'Not Sure Why You're So Afraid Of Him...': Huizenga Grills Witness On Defense Of Embattled FDIC Head

4 months ago

During a House Financial Services Committee hearing last week, Rep. Bill Huizenga (R-MI) spoke about a witness' comments in defense of FDIC head Martin Gruenberg.

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Transcript

00:00The gentleman's time has expired.

00:01The chair will now recognize himself for five minutes.

00:06Ms. Manoux, I have a question for you.

00:08I've just been kind of hearing between the lines from a lot of my colleagues on the other

00:12side about, it seems like they seem to think your report was somehow incomplete.

00:17Was it incomplete?

00:18No, our report—

00:20Was it biased?

00:22It was not biased.

00:23Was it sensationalized?

00:25It was not sensationalized.

00:27So you believe it's an accurate reflection of the leadership and the culture of what

00:31was happening at the FDIC?

00:34We do.

00:35Okay.

00:36I will note, by the way, that we had a woman chair of the FDIC, the last chair of the FDIC.

00:43Mr. Sue helped remove her.

00:47So when it comes to equity, we had that.

00:53So I do want to say as well about the report, Ms. Manoux or Mr. Kim, a number of the allegations

01:04seem to be sort of saying, well, only there was a focus on one particular chair, the current

01:10chair.

01:11My reading of the report is that former chairs, two women, by the way, were only mentioned

01:17in the report for the work that they did attempting to improve the agency culture.

01:22Is that accurate?

01:27We make very clear in the report that the workplace culture and conduct issues were

01:31longstanding.

01:32They were longstanding.

01:33And who was attempting to fix it?

01:37All chairs have taken steps to seek to address them.

01:41I understand your delicate position, Mr. Kim, but the simple fact is that you had an open-ended

01:48report.

01:49There was not problems with the other two female chairs.

01:52There was a problem with this chair.

01:54So I'm going to move on.

01:55A few weeks ago, the FDIC reported a board of directors terminated the Special Review

02:00Committee, leaving an agency to handle matters of the independent review internally.

02:04The board of directors of the FDIC is supposed to set policy, oversee management, and protect

02:09the interests of employees.

02:13Director McKernan, what is the role of the board in the day-to-day operations of the

02:16FDIC?

02:17You were starting to say you were advocating for that.

02:19When we terminated the Special Review Committee, I was of the view that we really need to have

02:23the board step up and take a more active role during this interim.

02:26One way to do that would be to establish a board committee, only independent directors,

02:29not representative management directors, to oversee implementation of the action plan.

02:34Sorry, if Chairman Gruenberg didn't see the cultural problems at the agency for 10 of

02:39his 13 years as chairman, shouldn't the board be playing a bigger role in overseeing that

02:45cultural change?

02:46That is my view.

02:47Okay.

02:48And what specifically can the board do?

02:50One option would be to establish a board committee.

02:52Okay.

02:53But that appears to be rejected by Mr. Hsu.

02:56Mr. Hsu, is that correct?

02:59I believe the full board needs to be fully engaged in order to back the actions so that

03:03the actions that are taken to fulfill the recommendations are long-lasting, they're

03:07taken now, they're conducted in full.

03:09All right.

03:10So, based on the whistleblower reports both before and after the report, Chairman Gruenberg

03:15has not been protecting FDIC employees.

03:18They don't have confidence in him.

03:19In fact, I think there was a Wall Street Journal article that literally the title was, he survived

03:24a beatdown from Congress, but can he survive one from his own staff?

03:29Director Hsu, do you still believe, as you testified in May, Chairman Gruenberg can restore

03:33trust at the FDIC and lead changes in the culture during the remainder of his time?

03:37And as I said in my opening, is he the right man, the right time, with the right ideas?

03:43My focus is on the employees of the FDIC.

03:46Is he the right person to lead this?

03:49So long as the chairman is delivering on commitments and taking actions, I'm supportive.

03:55I'm taking that as a yes.

03:57I'm taking that as a yes.

03:59It's conditional on taking those actions.

04:02Okay.

04:03So, that's a conditional yes.

04:05I'm just not sure why you're so afraid of him, quite honestly, and why you can't admit

04:11an obvious truth.

04:13That is disappointing because I know, and I believe you know, that the FDIC employees

04:19would disagree with you, that he is not the right person to be leading this.

04:25So Director Hsu, I think it's finally time to become more active director.

04:29I think that your time and certainly your efforts in removing the last female chair

04:36of the FDIC for what many of us believe was certainly far less than anything that is being

04:42accused or is being alleged right now, you know, when you — it's hard to view that

04:49as not for being for political purposes.

04:52And I'd say it's time for you to step up and for you to be able to change that.

04:57Let's do what's good for the employees.

05:00I have been completely focused on trying to establish three actions that are critical

05:05to reestablishing trust with the employees of the FDIC.

05:07My time is expiring, but you also need to remove the chairman.

05:10So with that, I yield back.

'Not Sure Why You're So Afraid Of Him...': Huizenga Grills Witness On Defense Of Embattled FDIC Head

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