| T.R | Title | User | Personal
Name | Date | Lines |
|---|
| 1639.1 | Is this MY DCU? | TRACTR::SAPP | Night Time is the Write Time! | Sat Oct 19 1991 19:05 | 8 |
| Two thing struck me about this notice, one what about the DCU
members outside of Massachusetts? Do they get a proxy?
The second was to get every one not a member to put up $5 and
join and toss all the rascals out!
JMHO,
Edwin
|
| 1639.2 | Go to the meeting! | SSDEVO::EGGERS | Anybody can fly with an engine. | Sat Oct 19 1991 21:15 | 19 |
|
GO TO THE DCU SPECIAL MEETING!
There are no proxies allowed. This does disenfranchise those of us
outside of a reasonable travel distance of the meeting, but it has its
good points. My personal belief is that it does not work to the
advantage of the DCU Board of Directors. It works to the advantage of
whatever group can publicize its case and get the best voter turnout.
It should be pointed out that the special meeting is the result of
1200+ petitions from DCU members requesting the meeting and setting the
agenda. The DCU BoD is trying to prevent the meeting from becoming
known. It has complied with the legal minimum, but the BoD chairman,
Mark Steinkrauss, has refused to permit the meeting notice to be
published in LiveWire.
If you want to know more about the issues involved, you can read the
DCU notes conference. Press KP7 to add that conference to your
notebook.
|
| 1639.3 | Could someone explain? | ESMAIL::DONNELLAN | | Sun Oct 20 1991 02:47 | 3 |
| Will someone explain what the fuss is about? Why are people
disenchanted with the Board of Directors?
|
| 1639.4 | | BEING::MELVIN | Ten Zero, Eleven Zero Zero by Zero 2 | Sun Oct 20 1991 03:01 | 10 |
| > Will someone explain what the fuss is about? Why are people
> disenchanted with the Board of Directors?
The best thing to do is to go into the DCU conference and read about it
(on BEIRUT::DCU). I do not think any summation would do justice to the
complaints.
-Joe
|
| 1639.5 | Thanks! | TRACTR::SAPP | Night Time is the Write Time! | Sun Oct 20 1991 12:40 | 7 |
| RE:BEIRUT::DCU
Thanks, I was unaware of this particular Notesfile.
Warmest Regards,
Edwin
|
| 1639.6 | Brief recap of DCU arguments | KALI::PLOUFF | Devoted to his Lawn | Sun Oct 20 1991 16:49 | 22 |
| Well, at the risk of going down yet another rathole... Like previous
posters, I recommend you read the last few months of BEIRUT::DCU. One
person's perspective on why people are mad at the DCU board:
1. Their approval of real estate loans to non-members outside the
normal loan approval process, i.e. by direct vote of the board.
2. Their handling of the real estate loans as things fell apart in
1990.
3. The recent checking account changes, with sugarcoated higher fees.
4. Failure of the board to be forthcoming about the last 2 years'
developments.
NOTE: DCU is definitely NOT in financial trouble, despite an
$8 million loss on the Cape Cod loans. The DCU board has NOT to anyone's
knowledge done anything outside the law or government regulations.
However, the argument is being made that they exercised bad judgement
enough to be removed.
Wes
|
| 1639.7 | Check charges instituted? | GLDOA::MORRISON | Dave | Mon Oct 21 1991 02:06 | 4 |
| At the risk of tiptoeing a bit into the rathole, is the proposed point
#3 on instituting check charges a dead issue or has it / will it
happen? It would be a strong motivation for me to drop DCU and get
better local terms. Thanks.
|
| 1639.8 | | SSDEVO::EGGERS | Anybody can fly with an engine. | Mon Oct 21 1991 02:54 | 6 |
| The check charges are dead for the moment. But only for the moment.
I'd suggest you wait and see what happens.
Meanwhile:
GO TO THE SPECIAL MEETING AND VOTE!!
|
| 1639.9 | | BSS::D_BANKS | | Mon Oct 21 1991 11:22 | 6 |
| >The best thing to do is to go into the DCU conference and read about it
>(on BEIRUT::DCU).
Agreed!
- David
|
| 1639.10 | The old BoD has lost $18M! | POBOX::KAPLOW | Have package, will travel | Mon Oct 21 1991 13:26 | 27 |
| Re: the last couple
The checking charges were not canceled, but postponed. Management
still intends to implement them, probably early next year. Other
increased account charges went into effect on 9/1/91 without
delay.
The list a few notes back failed to mention the BoD trying to
cover up their losses, and preventing communication to the
members. They so far have censored access to LiveWire. They have
tried to cover up $18 million in fraudulent real estate loans that
they permitted the former DCU president to make to non-members of
the DCU. They have denied our access to information that should
have appeared in the annual reports for the past 6 years. They
have disenfranchised members in the past several elections. They
have forgotten that they were elected to run *OUR* credit union.
They think that we are trying to interfere with THEIR credit
union. They need a swift reminder of the facts.
PLEASE! Read BEIRUT::DCU. PLEASE! Go to the meeting and vote the
incumbants out of office. PLEASE vote for new blood in the next
DCU elections!
Yes, those of us out in the field (like me, 1000 miles from DCU)
do not get to vote on this matter. We are depending on those of
you who can to go to the meeting and do the right thing on our
behalf.
|
| 1639.11 | | VMSZOO::ECKERT | Why does a gander meander in search of a goose? | Mon Oct 21 1991 15:32 | 5 |
| re: .0 (from the agenda for the special meeting)
> B. Ascertainment that a quorum is present
What constitutes a quorum?
|
| 1639.12 | | NOTIME::SACKS | Gerald Sacks ZKO2-3/N30 DTN:381-2085 | Mon Oct 21 1991 16:02 | 3 |
| re .11:
It's all in BEIRUT::DCU, but the answer is 15.
|
| 1639.13 | re: .10 | MIZZOU::SHERMAN | ECADSR::Sherman DTN 223-3326 | Mon Oct 21 1991 18:36 | 5 |
| Slight correction ... current losses are pegged at about $8 million.
The "participation loans" were for about $18 million, but it is hoped
that much of it can be recovered.
Steve
|
| 1639.14 | | TOPDOC::AHERN | Dennis the Menace | Mon Oct 21 1991 18:50 | 4 |
| >Please Take Notice that on November 12, 1991 at 7:30 at the
^^^^
a.m. or p.m.?
|
| 1639.15 | Error opening DCU notesfile | SMOGGY::CAROLLA | HOMEY DON'T PLAY DAT! | Mon Oct 21 1991 18:52 | 2 |
| Tried to get to DCU notesfile but couldn't. Is this another means
of keeping the truth from coming out? Yes I tried more than once!
|
| 1639.16 | no conspiracy | SMOGGY::CAROLLA | HOMEY DON'T PLAY DAT! | Mon Oct 21 1991 20:15 | 2 |
| re .15
No conspiracy.... just a network problem.
|
| 1639.17 | The moderator needs to limit the load on her system | SMAUG::GARROD | An Englishman's mind works best when it is almost too late | Mon Oct 21 1991 22:56 | 11 |
| Re .all
If you get "Network Partner Exited" when attempting to access the DCU
notesfile don't worry too much. It's because the moderator has
restricted the number of concurrent links to 16. Quite understandably
the moderator needs the machine on which DCU.NOTE is located primarily
to transact her business related to her primary job for DEC.
The way evberyone can help access to the file for all is not to keep
links up to it if you are not using them.
Dave
|
| 1639.18 | What's wrong with this picture? | NEWVAX::SGRIFFIN | Census counts on Digital | Tue Oct 22 1991 01:42 | 7 |
| > known. It has complied with the legal minimum, but the BoD chairman,
> Mark Steinkrauss, has refused to permit the meeting notice to be
> published in LiveWire.
