WASHINGTON — The board of directors for the Federal Deposit Insurance Corp. on Wednesday tapped Morrison Foerster LLP lawyer Carrie H. Cohen to act as an external overseer of the agency's ongoing cultural overhaul in the wake of a workplace scandal.
"Ms. Cohen has extensive experience with monitorships through her service on a monitorship team in private practice and prior roles in which she helped design monitorships, both in private practice and in government," an FDIC release noted. "Ms. Cohen will audit the FDIC's ongoing efforts to implement its Action Plan for a Safe, Fair, and Inclusive Work Environment, including recommendations from an independent third-party review of the agency's workplace culture, and report monthly to the Board and employees."
The FDIC says it appointed Ms. Cohen — who spearheads Morrison Foerster's diversity equity and inclusion initiatives — as transformation monitor after a competitive process. The board reviewed all submissions from law and consulting firms and conducted interviews to finalize their choice.
Ms. Cohen — who earned her B.A. from Cornell University and her J.D. from the University of Pennsylvania Law School — developed and monitored workplace culture reforms as special counsel to the New York City Council. At the New York State Attorney General's office, she designed and enforced monitorships for cases involving systemic harassment and discrimination, including overseeing a longstanding labor union monitorship related to racial and national origin discrimination.
The FDIC has been embroiled in a workplace scandal that came to light late last year after the Wall Street Journal published an investigation detailing numerous instances of sexual harassment and racial prejudice at the agency spanning decades. The FDIC established a special committee to investigate these claims as a response, appointing FDIC Board Members Michael Hsu and Jonathan McKernan to lead the investigation. Law firm Cleary Gottlieb Steen & Hamilton was ultimately tapped to undertake the independent review, whose results were published last month, largely corroborating the findings of the Wall Street Journal investigation.
Cleary Gottlieb's findings portrayed a culture characterized by patriarchy and insularity, with reports of discrimination and harassment, particularly from female employees and individuals belonging to marginalized groups.
While current FDIC Chairman Martin Gruenberg was not accused of sexual misconduct or harassment, the report detailed instances where Gruenberg yelled at and berated subordinates but did not explicitly call for his ouster. Despite the report's findings, Gruenberg retained his position and participated in subsequent hearings in both congressional chambers. However, pressure began to mount for the chairman as Senate Banking Committee Chair Sherrod Brown publicly called for new leadership at the FDIC, leading Gruenberg to announce his intention to step down.
Gruenberg said in May he would resign from the agency when the White House nominates and the Senate confirms a replacement. In opening remarks, McHenry called Gruenberg's conditioning of his resignation on the presence of a replacement as insufficiently urgent, considering the severity of the allegations brought against the agency.
The White House has nominated Commodity Futures Trading Commission member Christy Goldsmith Romero to lead the scandal-embroiled agency. Goldsmith Romero's confirmation hearing was held on July 11, but the Senate Banking Committee has yet to schedule a vote and the window for confirmation before November's election is narrow and rapidly closing. Democrats had aimed to advance Goldsmith Romero's nomination before the August recess, but the confirmation will now have to happen in the crowded fall session or lame duck session — neither of which is assured.
