FDIC hires Cleary Gottlieb to investigate workplace misconduct
The Federal Deposit Insurance Corp. announced Monday that it had retained law firm Cleary Gottlieb to undertake a third-party investigation into allegations of workplace misconduct that came to light last month.
Bloomberg News
WASHINGTON — A special committee of the Federal Deposit Insurance Corp. Monday announced it would hire Cleary Gottlieb Steen & Hamilton to conduct an investigation of the agency’s workplace culture after former FDIC staffers made allegations of harassment at the bank regulatory agency.
“The Special Committee is committed to an independent and thorough review,” said committee co-chair Michael Hsu. “There is no question that the Cleary Gottlieb team has both the experience and the expertise to lead this review.”
The investigation will be led by the former Acting U.S Attorney for the Southern District of New York Joon H. Kim, as well as attorneys Jennifer Kennedy Park and Abena Mainoo. The firm will investigate the agency’s workplace culture and employee conduct, including any behavior that could be deemed retaliatory or discourage employees from reporting misconduct, according to a press release from the special committee.
A November article in the Wall Street Journal detailed extensive misconduct alleged to have occurred at certain FDIC field offices, including allegations of hostile, abusive, unprofessional, or inappropriate conduct, and ineffectual managerial responses to that harassment and misconduct.
FDIC Chairman Gruenberg had initially launched an agency-wide review by another law firm to investigate. However, Republican FDIC board members Jonathan McKernan and Vice Chairman Travis Hill argued soon after that Gruenberg should not oversee the investigation after another investigative WSJ piece appeared to accuse the FDIC Chairman — the longest serving FDIC board member in history — of being slow to address misconduct allegations internally.
But Hill also had a potential conflict of interest in that he would take over as chairman if Gruenberg were to resign or be fired, noted financial reform advocates like Better Markets CEO Dennis Kelleher.
The FDIC Board of Directors ultimately opted to exclude Hill and Gruenberg from direct oversight of the review, scrapped the deal that Gruenberg had brokered and established a Special Committee to provide direction to and oversee the third-party review.
The Cleary Gottlieb team will conduct the independent review under the direction and oversight of the Special Committee.
Cleary Gottlieb has conducted previous investigations into workplace misconduct, notably having probed sexual harassment allegations involving former New York Governor Andrew Cuomo for the New York State Attorney General’s Office.
The Special Committee also encouraged both current and former FDIC employees who may have any information about observed sexual harassment or other misconduct at the FDIC to share their experiences with the Cleary Gottlieb team, who has established a telephone hotline and email address to collect tips.