IMHO, I would think Mark would want to step down from the tainted position of
Chairman of the BoD at DCU in order to maintain credibility as the Corporate
Director of Investor Relations.
|
| 1639.19 | | DENVER::DAVISGB | Jag Mechanic | Tue Oct 22 1991 15:56 | 21 |
| I received the notice (Albuquerque, N.M.)
I may be able to attend while on business back east, but....
Sure was interesting that the agenda was primarily to vote the board
out of existance...
IF I were a board member, I'd be shaking in my boots (that is if I
liked the job, or had aspirations to participate in other boards.) This
one sounds like a lynch mob will be showing up!
"String him Up!"
"Anybody got any string?"
"Lynch him!"
"Anybody got any Lynch?"
(firesign theater)
|
| 1639.20 | Ah, about that address . . . | LJOHUB::BOYLAN | | Tue Oct 22 1991 17:41 | 11 |
| May I assume that the line:
> Sheraton tara hotel, located at 1657 Worchester Road in Framingham,
should read:
> Sheraton tara hotel, located at 1657 Worcester Road in Framingham,
????
- - Steve
|
| 1639.21 | $8 MIL a branch in California? | BALBOA::HOSSEINI | | Tue Oct 22 1991 21:28 | 7 |
| Boy, with 18 mil or even 8 mil, DCU could have had a branch in the
Western States where more than 4,000 field employees reside. Then
again, like S&L's, let the rich and greedy screw up, and the honest and
on-time loan payment public pay the price. What a concept, and I
thought DCU was an exception. I live in California, but if you guys
could go, go, and get rid of these board members. I also think it
might be time to reevaluate the whole DCU loan process?
|
| 1639.22 | My goal | PLOUGH::KINZELMAN | Paul Kinzelman | Wed Oct 23 1991 10:23 | 16 |
| Re: .19
Stop in to visit the BEIRUT::DCU notes file as recommended previously
and you'll see why people are upset. Reply #10 here is a good quick
summary of what's going on. In my opinion it's a problem of attitude
and credibility. What I'm in favor of is removing the board and having
new elections with a level playing field, something that I think (in
retrospect) has been missing from the DCU since its inception. I'm
personally not interested in participating in a lynch mob, just a
"removal" mob.
As to "if I were BoD", I would have quit long ago. BoDs don't get paid,
get no special benefits, and have had to undergo major hassle since the
Mangone thing hit the fan. Why would I want to volunteer my time and
not be appreciated?
|
| 1639.23 | | WLDBIL::KILGORE | DCU Meeting, 12-Nov, 7:30PM | Wed Oct 23 1991 15:11 | 8 |
|
In BEIRUT::DCU, note 330.9, I've attempted to summarize the current
complaints against the DCU Board of Directors, including references to
other notes which further examine the problems.
Please, use that conference, become informed, and vote at the Special
Meeting.
|
| 1639.24 | DCU issues summary | SSDEVO::EGGERS | Anybody can fly with an engine. | Wed Oct 23 1991 15:19 | 122 |
| Here is a summary of the DCU issues. The notes conference references
are to the BEIRUT::DCU notes conference. Press KP7 on your keyboard
to enter that notes conference in your notebook.
PLEASE GO TO THE DCU SPECIAL MEETING
<<< BEIRUT::R7XBOK$DIA0:[NOTES$LIBRARY]DCU.NOTE;4 >>>
-< DCU >-
================================================================================
Note 330.9 We need a succinct list of grievances against BoD 9 of 11
WLDBIL::KILGORE "Digital had it Then!" 108 lines 23-OCT-1991 12:05
-< final version >-
--------------------------------------------------------------------------------
NOTE
---------------------------------------
Due to references to an internal Notes
conference, this material is to be
considered DIGITAL INTERNAL USE ONLY.
---------------------------------------
The following is an attempt to summarize the major points of
contention between the members of DCU and Board of Directors elected
by those members, as expressed in the Notes conference BEIRUT::DCU.
Those unfamiliar with the circumstances surrounding the Special
Meeting (scheduled for 12-Nov-1991, 7:30 PM, Sheraton Tara, Framingham
MA) may find this information useful to obtain a better understanding
of the meeting agenda from the DCU conference.
Permission is granted to forward this note at will throughout the
company, and to repost it in other Notes conferences, providing it is
copied in its entirety and keeping in mind the note above.
Numbers in brackets are references to relevant notes (eg, [278]) or
ranges of notes (eg, [300.35-36]).
o Inappropriateness of participation loans with Barnstable CU:
- From 1985 through 1991, Richard Mangone (DCU president during
that period) brought "participation loans" from the Barnstable
Credit Union (BCU) into DCU. These loans eventually totaled
$18 million or 6.7% of DCU's loan portfolio. [240.33] Richard
Mangone cofounded BCU and was at one point a director of BCU.
- The participation loans, on closer inspection after the
defaults, are actually high-risk commercial real estate and
construction loans [258.16].
- Despite the nature of the loans and the obvious connections to
BCU, DCU was content with reviewing the loans by confirming
the completeness of the paperwork. [268.40] DCU considered
these loans "investments". [253.141]
o Past misinformation or disinformation with regard to the state of
the DCU:
- The 1985 Annual Report has not been made available, and was
probably not published. Since that time, auditors notes have
been excluded from the Annual Report. [258.21] Prior to 1985
(the year in which participation loans with the Barnstable
Credit Union began), the auditors notes were considered "an
integral part of these financial statements." [278.0]
- The 1990 Annual Report contains the following statement: "As
the industry reported unprecedented losses, DCU's financial
performance improved with Net Income for 1990, on target at
.8% or $.3 million." [258.7] This is is contrast with a 1989
Net Income of $3.3 million -- in reality, a 90% decrease in
Net Income over one year.
- DCU has stated through its Communication Department that the
Barnstable CU participations loans have "cost DCU nothing."
[258.6] This is in contrast with the inordinate value of loan
delinquencies and Allowance for loan losses on the more recent
Statements of Condition [272.6, 277.0]
- The "Lifestyle Checking" brochure of Aug-1991 attempted to
pass off the institution of sharedraft charges as "More
Choices! More Options!" [253.*]
o Current measures to further restrict DCU information:
- When questioned about a possible problem in the 1988 election
of two directors, the DCU Communications department responded
that the auditor's report for that election was unavailable
(although reports for other elections were available).
[289.0]
- Subsequent to the above request, an Information Protection
Policy was instituted by DCU. [300.0] Practical application
of this policy results in a charge of $132.25 for a small
percentage of the information requested with regard to the
Special Meeting, past elections, minutes of Board of Directors
meetings, audited financial reports, etc, and denied access to
the rest of the information. [300.35-36]
o The Board of Directors attitude with regard to the rights of DCU
members:
- The Board continues to exert control over the members of DCU,
by preventing the posting of information about the Special
Meeting in Live Wire as requested by members, by disallowing
posting of Special Meeting information in DCU branches, and
even by suppressing information on the size of the room in
which the meeting will be held. [372.0]
- The Board has expressed the opinion that members are not part
owners, but customers of DCU. [289.61-63] This position
permeates their actions leading up to, and fanning interest
in, the Special Meeting, and is in sharp contrast to the
concept of "shares" and the fact that the Directors are
representatives elected by the members.
|
| 1639.25 | Let Reason Prevail | AKOCOA::KETZ | | Wed Oct 23 1991 18:10 | 15 |
| I am not a frequent noter..but this topic has me upset. I have known several of
the DCU Board members, including Mark Steinkrauss, the current Chairman. Mark,
and Dan Infante, who I worked for directly for four years, are some of the most
professional, honest and committed people that I have known at Digital. If the
DCU community thinks these board members did something "Wrong"..its my opinion
that they just don't want to know the facts, they just want to blame someone
for what looks to me was a grand scam by the ex-president of the DCU. Nice
reward for giving up your free time, without pay, to help the credit union. I
hope open minds prevail at the November 12th meeting, but I'm not too optimistic
this will be the case. In any event, these current members have my vote of
confidence. They eat, sleep and think only of Digital. I do not believe they
could be replaced by anyone more committed to DEC and the DCU.
