Sen. Joni Ernst, R-Iowa, is asking the Office of the Inspector General for the Federal Deposit Insurance Corp. to respond to what she says are allegations of financial mismanagement, fraud and misconduct at the watchdog agency.
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"If [the allegations are] true, there has been a complete and total failure of oversight and accountability within the FDIC OIG, which necessitate urgent reforms, up to and including the dismissal of several of your subordinates for cause, at minimum," Ernst wrote. "Criminal referrals for timecard theft and fraud may also be warranted."
Ernst said in the letter that whistleblowers had informed her office that the inspector general's office engaged in frivolous spending, diverting congressionally allocated Deposit Insurance Fund money for personal expenses under former Deputy Inspector General Tyler Smith.
The letter alleges that an OIG official fraudulently assigned himself temporary duty in multiple cities to cover personal travel costs and improper mass purchases of ballistic helmets, defective shields, iPads and unnecessary travel bags.
"Whistleblowers have revealed that supervisors are allegedly misusing congressionally allocated DIF funds to finance personal vacations, falsely labeling them as official duty-related travel," the senator wrote. "This manipulation also allowed him to sidestep personal travel expenses, effectively subsidizing his unauthorized living arrangement in Florida, rather than at his designated duty station in Arlington, Virginia."
The letter also highlights reports of a toxic workplace culture, arguing that the cultural issues identified by the OIG at the FDIC have infected the culture of the watchdog as well.
"It would be one thing if the allegations stopped at poor financial management, but it seems the toxic culture of retaliation, fear, and abuse, which was a hallmark of former Chairman Gruenberg's reign over the FDIC has permeated your organization as well," Ernst said. "Multiple whistleblowers reported instances of retaliation against FDIC OIG employees who raised concerns about management decisions and spending."
According to Ernst's letter, whistleblowers reported retaliatory actions against employees who spoke out. The senator further said that after OIG's senior management were informed of some of the issues raised by whistleblowers, Fain and other leadership did a "tour" of the various OIG field offices to assess the workplace culture on the ground in each locality. Ernst protested what she described as a lack of corrective action taken in response to the allegations or retaliation and asked Fain to explain what the agency had done to hold perpetrators of fraud accountable.
The letter alleges that some FDIC OIG officials engaged in locality pay fraud by claiming to work in high-cost areas while actually residing in lower-cost regions. The lawmaker said one employee allegedly moved to Florida in 2021 but continued to claim Washington, D.C., locality pay, which would have resulted in a higher salary than the staffer was entitled to. She also questioned the creation of a Miami OIG office, which she said appears to have been established to accommodate a senior official's personal relocation rather than operational need.
Ernst demanded a detailed briefing on the FDIC OIG's response to whistleblower allegations, including an accounting of the financial impact of alleged locality pay fraud. The lawmaker said she wants more details on actions taken after a recent regional office review, a plan to investigate those responsible for financial mismanagement and justification for the Miami office's creation and leadership appointment.
"These allegations were relayed to my office separately, as well as considerable documentation from each of the whistleblowers," she wrote. "To restore trust and confidence in your leadership of the FDIC OIG, I invite you personally to provide a briefing as soon as possible, but no later than May 2, 2025."
