Within a 234-page report on the workplace at the Federal Deposit Insurance Corporation (FDIC) is what could be the next big headache President Joe Biden will have to face ahead of the 2024 election.
Following a 2023 Wall Street Journal report detailing widespread sexual harassment in the workplace, law firm Cleary Gottlieb Steen & Hamilton was tapped with investigating the FDIC. Their May 7 report details how 500 individuals, close to one-in-ten employees at the entire agency, reported experiencing “sexual harassment, discrimination, and other interpersonal misconduct” in the workplace to the firm’s tip line.
In the aftermath of the report, Biden-nominated FDIC Chairman Martin Gruenberg resigned, but the scandal could continue to cause trouble for the president as he battles low poll numbers, experts told the Daily Caller.
“Joe Biden had a chance to take a bold action and show he cares about how women are treated in the workplace and cares about whistleblowers. But he cowardly hid behind his press secretary, who completely forgot this pledge that Biden had made to fire anybody who acted in this way,” Republican strategist Mark R. Weaver told the Daily Caller.
When he took office, Biden publicly promised to fire anyone he worked with who “treated another colleague with disrespect.”
In Jan. 2021, President Biden promised he would fire anyone on the spot who “treated another colleague with disrespect.”
A new report details the FDIC Chair’s abusive behavior and reveals the agency is rife with sexual harassment & discrimination. Yet, Biden refuses to act. pic.twitter.com/b21iUXeF0k
— Oversight Committee (@GOPoversight) May 9, 2024
“Once Senator John Kennedy questioned this FDIC chair the other day in committee and tore him apart, it became pretty clear that he would have to leave. Even then Joe Biden didn’t fire the guy. Instead, he resigned,” Weaver continued.
Despite Gruenberg’s departure, the issue could continue to plague Biden due to the issue of union protections for FDIC employees. Biden has cast himself as a champion of union labor during his decades-long political career. The issue is further complicated by Democrats’ outspoken opposition to former President Donald Trump’s proposal to make sweeping cuts to the federal bureaucracy.
The firm outlined in its report how the FDIC was responding to reports of harassment and discrimination as well as how it was administering discipline. The report notes that the FDIC would first turn to an employee warning.
But for unionized employees, however, the disciplinary process is different. (RELATED: Burgeoning Sex Scandal Pits Biden Against His Biggest Backers At Critical Moment)
“For bargaining unit employees, counseling or warning letters may not be used as evidence for progressive discipline, and are normally removed from an employee’s file no later than one year after the date of issuance absent a legitimate administrative need,” the report states. Such union protocols appear to make it harder to discipline or remove employees who face harassment allegations, the Wall Street Journal Editorial Board wrote.
Lisa Bloom, a sexual harassment lawyer, expressed dismay at how the union was protecting potential bad actors within the FDIC.
“The conclusion would be and should be that anyone who engages in sexual harassment should be fired. Anyone who covers it up should be fired. People need to feel comfortable in their workplace, that they’re not going to be sexualized and subjected to pornography,” Bloom told the Caller.
“When there’s a problem that’s this deep and entrenched there really needs to be a major house cleaning. And again, I think that starts at the top, but should filter all the way down,” she continued, adding how shocked she was to see the union protecting potential bad actors.
The report noted that the incidents it highlighted “did not occur in a vacuum,” rather the conduct at the FDIC was the result of a “misogynistic,” “patriarchal,” “insular” and “outdated” workplace. Throughout its written investigation, investigators pulled out examples of the complaints employees lodged.
“An employee reported to us that a former executive in headquarters grabbed her and rubbed himself on her after a happy hour,” the report said.
“A woman examiner reported on the shock of receiving a picture of an FDIC senior examiner’s private parts out of the blue while serving on detail in a field office, only to be told later by others in that field office that she should stay away from him because he had a ‘reputation,’” another part of the report reads.
