Ernst Demands Answers After Whistleblowers Accuse Management of Shocking Waste at Watchdog Agency
WASHINGTON – After whistleblowers asserted the Federal Deposit Insurance Corporation (FDIC) Office of Inspector General (OIG) leadership made a series of wasteful and ill-advised financial decisions, U.S. Senator Joni Ernst (R-Iowa) is demanding answers from the watchdog agency.
The allegations range from using federal funds for personal vacations under the guise of work trips, sweeping locality pay abuse, and even that a manager routinely used a “mouse-jiggler” to fake the appearance of work.
“As the following allegations illustrate, under then-Deputy Inspector General Tyler Smith’s guidance, the distinction between ‘growth’ and reckless spending appears increasingly blurred. Moreover, a series of wasteful and ill-advised financial decisions allegedly have placed your agency in a dire financial position, leading to decisions that reportedly have hindered its core investigative function,” wrote Ernst.
Click here to view the letter.
Background:
Ernst has doggedly investigated allegations of wrongdoing at the FDIC, the agency the FDIC OIG is tasked with conducting oversight of, and was one of the first senators to call for FDIC Chair Martin Gruenberg’s resignation following reports of sexual harassment and discrimination at the agency.
In November 2023, she followed up by conducting critical oversight of this behavior at the FDIC and demanding any evidence of criminal wrongdoing by agency employees be turned over to the Department of Justice and local law enforcement for potential prosecution.
After a third-party investigation into the FDIC’s workplace culture, Ernst called for real consequences and the Department of Justice to investigate the agency from top to bottom. Even after this report, the Biden administration refused to immediately remove FDIC Chair Gruenberg.
In April 2024, Cleary Gottlieb Steen & Hamilton LLP (Cleary Gottlieb), the firm hired to investigate FDIC’s workplace issues, released its report documenting over 500 allegations of harassment and other egregious behavior and revealed one in ten FDIC employees reported some form of misconduct.
However, Cleary Gottlieb was precluded from directly investigating claims of misconduct to hold perpetrators accountable, instead focusing on policies and shortfalls giving rise to the culture. In November 2024, Ernst demanded that the FDIC investigate the more than 500 allegations of misconduct and harassment.
###