Regards, Boston Bob
|
| 1639.26 | | CSC32::S_HALL | Wollomanakabeesai ! | Wed Oct 23 1991 18:38 | 12 |
| > They eat, sleep and think only of Digital. I do not believe they
> could be replaced by anyone more committed to DEC and the DCU.
> Regards, Boston Bob
How then, would you explain the behaviour mentioned in the
*second half* of the "problems" posting ( .24 ) ?
This kind of committment I don't need in my credit union !
Steve H
|
| 1639.27 | My view of DCU and BoD | PLOUGH::KINZELMAN | Paul Kinzelman | Wed Oct 23 1991 18:53 | 47 |
| Re: .25
I too would like to agree with what you say. I would like to believe in
the BoD. Believing in the BoD is necessary for us to be confident in
our financial institution. For that matter, I'd prefer to think highly
of people in general. However, I don't know any of the BoD personally,
only thru their actions as DCU BoD. My opinions have been formed over a
period of the last 3 months or so in view of my perception of the facts.
I would like to believe that the BoD acted with integrity. However,
many of us (myself included) have been finding, uncovering, and sharing
facts (as noted in the DCU notes file and summarized in this note) that
appear to us to be contradictory with what we think a credit union
should be. There are too many of these "problem" facts to just ignore.
Everything we look at generates more questions than answers. These
"questions" demand explanation. I'd be perfectly happy to hear out the
BoD's explanation. However, the one special meeting I went to did not
do that for me. The second meeting (I couldn't attend) was not much
better as I understand it from friends who went. I felt that the
meeting had the flavor of "damage control" rather than frank answers. I
felt insulted when I was presented with damage control information. I
expect frank answers.
Instead of chosing to explain facts that appear to suggest, at the very
least, questionable judgement, the DCU has chosen not only to clamp down
on all information that might shed light on exactly what's going on, but
as I understand from friends, the new DCU president is blaming the new
"information" policy on a small group of people "inundating" him with
requests. From all the facts I am able to gather, his statement is not
true. He has not yet chosen to corroborate his charge, though I'm
perfectly willing to hear him out.
Granted, at this point there is a lot of emotion involved on both sides.
I feel that I have been subjected to frustrating controls on information
that should be available for the asking. It's difficult to ignore this
frustration, though I am willing to try if I'm presented with data to
refute what facts have been uncovered.
So, I ask you, .25, to read our list of "questions" and see if you can
obtain objective, factual, answers, unswayed by your subjective view of
the personalities on the BoD. If the questions get explained to my
satisfaction by the time of the special meeting, I'll fight to be first
in line to vote for the BoD. Until then, I'm pretty close to the front
of the line to vote against them.
I believe I can back up the summary of questions with facts and data.
Can you refute them with facts and data? Can the BoD?
|
| 1639.28 | It's a matter of responsibility and honour | SMAUG::GARROD | An Englishman's mind works best when it is almost too late | Wed Oct 23 1991 19:56 | 29 |
| Re .25
Let's get something correct here. I don't think ANYBODY is accusing the
DCU board of unethical, illegal or other such conduct.
The problem to me at least is that they haven't been 'on the ball'
for the last few years. In addition to that information that has been
communicated to members has just plain contradicted what was actually
going on. Witness the Mark Steinkraus communication in 1987 about only
loaning to members and investing in federally insured banks when $8M+
of speculative participation loans were outstanding to Barnstable
Credit Union. This was something that was discussed at a board meeting
(the authorization for the participation loans). The proof of this is
contained in documents DCU have filed in a civil suit against Mangone.
Also there is another issue. Being the BOD they are RESPONSIBLE for
what happens with to the DCU. Granted they weren't helped in that by a
seemingly crooked past president. But the buck stops with the BOD. And
an HONOURABLE BOD would have voluntarily offered their resignation once
it was uncovered that they had AUTHORIZED DCU to invest speculatively
and that investment turned very bad. I bet you if this was a Japanese
Institution (and maybe even a British one, but I'm not so sure about
that nowadays) the BOD would have offered their resignation to the
members in an instant. Instead they 'forced' the members to have to gather
1200+ signatures (which was incredibly easy) to set in progress a
process that would not have been necessary had the board said.
"OK we made some poor judgements, here is our resignation".
Dave
|
| 1639.29 | If a check charge - I'm outa here | GLDOA::MORRISON | Dave | Wed Oct 23 1991 23:29 | 5 |
| In the field, and there are MANY of us, and our needs are often simple.
I suspect that most just use the DCU checking. I know that I will
quickly "bail out" to another institution if the check charge actually
happens. There are many other competitive institutions. Business is
Business.
|
| 1639.30 | | GUFFAW::GRANSEWICZ | Someday, DCU will be a credit union. | Thu Oct 24 1991 00:28 | 55 |
|
RE: .25
I hear what you are saying, but I'll repeat .29. Business is business.
The BoD of DCU is responsible for their actions or inactions. They
have used DCU's past successes to their benefit, yet do not seem to
feel they share in any of the responsibilty for the credit union suffering a
major loss. There have been MAJOR things going wrong in this multi-million
dollar institution. They have, in my eyes, tried to conceal them from
the membership. As proff, I suggest you go to your nearest DCU branch
and ask for a copy of the 1990 annual report. First read all the text
statements by Mark Steinkrauss (Chairman of the Board) and Susan
Shapiro (Board member and Treasurer). Ask yourself, "How is DCU
doing based on these statements?". Then read through the actual
financial statements and see if anything catches your eye. (hint: look
for large differences in numbers from 1989 to 1990). For those not
experienced in looking at these types of financials, I'll tell you.
Net income for 1990 was approximately $300,000. Net income for 1989
was $3.3 million. That is an 87% DROP. Now look up the column to
"provision for loan losses". In 1989 DCU allocated $240,000 to the
reserve. In 1990, DCU allocated $4.4 million to the reserve. That is
ALMOST ALL OF DCU'S NET INCOME FOR 1990. This is a significant
financial event for DCU. Now look on the balance sheet and you will
see something called "other real estate owned" of approximately $6
million in 1990. 1989 had $0. Had the complete financial statements
been issued, you would have easily seen what was happening. I asked
DCU to read the auditors notes to the financial statements for 1990. I
was at first denied access. Then they said I could come to DCU HQ and
read them, but couldn't have copies. I took vacation time to go done
and read them. What they showed was $2.6 million in losses oin the
participation loans that the BoD reviewed and approved. They also
showed that DCU had already "foreclosed or substantively repossessed"
about $6 million in property that secured those loans. I was known, or
should have been known, that there were MAJOR problems with these
"investments". The losses from these loans also appears to be making 1991 a
bad year for DCU net income. As of June 1991, they were reporting a
loss of $100,000. The amount of equity in the credit union that has
been built up over the last 11 years has fallen as the credit union
takes the hit on these bad loans.
The auditors notes for 1985-1990 were never published, effectively
concealing the existence of these "investments". They were carried on
the books as "participation loans" and later as "commercial real estate
loans". If the Cape Cod real estate that secured these loans
sky-rocketed in value, DCU would not reap the benefits. The realty
trusts which were given the loans would have been in fat city, but DCU
would have gotten no more for making loans for this real estate
speculation. Therefore, the claim of "investment" is bogus in my book.
