The Huffington Post had an impressive scoop this week: 56% of the staff working in the Federal Reserve's banking supervision and regulation division don't trust the agency's senior leaders.
But HuffPost pulled its punches by primarily blaming the lousy morale on Alan Greenspan, the Fed chairman who left the building in 2006.
"The shaky morale is a legacy of Alan Greenspan's 19-year term as Fed chairman," the article says. "From 1987 to 2006, the Greenspan Fed pushed for a hands-off approach by regulators, who then found themselves blamed for the financial crisis that led to the most punishing economic downturn since the Great Depression."
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The more likely villain here is Fed Gov. Dan Tarullo, whose been driving financial services policy at the central bank since early 2009. Sources routinely describe Tarullo as a bully who only listens to opinions that mirror his own.
The long piece – it runs more than 4,200 words – spotlights the results of a survey the Fed conducted of its banking supervision and regulation employees back in April. It mentions Tarullo, but it feels like the author is uncomfortable laying the blame on someone he sees as dedicated to cracking down on the largest banks.
"Employees said Tarullo has a view of what the financial system should look like, particularly with respect to large financial groups, and is focused on developing policy that closely matches his worldview," HuffPost says. "He can be a bully, people who work with him said, and he relies heavily on the opinions of Mark Van Der Weide and Anna Lee Hewko, employees said."
But the article then goes out of its way to call Tarullo "an ardent champion of policies and rules designed to make the financial system safer and less prone to panics," and notes that he "has emerged as a vigorous defender of banking rules and a proponent of government oversight."
That may be true, but Tarullo has a firm grip on supervision and regulation and the Fed survey revealed that division "is demoralized," and that "teamwork is nonexistent, innovation and creativity are discouraged and employees feel underutilized."
The survey also found that supervision and regulation staff are afraid to speak out and feel isolated.
The Fed's inspector general has launched a probe into complaints lodged by Fed staff, HuffPost reported.
That the Fed even did this survey is remarkable, and sources Thursday referred to the results as "amazing" and "stunning." It seems clear the results were leaked by a Fed employee who is fed up.
The question now is whether anything will change.
No one at the Fed was willing to talk about that on Thursday. But until Tarullo leaves, don't expect improvement. While his term runs until 2020, rumors consistently pop up that he's ready to go.
He may not have much choice, depending on whom President Obama nominates as Fed chairman in a few weeks.
If Obama goes with Fed Vice Chair Janet Yellen, most sources expect Tarullo will resign. The two aren't close and Yellen has strong opinions on bank regulation.
If Obama goes with Larry Summers, it's harder to gauge the impact on Tarullo.
Most sources cannot envision Summers giving Tarullo the free rein that Chairman Ben Bernanke has. But some insiders think Tarullo is pulling for Summers because he thinks it would mean he could keep his tight grip on bank policy.
Those same sources are rooting for Yellen, mainly because they see the same personality problems they have with Tarullo in Summers.
"We don't need two bulls in the china shop," is how one put it.