Folks, I have zero percent interest in hearing any more excuses. The management of the FDIC has proven itself incapable of supervising both the banking system and the boorish behavior of its own bureaucrats. That is why I am giving my November 2023 Squeal Award to the chairman of the FDIC and calling on him to resign immediately. I am also demanding any allegations or findings of possible wrongdoing by employees of the agency be turned over to the Department of Justice and local law enforcement for investigation and potential prosecution. The finance bros at the FDIC can take this to the bank: If they want to act like pigs, then I’m going to make ‘em squeal!

Joni Ernst, a native of Red Oak and a combat veteran, represents Iowa in the United States Senate.