These are only a few of the issues with the BoD. You reall ymust read
BEIRUT::DCU to get the full picture. If you read DCU literature, you
are getting less than half off the story. I urge all DCU members to
find out what has been going on at their credit union and to attend the
special meeting on Nov. 12 to help turn the credit union around.
|
| 1639.31 | But we *do* "want to know the facts"! | TOMK::KRUPINSKI | Repeal the 16th Amendment! | Thu Oct 24 1991 14:42 | 21 |
| re .25
> If the DCU community thinks these board members did something
> "Wrong"..its my opinion that they just don't want to know the facts,
> they just want to blame someone..
Would that it were true. The fact is that we do "want to
know the facts". A number of people have been trying to
obtain them, but the DCU, at the direction of the Board of
Directors, will not give them out. Repeated requests for
critical information has been either denied outright, or
subject to an outrageous fee.
If we had the facts, perhaps they would bear you out as correct.
But we can't get the facts, the DCU won't let us have them.
So our only alternative is to remove those who are obstructing
us from obtaining the facts, and replace them with people who
will give us the information you want us to look at. You sound
like a reasonable person, how else could, or should, we proceed?
Tom_K
|
| 1639.32 | DCU Protecting us from information | GUFFAW::GRANSEWICZ | Someday, DCU will be a credit union. | Fri Oct 25 1991 16:47 | 34 |
|
Other interesting aspects of this "event"...
DCU will not post notices in any of the branches as reminders to DCU
members.
DCU refuses to post the event on LiveWire stating that members have
already been notified by mail. All members were also notified of the
BoD elections too. Yet DCU saw fit to also post that in LiveWire.
All this at the same time the new DCU President does his show in
various DEC facilities in various DEC conference rooms, telling people
not not vote the Board out. These visits are also advertised on
LiveWire.
When we tried calling the Framingham Sheraton Tara to find out what
room the meeting would be held in, we were told by the hotel staff that
they had been requested by DCU to not give out any information on the
meeting.
I have also been contacted by 2 DCU members who don't work for DEC
anymore. When they got the notice in the mail, they called DCU as it
instructed them to do if they had any questions. They were in fact
given almost no information, some information was misleading and some
of what they were told was a lie, namely who submitted the petitions.
The person told them she didn't know who submitted the petitions.
When I called DCU to speak to this person who was lieing to DCU members,
and request that she stop doing so, she had nothing to say.
I'd just like to say that I believe the person at DCU is just following
orders. It is the people who would give her such orders that I have a
real problem with. I will be mailing these 2 DCU members information
packets today.
|
| 1639.33 | What DCU's board has to say about the matter | SMAUG::GARROD | An Englishman's mind works best when it is almost too late | Wed Oct 30 1991 20:37 | 278 |
|
The attached is a note that a member of the DCU board of directors
posted in the DCU notesfile. I am posting it here because I believe
it has great relevance to Digital employees who are DCU members.
I ask readers to draw their own conclusions from the statements made
in this note. I must point out that some of the accusations made in
this statement have rebuttals in subsequent replies in the DCU
conference.
I hope that seeing this note will help more people understand why over
1200 people signed a petition to convene a special meeting to remove
the current DCU board of directors and make them stand for reelection.
If you want to make a difference come and vote on Tuesday November 12th
at 7:30. Never will your vote mean more.
[In case anyone wonders - this note is posted without permission of
the original author. I have checked Digital's P&P and cross posting
a note from a conference that is open to all Digital employees is
not a violation of policy.]
Dave, a very concerned DCU member
<<< BEIRUT::R7XBOK$DIA0:[NOTES$LIBRARY]DCU.NOTE;4 >>>
-< DCU >-
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Note 343.0 DCU's BOD Responds to Mis-Information in Notesfile 29 replies
HYEND::SSHAPIRO 249 lines 29-OCT-1991 16:19
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DCU's Board of Directors is submitting the following
statement for the purpose of clarifying mis-information
that has circulated in this VAXnotes conference.
We thank you for taking the time to read this statement and
hope that it clarifies many of the issues that are of concern
to all of us.
DCU's Board of Directors
Dan Infante
Jef Gibson
Charlene O'Brien
Mark Steinkrauss
Susan Shapiro
Jack Rugheimer
Abbott Weiss
October 29, 1991
During the past few months, the National Credit Union
Administration (NCUA), our independent auditors and
legal counsel have conducted extensive investigations of
DCU to determine the extent of the fraud committed by
the former president, Richard Mangone. They have
concluded, without question, that no board member,
official or staff member, except Mr. Mangone, was
involved in any wrongdoing at the credit union.
Despite the results of these investigations, however, a
small group of members have used the VaxNotes and
VaxMail to raise questions about the board's actions in
handling this situation. This same group has
continuously requested information about the credit
union and DCU has responded by granting the majority of
those requests. As the information was reviewed, more
information was requested and false statements,
unsubstantiated accusations and allegations increased.
Furthermore, the board has held two informal member
meetings, lasting 4 hours each, to discuss the credit
union. These meetings were open. At each meeting a
total of 15 to 19 members attended. Many of those
members attending the first meeting also attended the
second.
Recently, the board has enacted an Information
Protection Policy. This policy provides a list of
information available at all DCU offices and asks member
who have requests, other than those regarding products
and services, to submit such requests in writing,
stating the business reason for the request. The fees
associated with this policy are to recover the time,
labor and cost incurred by these unusual requests. This
policy does not prevent information from being provided
to members. It does, however, require a legitimate
business reason and not merely for the purpose of
harassment. Of course, some information cannot be
released in order to protect the credit union and its
members.
Some Examples of the Most Recent False Allegations
DCU member, Phil Gransewicz has suggested that the board
approved a 6.5% mortgage loan for Mr. Richard D. Mangone
and that the loan was for interest only payments.
Another VaxNotes writer suggested that the Mangone
mortgage is not the only DCU loan of this type. These
statements are ABSOLUTELY UNTRUE. Mr. Mangone received
a standard mortgage at prevailing rates and nothing
more. Our members, including employees and officials of
the credit union, are offered the same savings and
lending rates and programs. Preferential loans are
illegal and, if written, would be discovered by the NCUA
examiners and our independent auditors. The responsible
parties would be terminated.
The VaxNotes file has accused the board of being
compensated. THIS IS UNTRUE. DCU's board members are
volunteers, elected by the entire membership and
responsible to the membership as a whole. They cannot
and do not receive any added benefit for volunteering.
The fact that the board was defrauded and betrayed by
Mr. Mangone does not imply that the board has done
anything wrong. As we have communicated previously, the
Federal Examiners have carefully reviewed all areas of
our credit union, current board members, officials and
staff and have cleared them from any involvement in the
fraud. It would seem that the actions of this small
group of members is to harass the board until they quit.
The board will not allow members with limited or no
finance or management experience to control
Massachusetts' largest credit union.
VaxNotes file has stated that DCU is not complying with
NCUA regulations on the Special Meeting. THIS IS
UNTRUE. On September 17, 1991, DCU received a petition
from members to hold a Special Meeting. DCU validated
the petition signatures on September 18, 1991.
According to our bylaws and confirmed by our legal
counsel, the Chairman of the Board, within 30 days, must
call (ie. choose a date, time and place) to hold the
Special Meeting. On October 15, 1991, in accordance with
our bylaws, the following date, time and place were
chosen: November 12, 1991, at 7:30 p.m., at the
Sheraton Tara Hotel, located at 1657 Worcester Road in
Framingham, MA 508/879-7200. NCUA has issued no
written interpretation on this issue.
This date was selected so we could provide ample notice
to our members, offer a convenient time and location to
the majority of our members and allow us sufficient time
to prepare and print the mailing and reserve
accommodations. For your information, it will cost DCU
members over $35,000 to hold this Special Meeting.
Implications are that the DCU board manipulates the
election process. THIS IS UNTRUE. As with previous
years, the October NETWORK has been a vehicle to
communicate a call for candidates to run for DCU's Board
of Directors. According to our bylaws, DCU must notify
our membership of the opportunity to run. Utilizing our
member newsletter saves the credit union thousands of
dollars.
