The Federal Deposit Insurance Corporation’s (FDIC) inspector general plans to launch a “special inquiry” into how the agency’s leadership has handled allegations of sexual harassment and other inappropriate conduct in the workplace, the agency said Tuesday.

The new inquiry will “report on the leadership climate at the FDIC with regard to all forms of harassment and inappropriate behavior,” an IG spokesperson said. 

The watchdog will also review the FDIC’s efforts to reform its sexual harassment policies following a 2020 report from the inspector general’s office that found the agency’s policies lacking.

The increased scrutiny comes in the wake of a series of reports from the Wall Street Journal detailing employee complaints about a toxic work environment at the agency rife with sexual harassment and misogyny.

Several former female employees told the Journal that male colleagues at the FDIC made inappropriate, sexualized comments to them or about them and felt they were repeatedly passed over for assignments and denied opportunities to advance.

FDIC Chair Martin Gruenberg said at a hearing earlier this month that he was “personally disturbed and deeply troubled” by the reports and noted that the agency was launching a “comprehensive review” into the allegations.

“Let me underscore, I have no higher priority to ensure that all FDIC employees work in a safe environment where they feel valued and respected,” Gruenberg said.

However, a follow-up report by the Journal raised questions about the FDIC chair’s management, suggesting that he and other top agency officials had failed to address bad workplace behavior over the years.

In the wake of the reports, the top Republican members of the House Financial Services Committee, including Chairman Patrick McHenry (R-N.C.) and Subcommittee Chairmen Bill Huizenga (R-Mich.) and Andy Barr (R-Ky.), said they were launching an investigation into the allegations and the potential impact on “the safety and soundness of the banking system.” 

The FDIC, which insures depositors in American banks, also came under scrutiny earlier this year in the wake of the high-profile failures of Silicon Valley Bank, Signature Bank and First Republic Bank.

Sheila Bair, who served as head of the agency from 2006 to 2011, told the Financial Times on Monday that the issues at the FDIC need to be “dealt with swiftly.”

“A top priority of the agency right now … is making sure they are operationally prepared,” Bair said. “And so, I think that really needs to be a laser focus — restoring employee morale, energizing employees again.”

“People are not feeling good about the FDIC right now, and that breaks my heart,” she continued. “When I left in 2011, we were at the top of the best places to work. Morale was high. Turnover was low. It was really an energized agency. That is the agency I know, and that is the agency that the FDIC can be again.”

While Bair acknowledged that one possible scenario could be the ouster of Gruenberg, she also said more investigations and fact finding were needed before making changes to the agency’s leadership, according to the Financial Times.

Updated at 5:59 p.m. Riley Gutiérrez McDermid contributed.