The report continues to connect the lack of discipline to the union in a “delicate” way, Maxford Nelsen, the Freedom Foundation’s Director of Research and Government Affairs, told the Caller. The union’s involvement in protecting bad actors could be hard for the president to admit, he added.
“The internal dysfunction at the FDIC exhaustively documented in the Cleary report appears to stem from multiple sources,” Nelsen said. “But however uncomfortable it may be for the most pro-union administration in history to admit, it cannot be denied that federal collective bargaining laws and the unions representing FDIC employees played at least some role in shielding bad actors from accountability as well as impairing or even deterring attempts to rein in the agency’s toxic workplace culture.”
Andrew Holman, a policy analyst with the Commonwealth Foundation, echoed Nelsen’s comments, adding that the report exposes the “widespread issue with unions.”
The firm noted in its report that it was required to follow union protocols put in place at the FDIC.
“For bargaining unit employees, we informed them whether they were being interviewed as potential subjects or witnesses, of their right to union representation at the interview should they reasonably believe the interview may result in disciplinary action against them, and that the interview would be scheduled to allow them an opportunity to seek the counsel of a union representative if they wished to do so,” the report notes.
The report puts Biden at a crossroads, Weaver told the Caller.
Throughout his career, Biden has notoriously been pro-union, joining the picket line with striking members and earning endorsements in the 2024 election. The president has also been a supporter of the “#MeToo” movement. In the first year of his administration, Biden signed a bill into law that prohibited confidentially agreements from being used to keep individuals speaking out about sexual harassment in the workplace. Biden also supported a measure that would allow sexual harassment victims to take action in the courts.
“Joe Biden has claimed that he’s a friend of the working person. He likes to point to his blue collar roots in Scranton, Pennsylvania, but nothing in the last half a century has shown that Joe Biden has any real allegiance to the working class,” Weaver began.
Some of the reported incidents at the FDIC included discrimination and fear of harassment from higher ups when issues were reported, the report notes.
“He’s a very wealthy person. He is mingled with mostly management and finance types and only really talks to working people when he has to for campaign events. And that bias of his towards people in power is showing up in his attitude towards an agency that should be treating its workers better whether they’re unionized and non-unionized,” Weaver continued on Biden.
The president is not just at odds with two groups he’s catered to before — Weaver also pointed back to Biden’s pledge to fire anyone who disrespected their colleagues.
“I’m not joking when I say this: If you’re ever working with me and I hear you treat another colleague with disrespect, talk down to someone, I promise you I will fire you on the spot,” Biden said in 2021 while swearing in staffers and appointees. “On the spot. No ifs or buts.”
White House press secretary Karine Jean-Pierre had nothing prepared to read during a May 14 press briefing when responding to whether the president had plans to fire anyone “on the spot.”
“So, I don’t have any personnel announcements to make at this time. The FDIC administrator — chairman, to be exact, made — apologized and spoke to this. And so, certainly, I would — I would send you there. The FDIC is an independent agency, so would refer you to them as to anything else coming out from the FDIC on this particular matter. But I just don’t have any policy — personnel announcements to make at this time,” Jean-Pierre said.
The scandal comes five months out from the election as Biden works to combat polls showing him trailing Trump across key swing states. The president has already been juggling his administration’s response to the Israel-Hamas war, concerns about his fitness for office and a low approval rating.
The timing of the FDIC report, Weaver told the Caller, could cause more problems for Biden.
“This report had a broader impact in Washington than it did across the rest of the country. But the more of these instances pop up and are reported, we could see more media coverage, and it’s one that doesn’t reflect well on Joe Biden and his leadership and legacy,” he said.
“Some of the things were minor, others were more heinous. And so in a large organization, you’re always gonna have some bad behavior. But this leader had to go, this director had to go, Joe Biden could have shown his own values, agenda and his own principles by firing him, but he missed an opportunity. And I think certainly folks who care about workers rights have noticed and whether or not they choose to communicate that to their grassroots followers, remains to be seen,” Weaver added.