It is important to note that this process always runs
approximately 7 months. At this time, 2 of the 3
nominating committee members have been selected. None
of them are DCU officials.
Rather than continue responding to other false
allegations, we believe it is appropriate to summarize
the positive steps the board has taken to recover from
the fraud and to improve DCU's operations.
New President/CEO - Mr. Charles Cockburn joined DCU in
early September, 1991. Through member correspondences
and statements, Mr. Cockburn has communicated DCU's top
priorities, which are to ensure quality service and to
improve the credit union's financial condition. In the
next few months, the management team will collect and
analyze information to develop a more insightful
strategic plan that will enable the credit union to make
long-term progress toward both goals. As part of the
information gathering process, Mr. Cockburn is visiting
many Digital facilities to speak with members and to
obtain input from DCU staff and members on how to
improve the credit union. In some instances, the
changes suggested are being implemented immediately,
others will take time. Some of the new changes include:
1. Discontinued the checking account fee until
the strategic plan is completed.
2. Discontinued the DCU ATM fee for savers who do
not have a checking account.
3. Simplified rates for new and used vehicle
loans.
4. More flexible terms for new and used vehicle
loans. This includes no maximum loan amount
and 72 month financing.
5. Eliminated the checking account requirement for
having a line of credit or Home Equity Loans.
6. Eliminated the need for branch staff to call
the main office to waive fees and to make
decisions that relate to member service.
Internal Controls - The board has implemented or is in
the process of implementing the following improved
internal controls:
Supervisory Committee - This committee consists of
members appointed by the board. Their primary
responsibilities are to ensure that proper internal
controls exist. They represent "checks & balances"
between the board, the staff and the membership. Mr.
Cockburn will work with the committee to improve their
effectiveness and to implement numerous policies and
procedures at the credit union.
Outside Auditor - The Supervisory Committee also has the
responsibility to select and work with an independent
auditing firm. Mr. Cockburn has extensive experience in
this area and he will recommend that the committee
select an alternative firm who can provide a fresh
approach.
Internal Auditor - We will have a full time employee who
conducts thorough audits of all areas of the credit
union. This person will not report to the board, but
will have a direct line reporting relationship to the
Supervisory Committee and the President/CEO.
General Counsel - The board has recently hired the law
firm of Styskal, Wiese, and Melchione. Mr. Melchione
has extensive experience with credit unions. As general
counsel, Mr. Melchione works with DCU staff on
compliance, employment, etc. One of his many roles will
be to ensure appropriate credit union policies are in
place, and to make sure checks and balances exist. All
lawyers retained by DCU for mortgage closings,
compliance issues or pending litigation are working for
the credit union. They are not representing any
individual, but the membership as a whole. DCU does not
provide legal representation for any member or group of
members.
Legal Actions - The board had hired the law firm of
Bingham, Dana & Gould to pursue legal remedies, and to
recover any losses from all parties associated with the
fraud. To date, the credit union has received $6
million (the maximum) from our insurance carrier,
commenced a lawsuit against Mr. Mangone and others, and
has successfully attached $200,000 of Mangone's personal
assets. In addition, we are cooperating fully with
federal and state investigators.
The membership will continue to be updated regarding
these litigations. As with Mr. Melchione, none of the
credit union's attorneys represent any member of the
board.
In summary, a small group of members have conducted what
would seem to be a "witchhunt" with the intent to
discredit the board of directors and the credit union.
Their efforts have culminated in a petition to remove
the present board.
The removal of the board would be disastrous to the
credit union. At best, the credit union would be
paralyzed for several months. Given the board's current
efforts to strengthen the financial condition while
improving service, the credit union will be seriously
undermined without strong leadership.
If the entire board is removed, there is a substantial
risk that a newly elected board would have NO experience
in management, finance, or understanding of the
credit union operations. It is, therefore, extremely
important that members attend the Special Meeting and
show support for DCU's current board of directors.
Signed,
DCU's Board of Directors
|
| 1639.34 | re: .33 | TOOK::DMCLURE | Did Da Vinci move into management? | Thu Oct 31 1991 03:07 | 12 |
| Unbelieveable arrogance displayed in that DCU posting! I'd
recount all of the gory details, but the points have been made
quite accurately in the replies to note #343 of the BEIRUT::DCU
notesfile. "Witchhunt" eh? I suspect it will be more of a
turkey roast by the time the November 12th meeting takes place.
Vote the BOD out if that is what is necessary, but whatever
you do though, don't make a run on the DCU (another local credit
union just folded recently on the slightest of rumors). Prove the
BOD wrong - maintain a healthy DCU without them!
-davo
|
| 1639.35 | Good grief! | IMTDEV::BRUNO | Father Gregory | Thu Oct 31 1991 09:19 | 20 |
| RE: <<< Note 1639.33 by SMAUG::GARROD "An Englishman's mind works best when it is almost too late" >>>
> <<< BEIRUT::R7XBOK$DIA0:[NOTES$LIBRARY]DCU.NOTE;4 >>>
> -< DCU >-
>================================================================================
>Note 343.0 DCU's BOD Responds to Mis-Information in Notesfile 29 replies
>HYEND::SSHAPIRO 249 lines 29-OCT-1991 16:19
>--------------------------------------------------------------------------------
> ...
> The board will not allow members with limited or no
> finance or management experience to control
> Massachusetts' largest credit union.
> ...
Well, that caught MY eye. The entire posting is extremely
disturbing. It would have been to their advantage to have kept quiet.
I think more people should attend this meeting.
Greg
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| 1639.36 | I wouldn't vote to toss the board! | SAHQ::STARIE | I'd rather be skiing! | Thu Oct 31 1991 11:48 | 17 |
| I don't think that if I could come up from Georgia on the 12th that I
would vote to board out. I know two of the board members personally,
and I don't think they have done anything wrong.
The point that the credit union would be mired down by the sudden
removal of all the experience from the board is a good one. I guess I
would need to have a much better understanding of how the board has
erred before I could vote for such a drastic action.
I didn't like the new fees either, but that has been fixed. I know
enough about credit unions to know that if the board was guilty of
wrong doing in the case of the former president, that the external
auditors would have acted against them.
I simply don't see that the membership has much to gain by tossing out
the board, but I can see where a new inexperienced board could give us
a great deal to lose!
|
| 1639.37 | | MIZZOU::SHERMAN | ECADSR::Sherman DTN 223-3326 | Thu Oct 31 1991 12:09 | 8 |
| A minor clarification. The fees have been TEMPORARILY "fixed". And,
it's not all fees that have been fixed. It is expected that they will
go up after this is all blown over if nothing changes. Part of the
reason for this happening has to do with alleged poor communication from the
Board and alleged poor decision making. It does not, in my mind, have
to do with any wrong doing.
Steve
|
| 1639.38 | | SQM::MACDONALD | | Thu Oct 31 1991 12:13 | 26 |
|
Re: .36
> I know two of the board members personally, and I don't think
> they have done anything wrong.
I have no doubt that you are right, and no one has accused any
BoD member of any legal wrong doing in the Mangone and Barnstable
Credit Union affair. Poor judgement maybe but not outright wrong
doing.
In the eyes of many, myself included, their collective action in
the aftermath of this mess has added up to contempt for the
concerns of the membership and a disregard for their wishes.
Their "wrongdoing", if you can call it that, is that they have
succeede in ticking off a large number of the membership when
it was totally unnecessary and, in a series of events, adding
fuel to that anger.
That is reason enough to vote them out. What we are trying to tell
them is that we, the members, want a BoD that represents what
WE want and not what they, the BoD, thinks is best for us.
Steve
|
| 1639.39 | They wouldn't answer these and other questions when I asked | POBOX::KAPLOW | Free the DCU 88,000 11/12/91! | Thu Oct 31 1991 12:32 | 21 |
| re: .36
Before you decide to leave the current board in place, PLEASE read
the recent contents of BEIRUT::DCU.
