Federal Deposit Insurance Corporation chair Martin Gruenberg announced last week that he will resign his post following revelations that the agency was awash in sexual harassment under his leadership. The news came as a blow to some of the same congressional Democrats who championed the #MeToo movement, with Sen. Elizabeth Warren (D., Mass.) pushing Gruenberg to stay in his post and deny Republicans "a veto over bank policy."
In 2017, Warren called for the immediate resignation of her former colleague, Sen. Al Franken (D., Minn.), after a photo surfaced of him groping a female radio host. The year after, Warren pushed federal authorities to enact policies to prevent sexual harassment in the banking industry. Warren was unfazed, however, at the allegations of sexual harassment at the FDIC, which oversees thousands of banks across the country.
Warren organized a behind-the-scenes effort to help defend Gruenberg following the release of a scathing, 174-page third-party report in April that showed he contributed to an atmosphere of bullying that enabled widespread "sexual harassment, discrimination, and other interpersonal misconduct" to run rife at the FDIC during his several leadership stints beginning in 2005.
As part of that effort, Warren dispatched several of her former top aides to coach Gruenberg ahead of a May 15 House hearing, Semafor reported. Publicly, she urged the embattled FDIC chair not to resign from his post, saying his departure "would give Republicans a veto over bank policy."
Indeed, Gruenberg’s removal from the FDIC would put Democrats in a political bind. Without a replacement, the agency’s board of directors would be deadlocked, with an even split of Democrats and Republicans.
Rep. Maxine Waters (D., Calif.), the ranking member of the House Financial Services Committee, also came to Gruenberg’s defense. She railed against the report in a May 9 statement, saying it ignored the conduct of the FDIC’s two previous Republican chairs as well as the "favorable ratings" Gruenberg has garnered from FDIC employees. She reiterated her public support of Gruenberg during her committee’s May 15 hearing.
Waters’s comments are a far cry from her rhetoric during the height of the #MeToo movement. In 2017, she said former Fox News host Bill O’Reilly "needs to go to jail" and called the network a "sexual harassment enterprise" after reports surfaced that the host had paid out several settlements to women who accused him of sexual harassment.
Other progressive activists expressed concerns about the political risk of Gruenberg’s untimely departure from the FDIC.
"There’s plenty of blame to go around," said Dennis Kelleher, the president of the progressive think tank Better Markets. "This is outrageous, but to attack the Democrat only, which has the inevitable result of stalling this important work, is so clearly partisan politics."
The spirited defenses from Warren and Waters did not win over all Democrats. Senate Banking Committee chairman Sherrod Brown (D., Ohio) on May 20 called for "fundamental changes at the FDIC" to fix the agency’s "toxic culture," beginning with new leadership. But Brown stopped short of explicitly calling for Gruenberg to resign.
Hours later, Gruenberg announced he would resign from his post but only after the Senate confirms his successor.