Cleary Gottlieb Report Finds Years of Sexual Harassment at the FDIC as Four Employees Are Fired and Gruenberg Leaves
The Federal Deposit Insurance Corporation published a 234-page independent review on May 7, 2024, that described years of sexual harassment, discrimination, and retaliation inside the bank regulator. The law firm Cleary Gottlieb Steen & Hamilton spent five months on the file after Wall Street Journal reporting in 2023. More than 500 people, most of them current employees, described what they had seen. Investigators wrote that the agency had failed to provide a workplace safe from harassment and that evidence of retaliation against people who reported supervisors had sat largely untouched. The problems, the firm said, predated any one chairman. The report also documented Chair Martin Gruenberg’s reputation for losing his temper at work and questioned whether he had the “moral authority” to lead a cultural overhaul.
The Cleary report is posted on FDIC.gov. Special Committee co-chair Jonathan McKernan called it “the urgent imperative of a culture transformation.” Gruenberg, a Democrat with nearly two decades at the agency, called the portrait “sobering,” apologized to “hundreds of employees who reported painful experiences of mistreatment,” and accepted responsibility. Many who spoke to investigators had asked to stay anonymous until the pages were public. House Oversight leaders James Comer, Lisa McClain, and Andy Biggs demanded to know why the White House had not already removed him. Roughly one in ten employees, the audit found, had complained of sexual harassment, discrimination, or other interpersonal misconduct. That ratio, inside an agency of several thousand people, is not a handful of bad apples. It is a pattern that survived multiple chairs.
Political consequences arrived in days. On May 20, 2024, hours after Senate Banking Chair Sherrod Brown, a Democrat, called for new leadership, Gruenberg said he would resign — but only after the Senate confirmed a successor. Republicans called that a stall. Had he left immediately, Republican Vice Chair Travis Hill would have become acting chairman, splitting the board 2-2 and likely freezing a Democratic push for tougher capital rules on the largest banks. House Financial Services leaders labeled the offer “too little, too late.” Some FDIC staff, in an anonymous letter, doubted senior management intended to do the work the report demanded. Sen. John Kennedy of Louisiana used a Senate floor speech to tell President Biden to fire Gruenberg outright rather than wait for a confirmation calendar that might never move.
A Delayed Exit, a New Chairman, and Eight Discipline Cases
President Biden nominated Commodity Futures Trading Commission member Christy Goldsmith Romero to replace Gruenberg. The Senate did not confirm her. Gruenberg announced he would retire effective January 19, 2025, one day before President Trump’s inauguration. Hill became acting chairman on January 20, 2025. Trump later nominated him to the job. Hill was sworn as the 23rd FDIC chairman for a five-year term that began January 2, 2026, after serving as vice chairman since January 2023. The capital rewrite that Democrats had hoped to lock in never cleared the board. Bank lobbyists noticed. So did the staff who had been told that culture change could not wait for an election.
Hill told the Senate Banking Committee in October 2025 that reform would continue. Kennedy, who had threatened to hold the nomination, released an FDIC culture-transformation report in November 2025 describing steps the agency said it was taking. That document claimed 26 employees linked to verified misconduct were no longer at the FDIC and that a workforce realignment had cut more than 1,300 positions. Those numbers mix harassment cases with broader attrition and hiring freezes. The harassment-specific tally arrived later, after reporters asked for lists instead of talking points.
Reuters, in an exclusive published July 22, 2026, reported the concrete count since January 2025: four employees fired for sexual harassment, two suspended, and two who resigned ahead of dismissal — eight cases in 18 months, including a senior manager. The Office of Professional Conduct, created in June 2024 because of the scandal, had by then fired three workers and suspended a fourth for 60 days, according to a disciplinary list obtained under the Freedom of Information Act. The FDIC said it was “deeply committed” to individual accountability. A January 6, 2026, equal-employment statement over Hill’s signature pointed staff to that office and to the inspector general hotline. Whether eight closed cases match a report built on more than 500 interviews is the question staff still ask in hallways the public cannot enter.
The FDIC is not a campus human-resources office. It is the agency that seizes failed banks, writes deposit-insurance rules, and sits across the table from the largest holding companies in the country. A workplace that tolerated harassment and retaliation is also a workplace that decides who gets a Matter Requiring Attention and who gets a pass. That is why the House hearing after the Cleary report was not only about office culture. Members asked whether an institution that could not police its own corridors could be trusted to police balance sheets. Gruenberg sat through that questioning. Hill inherited the cleanup and the suspicion that followed it.
The timeline matters because it shows how long “culture change” can be delayed when a chairman’s departure is tied to a confirmation fight. From the May 7, 2024, report to Gruenberg’s last day was more than eight months. From the first Journal stories in 2023 to the first wave of 2025 firings was longer still. The inspector general had flagged harassment concerns as far back as 2020, during Jelena McWilliams’s tenure, when Hill was already a senior official. Democrats later used that fact to argue that Republican outrage in 2024 was selective. Republicans answered that Gruenberg’s documented temper and the Cleary findings landed on his watch. Neither party produced a roster of every supervisor who had been protected by transfers, quiet retirements, or a decision not to write the memo.
What the public can see is a sequence. A newspaper series. A law-firm report. A chairman who apologized and stayed. A successor who created a conduct office and later published firings. A Senate that used a nomination as leverage for a progress memo. None of that returns years to the people who told investigators they had been groped, mocked, or iced out after they spoke. It does change the cost of being the next person named in a FOIA log. For a regulator, that cost is the only language some managers appear to understand.
The AEGIS Alliance files institutional misconduct on the U.S. News desk and in police accountability and crime news coverage, including a Lee County sheriff’s office accused of fabricating evidence and later reporting on how Boeing workers marked inspections complete without doing the work. An apology from a chairman is not a culture. Terminations that start after a 234-page report hits the internet are the first number that can be counted. Eight cases after hundreds of interviews is a start. It is not the end of the file the FDIC promised to close.