Ask the BoD to provide you with the AUDITED copies of the annual
reports for the past few years.
Ask the BoD to provide you with the AUDITED election results for
the past few years.
Ask the BoD who approved the Barnstable participation loans.
Ask the BoD when they first knew of problems with those loans, and
why they hid those loans from the members for so long.
Ask the BoD who is responsible for the current sorry state of the
DCU? Is there some other elected official we can remove other than
the BoD?
|
| 1639.40 | The facts of the matter | GUFFAW::GRANSEWICZ | Someday, DCU will be a credit union. | Thu Oct 31 1991 13:37 | 199 |
|
[Permission to forward or re-post this note is granted. However, the
original note header and names at the end of the message must be
retained. The contents of the note may be shared with any DCU member.]
I can document with cold, hard facts that the BoD concealed the
existence of the participation loans for 6 years by excluding the
auditors notes to the financial statements. The last year that the
notes appeared in the financial reports was 1984, the year before
DCU signed a "Participation Agreement" with Barnstable Community
Credit Union. In fact, DCU may not have even printed and made
available an annual report for 1985. The line at the bottom of the
page of the 1984 annual report states:
"The accompanying notes are an integral part of these financial
statements."
In fact, the auditors statement concerning the financial reports has
been excluded from DCU annual reports from 1985-1990 because DCU does
not publish the notes. This says a LOT about the information in those
notes. Without them, the financial statements you are viewing aren't
complete and can therefore not be relied on.
In 1987 while DCU has $9.8 million dollars invested in loans
to real estate trusts on Cape Cod, Mark Steinkrauss, Chairman of the
Board, made the following statement in a letter to the membership:
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
'Q. How does DCU invest its money?'
'A. Because we view DCU as the guardian of members' savings we are
very conservative in our investment policies. We reinvest savings in
member loans. Additional investments are in government securities and
federally insured banks. We deal with the highest quality financial
institutions and don't invest in any sort of "speculative" instruments.'
(Note: Quotes around the word speculative are in the original letter.)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Source: Copied from DCU Annual Reports 1985-1990. This information was
contained in the auditors notes. The auditors notes were not
published with the DCU Annual Reports.
Loans Outstanding: (in thousands)
1985 1986 1987 1988 1989 1990
------ ------ ------ ------ ------ ------
Automobile 32,962 51,452 44,384 39,803 34,955 33,510
Mortgage 25,845 74,557 70,691 72,822 69,723 71,553
Home Equity -- -- 43,338 63,441 81,203 89,457
Other Secured 3,463 6,082 6,459 7,212 6,411 5,096
Unsecured 15,124 9,820 15,073 21,153 35,706 39,721
Participation loans 2,520 8,010 9,886 -- -- --
with other CU *
Commercial RE loans * -- -- -- 12,766 15,332 8,727
* = Description of participation loans changed to Commercial RE loans.
(Note: Participation loans reached a high of $18 million in 1990.)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Then around July of 1990 the first default on these loans occurred.
By the end of 1990, DCU had foreclosed or substitantly repossessed about
$6 million in property that secured these loans. In 1990, DCU had
already charged off $2.6 million in losses associated with these
participation loans. Yet no mention of this significant financial
information was made in the 1990 annual report. But the auditors saw
it significant enough to include the following notes to the 1990 annual
report. (Notes that have not been made available to the DCU
membership).
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Source: Copied from DCU Annual Reports 1985-1990. This information was
contained in the auditors notes. The auditors notes were not
published with the DCU Annual Reports.
Allowance for Loan Losses: (in thousands)
1985 1986 1987 1988 1989 1990
----- ----- ----- ----- ----- -----
Balance, Beg. Year 540 1161 1159 1272 1429 1533
Provision Charged to 747 243 240 240 240 4406
Operations
Loans charged off (members) (130) (284) (187) (140) (173) (283)
Paricipation loans (2696)
Charged Off
Recoveries 4 39 60 57 37 21
Balance, End Year 1161 1159 1272 1429 1533 2981
(Note: $2,696,000 loss on participation loans in 1990.)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
" (3) Loans
The credit union grants home equity loans, residential loans and
consumer loans to members. The credit union also participates in
commercial real estate loans primarily in the Cape Cod region.
Approximately 67% of the loans granted by the credit union are
secured by real estate. The ability and willingness of the home
equity, single family residential and consumer borrowers to honor their
repayment commitments is generally dependent on the level of overall
economic activity within the borrowers geographic areas and real estate
values. The ability and willingness of commercial real estate borrowers
to honor their repayment commitments is generally dependent on the
health of the real estate economic environment in the borrowers
geographic areas and the general economy."
"Real Estate Acquired by Foreclosure or Substantively Repossessed
----------------------------------------------------------------
Real estate acquired by foreclosure or substantively repossessed is as
follows:
Dec. 31 1990
------------
Land $4,131,000
Commercial Real Estate 2,562,000
----------
$6,693,000
At December 31, 1990, real estate acquired by foreclosure or
substantively repossessed included approximately $5,668,000 of
properties that were substantively repossessed."
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Contrast the above information with some of the statements made in
the 1990 annual report. DCU's net income for 1990 dropped 87% from
what it was in 1989, yet "DCU's financial performance improved".
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
"We will continue our prudent lending and investment practices so that
our members' investments remain safe and sound." (M. Steinkrauss, Chairman)
"Finally, as we progress through 1991, we will continue to focus on the
security of funds while providing our members with the best possible
service." (M. Steinkrauss, Chairman)
"As the industry reported unprecedented losses, DCU's financial
performance improved with Net Income for 1990, on target at .8% or $.3
million. We maintain a conservation cash position and invest in only
the highest quality money-market investments." (S. Shapiro, Treasurer)
"Most of our earnings were placed in reserves as we anticipate
continued pressure on the real estate market, especially in New
England." (S. Shapiro, Treasurer)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
To make matters worse, Mr. Mangone simply instructed a DCU employee in
June of 1990 to tranfer $3,523,915 to Barnstable Credit Union. This
fact went undetected or unacted upon by the BoD until they filed a
civil suit against Mr. Mangone. My question is "How could the largest
loan transfer in DCU's history have been made without the proper
authorizations." This indicates a complete lack of checks and
balances in the system the BoD had set up to "invest" in these loans.
On October 25, 1990, DCU received a summons from Barnstable
Superior Court attaching all of Mr. Mangone's funds at DCU. On
November 7, 1990, Ann McAdoo, Senior Operations Manager responded to
the summons stating that a total of $44.16 had been attached. I
have yet to obtain a copy of the court case which resulted in this
attachment. The fact that the President of DCU had been named in a
multi-million dollar civil suit should have warranted SOME kind of
inquiry on the part of the BoD in my eyes.
Yet, the DCU Board of Directors failed to notice or act on any of
this. The only thing we have been told they did was ask Mr.
Mangone "to work the loans". Now, he is the same person who sold these
loans to the BoD in the first place. Was this an appropriate response?
The DCU Board of Directors claims that their first knowledge that
fraud was involved was March of 1991, when the NCUA shutdown Barnstable
Credit Union. Yet it still took the Board of Directors until April 5th
to remove Mr. Mangone. I suggest to you that DCU's Board of Directors
had many glaring danger flags concerning these loans and Mr. Mangone
long before March of 1991.
They claim people have acused them of fraud. That is incorrect.
What people have accused them of is mismanagement and not exercising
due care. The facts above tell me that the BoD was either asleep at
the wheel or failed to act appropriately given the significant amount
of DCU money involved. Given this past history, I can not honestly
trust these same people to continue on the Board of the credit union
that I entrust with my money. The BoD's actions subsequent to all this
has been one of stonewalling, denial of responsibility, and
non-disclosure of data. Their actions have contributed to a general
lack of trust on the part of many members.
