By Douglas Gillison
WASHINGTON, July 22 (Reuters) – The U.S. Federal Deposit Insurance Corporation over the past 18 months has disciplined eight employees, including forcing out a senior manager, after officials determined that allegations of sexual harassment against them were credible and merited action, according to agency officials and records obtained by Reuters.
The disciplinary actions, which Reuters is reporting for the first time, show the bank regulator is acting on promised changes more than two years after a sexual harassment and discrimination scandal triggered congressional scrutiny and sweeping reforms, although experts said more evidence was needed to determine if those reforms are taking hold.
The FDIC’s actions, which include four firings, two suspensions and two resignations in advance of dismissals, point to a break with the past.
An independent review, commissioned after the scandal, had found the agency’s previous anti-harassment program suffered from systematic record-keeping failures, while investigators said they found no indication that anyone was fired for harassment of any kind between 2015 and 2023. The agency has also said it has no reliable numbers prior to 2025.
The FDIC scandal erupted under Democratic former President Joe Biden, and some lawmakers questioned whether the Trump administration — which has slashed the federal workforce and fired government watchdogs — would follow through on reforms adopted under the agency’s prior leadership.
In response to Reuters queries, the FDIC said in a statement that it was “deeply committed” to individual accountability and an improved workplace culture.
PROFESSIONAL CONDUCT OFFICE TAKES ACTION
The FDIC’s Office of Professional Conduct, created in June 2024 as a result of the scandal, has since January 2025 fired three employees and suspended a fourth for 60 days, according to a list of disciplinary actions for sexual harassment that Reuters obtained this month via the Freedom of Information Act.
A senior agency executive facing two allegations of sexual harassment, which officials determined were sufficiently credible to require action, also quit before being fired, according to the list, which covers January 2025 through early July 2026.
Another staff member was suspended and a seventh also left the agency prior to a proposed termination, FDIC officials said, although those actions were not included in the OPC list because they originated before the office was created.
An eighth employee was fired for sexual harassment after the FDIC released the list to Reuters on July 2, officials said.
The agency did not disclose identifying information about the employees or details of the alleged harassment in each case, nor did it provide data on how many complaints of sexual harassment the agency had received during that period.
While comparisons across agencies are difficult, given the lack of a requirement to disclose disciplinary actions, Reuters has reported that the Federal Reserve Board, with a workforce about two-thirds the size of the FDIC’s, disciplined nine employees — firing four — for sexual harassment over the four years from 2020 through 2023.
FDIC NOW A ‘MARKEDLY DIFFERENT’ AGENCY
The FDIC was rocked in 2023 by a Wall Street Journal report that revealed widespread misconduct.
A subsequent 2024 investigative report by the law firm Cleary Gottlieb cited accounts from more than 500 people who described sexual harassment, racial discrimination and bullying at every level of the agency going back years, which the report said was tolerated by senior managers.
According to the agency, much has changed in only a short time.
“The agency today is markedly different from a few years ago, with significant leadership changes across the organization and a completely revamped process for investigating misconduct and imposing discipline,” the FDIC said in its statement to Reuters.
In addition to the OPC and Office of Equal Employment Opportunity, which the FDIC also created in June 2024, the regulator has hired new senior managers, adopted new policies on retaliation, workplace personal relationships and anti-harassment training, it said.
The agency operated an anti-harassment program prior to the scandal, but the Cleary report said it had never had a reliable, comprehensive system for tracking misconduct cases over time.
Jennifer Griffith, a professor of organizational behavior at the University of New Hampshire who has studied workplace sexual harassment, said it was too soon to say whether the FDIC is achieving meaningful cultural change, which takes more than firing people.
“It takes consistent and sustained evidence in the lived experiences of employees that misconduct is truly no longer tolerated,” she wrote in an emailed reply to Reuters queries.
The Cleary Gottlieb review cited accounts of bullying and verbal abuse by then-FDIC Chair Martin Gruenberg, who had served at the top of the agency for 20 years. He said at the time that he did not recall the alleged incidents involving himself, but that he found the report’s overall findings troubling. He apologized to staff and vowed to take swift action.
Reuters was unable to reach Gruenberg for comment.
Gruenberg stepped down after months of congressional pressure and was succeeded in January 2025 by FDIC Vice Chair Travis Hill, a Republican who was later formally nominated for the position by President Donald Trump.
During October 2025 congressional testimony, Hill pledged to continue pursuing reform efforts. He provided data to lawmakers the following month on disciplinary actions for fiscal 2025, although it did not specify which dismissals or resignations involved sexual harassment.
(Reporting by Douglas Gillison in Washington; Editing by Michelle Price and Edmund Klamann)
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