FDIC released independent report on review of workplace culture, alleged misconduct at the agency

The Federal Deposit Insurance Corporation (FDIC) released a report this week reviewing the working place culture at the FDIC and allegations of harassment.

The review, done by Cleary Gottlieb, an independent third-party, reviewed allegations of sexual harassment and other interpersonal misconduct at the FDIC.

The independent review, the report said, found that, for 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. Further, it found that management’s responses to allegations of misconduct, as well as the culture and conditions that gave rise to them, have been insufficient and ineffective.

The review was overseen by a Special Committee of the FDIC Board of Directors.

“Today’s report establishes the urgent imperative of a culture transformation at the FDIC led by those with the leadership capacity to effectuate that change,” Special Committee co-chair Jonathan McKernan said. “The report marks an important first step towards healing, repair, and sustainable change at the FDIC. Fostering an environment that promotes a safe, respectful, and inclusive workplace is fundamental to achieving the agency’s mission.”

For the review, over 500 FDIC current and former employees shared their stories with Cleary Gottlieb as part of the independent review.

Cleary Gottlieb was asked to conduct a review of allegations of sexual harassment and other interpersonal misconduct at the FDIC and management’s response to such harassment and misconduct, as well as the FDIC’s workplace culture. Cleary Gottlieb was not asked, nor did it assess, whether particular individuals within the FDIC, such as the chairman, should be removed or otherwise disciplined for alleged misconduct. Any decisions on those subjects can only be made by those who have the requisite authority, following the appropriate process.

In its role overseeing the independent review, the Special Committee prioritized the credibility, effectiveness, and independence of the review process.

“The review was thorough, balanced, focused, and nonpartisan,” Special Committee co-chair Michael Hsu said. “It put the people of the FDIC first and focused on identifying root causes. The Cleary Gottlieb team brought professionalism and expertise to the review process, and that is reflected in the report they produced.”

The Special Committee appointed three non-voting members to join the committee. The three non-voting members brought a wealth of banking, regulatory, executive, and leadership experience that greatly assisted the committee. The Special Committee extends its thanks to Elizabeth McCaul, Linda Miller, and Valerie Mosley for having agreed to assist the Special Committee and the FDIC on this work.

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