If you have any questions or requiring clarification of any of this
information, please feel free to contact me.
Regards,
Phil
|
| 1639.41 | | CSC32::B_SHAW | | Fri Nov 01 1991 11:18 | 20 |
| That was a great synopis of the situation at the DCU, Phil. I wish to
makes just a couple of comments,
1. As a former CPA with a major accounting firm, I feel that the auditors
notes are crucial to understanding the financial statements. I believe
this is also to position of the accounting industry. (It been quite a
few years since I left accounting). Why suddenly do are the auditors notes
no longer included in the statements. As I understand it, they were
there prior to 1985.
2. To effectively determine if certain members of the BOD recognized the
problems would require access to the minutes of the BOD meetings over
the period in question. I gather that the BOD has refused to make these
minutes available to the membership. Given this situation, I would
opt to remove the entire board since it cannot be determined which, if
any attempted to deal with the situation currently affecting the DCU.
Just my humble option.
Bob.
|
| 1639.42 | Open letter to DCU membership | SMAUG::GARROD | An Englishman's mind works best when it is almost too late | Thu Nov 07 1991 04:46 | 853 |
|
[This is an open letter to the DCU membership from DCU member Dave
Garrod. Permission is hereby granted to forward this message to
any DCU member, by any means, provided my name and original header
are retained]
Dear DCU Member,
On November 12, 1991, at 7:30 p.m. at the Sheraton Tara Hotel,
located at 1657 Worcester Road (Rt. 9) in Framingham, MA, there
will be a special meeting of the membership of the Digital Credit
Union (DCU). The most important item to be discussed and voted
upon is a motion to remove the complete DCU board of directors.
If this motion is carried subsequent to the special meeting new
elections will be held by DCU that follow the normal process to
elect all seven members of the board of directors. The current
board members will have the same rights to participate in that
open election process as any other DCU member.
As defined in the DCU Bylaws the special meeting was called
through the signing of a petition by over 1200 DCU members who
believed all was not right with the way their credit union was
being run.
The DCU Board of Directors has demonstrated and continues to
demonstrate patterns of poor decision making and of poor
communication with shareholders. The following is a brief
synopsis of this assertion which was felt to be sufficient
justification for the agenda items of the special meeting
scheduled for November 12, 1991:
1. Questionable Appropriateness of Participation Loans
The Board approved $18 million over the past several years in
what are now deemed non-performing "participation loans" to
outside interests. It is my belief and that of many others
that the Board may have had cause for suspecting the validity
of these loans, sufficient to justify reasonable efforts
(which were not taken) to verify documentation now alleged to
be fraudulent.
2. Misinformation Regarding Participation Loans
It is my belief and that of many others that in statements the
board made to members in 1987 and in the 1990 annual report
they were not presenting true and accurate financial
information to the members regarding investments in risky
participation loans, and losses that were being suffered from
them.
3. Questionable Institution of Checking Account Charges
The Board attempted to introduce new checking account changes
with higher fees in August of 1991 in a manner that appeared
to me to be intentionally misleading and unjustified.
1
4. Denial of Business Related Information
During 1991, the Board denied access of shareholders to such
information as auditor's notes, meeting minutes and so forth
pertaining to Board operations and elections. Since 1985
annual reports have been published without notes or the
auditors endorsements. It is my belief that this was done
because it was the auditors notes that contained details of
the participation loans. No public statement by the Board of
Directors even recognized the fact that the DCU invested in
participation loans. I believe that the shareholders of DCU
are entitled to accurate and timely information regarding
their institution.
Since the Special Meeting was successfully petitioned, the Board
has continued to exhibit this pattern of poor decision making and
poor communications, as follows:
1. New Information Restriction Policy
In September of 1991, the Board introduced new restrictions
and fees for shareholders seeking access to such documents as
bylaws, official statement of DCU policy and so forth.
2. Repression of Special Meeting Announcement
Shortly after the mailing of the special meeting announcement
and prior to the holding of the special meeting, the Board
would not permit further significant announcement of the
special meeting. In particular notices were not posted in DCU
branches even after members requested that they should be. I
would have expected the DCU to have wanted to remind as many
members as possible about such a significant event.
2
You probably have many questions relating to the background behind
why so many people were willing to call for the special meeting.
I will address what I consider to be the most important questions
in a question and answer format:
Q: What exactly are participation loans?
A: Participation loans are loans that are made by institution A and
then bought/participated in by one or more other institutions. In
the DCU case Barnstable Credit Union made loans to commercial real
estate developers on Cape Cod. The DCU bought into these loans.
Q: When did the DCU first start participating in these loans?
A: In 1985 Richard Mangone who was a major player at Barnstable
Credit Union and the president of DCU interested the DCU board of
directors in participation loans. The DCU board of directors
approved the taking of very heavy position in these participation
loans. DCU bought 70-80% shares in these loans and thus assumed
the major part of the risk in these loans. DCU continued to
participate in these loans until 1991. Defaults first appeared on
these loans in the summer of 1990.
Q: Why are participation loans deemed very risky?
Participation loans are risky because the holding institution has
to deal through a third party institution. An institution's own
loans go through its own loan committee and full credit checks etc
can be done on the loan participant. In the case of participation
loans the originating institution is primarily responsible for
verifying that the loan is bone-fide and properly secured. More
effort is required to check up on the soundness of participation
loans. The DCU board chose to accept the paperwork from
Barnstable Credit Union as is with no verification by its loan
committee. One asks why the board didn't at least do as much
checking on these participation loans as the credit union would
have done on a loan to member. Remember the amount being
loaned/invested was enormous and DCU was knowingly taking the
majority interest in the loans.
Q: Were these "participation loans" loans or investments? Why is the
distinction important?
In the last few months at two informal meetings with the DCU Board
of Directors members asked the Board whether these participation
loans were loans or investments. The Board strenuously maintains
that they are investments. There is a good reason behind this.
The DCU bylaws rightly only permit the credit union to make loans
to its members, that's why it is a credit union and not a bank.
3
The thing is that participation loans behave exactly like loans,
especially when one institution, the DCU, holds the lions share of
any one loan. If the board admitted that these look like loans,
smell like loans and quack like loans and therefore in spirit were
loans it would be admitting that it willfully ignored the bylaws
of the credit union. The board made the point that they were
actually investments because DCU did not originate the loans. If
you look at this literally and very narrowly one is forced to
agree. But the issue remains that they effectively made loans to
non-members. The whole essence of a credit union is that loans
are only made to members.
Now here is the interesting part. These "investments" behave so
much like loans that they have been carried on all DCU statements
of conditions up to and including June 1991 as "LOANS TO MEMBERS".
No investments are listed on the asset side of the statement. In
the 1990 annual report released to members they are hidden in the
line termed simply "LOANS". In addition on the monthly DCU
statements of conditions there is a little section that lists
information on "LOANS OUTSTANDING" and their degree of
delinquency. Interestingly enough the defaults on these
participation loans (sorry I meant investments!) appear here. Eg
in August 1991 the DCU had $8.098 million of delinquent loans of
age 2 - 6 months. The overwhelming majority of these
delinquencies were on the participation loans. But I thought the
board said they were investments. Oh well I guess the answer
depends on what is most convenient to say at the time.
Back to the 1990 annual report, it is only in the notes to the
annual report that you can see that these participation loans
exist. These notes were not published and were only made
available by a DCU member (Phil Gransewicz) personally going to
DCU headquarters on his vacation time to be shown the notes. He
was not even allowed to photocopy them, he had to transcribe them
by hand. Have you ever heard before of a shareholder being denied
full access to complete financial statements?
As I'm sure you are aware on all annual reports that you read
there is the statement "these notes are an integral part of the
annual report". In fact in DCU's very own 1984 annual report the
following statement was included:
"The accompanying notes are an integral part of these financial
statements."
In DCU's annual report the embarrassing notes had been excised
along with the external auditors endorsement (the endorsement
would not have been valid without the notes). Attached to this
letter are transcripts of these notes.
Contrast the information contained in the notes with some of the
statements made in the 1990 annual report. But first it is
important to note that DCU's net income for 1990 dropped 87% from
what it was in 1989. In 1989 net income was $3.331 million in
1990 it was $0.29 million.
4
[The following comes from the DCU 1990 annual report distributed
to members, my comments are enclosed in []. It is important to
note that Mark Steinkrauss is chairman of the board of directors
and Susan Shapiro is a board member professing extensive banking
experience as well as being the DCU treasurer.]
"We will continue our prudent lending and investment practices so
that our members' investments remain safe and sound." (M.
Steinkrauss, Chairman)
[Remember this was written at the time when the board had approved
$4.406 million for a provision for loan losses including an actual
$2.696 million write off on the bad participation loans. I would
hate to think what continuing with their 'prudent lending and
investment practices' would lead to.]
"Finally, as we progress through 1991, we will continue to focus
on the security of funds while providing our members with the best
possible service." (M. Steinkrauss, Chairman)
[A bit late to do that, the board should have been more concerned
with security of funds when it agreed to enter into the risky
participation loans.]
"As the industry reported unprecedented losses, DCU's financial
performance improved with Net Income for 1990, on target at .8% or
$.3 million. We maintain a conservation cash position and invest
in only the highest quality money-market investments." (S.
Shapiro, Treasurer)
[This statement takes the cake. This is an out and out lie. Even
the annual report distributed to members clearly spells out with a
line item entitled "Net income" that net income decreased from
$3.331 million in 1989 to $0.290 million in 1990. This statement
is deception of the membership of the highest degree. At the
first informal meeting with the board Susan was questioned about
this statement. She gave no clear explanation and just seemed
exceptionally angry that a fellow owner of the DCU had asked that
question.]
"Most of our earnings were placed in reserves as we anticipate
continued pressure on the real estate market, especially in New
England." (S. Shapiro, Treasurer)
[One's immediate question is "Reserves for what?". Well of course
we were not told, that information was buried in the notes which
were 'conveniently' excised from the annual report. Another
exercise in deception.]
5
Q: How much did DCU invest in these participation loans?
At the peak DCU had over $18 million outstanding in participation
loans to Barnstable Credit Union on the summer/fall of 1990
Q: What exactly did Mark Steinkrauss say in 1987?
In 1987 Mark Steinkrauss as Chairman of the Board of Directors
made the following written statement in a mailing to all DCU
members:
Q. How does DCU invest its money?
A. Because we view DCU as the guardian of members' savings we are
very conservative in our investment policies. We reinvest
savings in member loans. Additional investments are in
government securities and federally insured banks. We deal
with the highest quality financial institutions and don't
invest in any sort of "speculative" instruments.
(Note: Quotes around the word speculative are in the original
letter.)
There is absolutely no mention of the approximately $9 million
participation loans that DCU then had outstanding in Barnstable
Credit Union. Nor is Barnstable Credit Union a federally insured
bank. The participation loans outstanding are not covered by any
clause of this statement and in fact are specifically excluded.
In the banking industry it is a recognized fact that participation
loans are somewhat speculative in nature. One has to ask why the
chairman of the board of directors thought it necessary to out and
out lie to the membership.
As an aside a fellow Digital employee I know had his father (a
senior banker) call DCU in 1988, to get information on the
institution, when he was considering doing business with DCU and
DCU was specifically asked if it took part in participation loans.
The answer was a resounding NO.
6
Q: What did Susan Shapiro say in the 1990 annual report?
This information has already been given in answer to one of the
questions above. But it is so indicative of the general board's
attitude towards the membership that it bears repeating.
"As the industry reported unprecedented losses, DCU's financial
performance improved with Net Income for 1990, on target at .8% or
$.3 million. We maintain a conservation cash position and invest
in only the highest quality money-market investments." (S.
Shapiro, Treasurer)
[This statement takes the cake. This is an out and out lie. Even
the annual report distributed to members clearly spells out with a
line item entitled "Net income" that net income decreased from
$3.331 million in 1989 to $0.290 million in 1990. This statement
is deception of the membership of the highest degree.]
Q: Why is everyone so upset with the Board of Directors I thought it
was Richard Mangone, the former president, that had committed
fraud against the DCU? What did the directors do wrong?
A: Indeed it is true that Richard Mangone committed serious fraud
against the DCU. It was Richard Mangone that presented the board
with fraudulent papers on the participation loans and backed them
up with other fraudulent documentation.
But the board has a responsibility to safeguard the interests of
the credit unions members. The board had put next to no checks
and balances in place to ensure that one fraudulent person
couldn't milk the DCU. A Credit Union of that size should have
had an internal auditor, it didn't have one. The credit union did
have a supervisory committee which was meant to ensure that there
was some level of independent review of decisions made by the
president and directors. But unfortunately to say the supervisory
committee had been dormant for years. Some say it hadn't met
since the early 80s.
Indicative of the lack of checks and balances is the fact that Mr.
Mangone simply instructed a DCU employee in June of 1990 to
transfer $3,523,915 to Barnstable Credit Union. This fact went
undetected or unacted upon by the BoD until they filed a civil
suit against Mr. Mangone in April 1991. A good question is "How
could the largest loan transfer in DCU's history have been made
without the proper authorizations." This indicates a complete lack
of checks and balances in the system the BoD had set up to
"invest" in these loans.
It is very important to note that the only director/employee of
DCU being accused of criminal activity is Richard Mangone. The
board claims people have accused them of fraud. That is
incorrect. What people have accused them of is mismanagement and
not exercising due care. The facts above tell us that the BoD was
either asleep at the wheel or failed to act appropriately given
7
the significant amount of DCU money involved. Given this past
history, we question whether we can honestly trust these same
people to continue on the Board of the credit union that DCU
members entrust with their money. The BoD's actions subsequent to
all this has been one of stonewalling, denial of responsibility,
and non-disclosure of data. Their actions have contributed to a
general lack of trust on the part of many members.
Q: When exactly did the Board of Directors first know that there were
potential major problems with the participation loans?
A: This is a difficult question to answer. When first asked the
board said the first indication of trouble it had was when
Barnstable Credit Union was shut down by the NCUA and Richard
Mangone was associated with the Barnstable Credit Union. Further
digging by Phil Gransewicz a DCU member uncovered the fact that
the DCU were notified of a suit against Richard Mangone on 25th
October 1990. In addition defaults were taking place on some of
the participation loans at that time. The board of directors then
admitted to knowing about problems back then but to this day Mark
Steinkrauss strenuously denies any prior knowledge. I have no
solid evidence that this is anything but the truth but it is known
that the board made Richard Mangone resign as an officer of
Barnstable Credit Union in 1987 due to conflict of interest. One
also has to question the timing of the statement by Mark
Steinkrauss to members in 1987 strenuously voicing the 'fact' that
DCU did not invest in 'any sort of "speculative" instrument'.
There could be many reasons, one is left to speculate!
Q: How much has the DCU actually lost due to these participation
loans?
A: An exact calculation can not be given. One of the main reasons
for this is DCU's new information protection policy which prevents
members from obtaining key information. But here is what we have
pieced together. It is fact that $4.406 million provision for
loan losses was made in 1990. Of which $2.696 million was
actually used to write off bad loans. The rest of the provision
was used throughout 1991 and more was added to the provision. DCU
received payment on a $6 million bond on its former president
Richard Mangone. Looking at the statements of condition for all
the months through 1991 in particular looking at the changes in
total equity and taking into account the receipt of the $6 million
it appears that DCU has so far (until the end of September)
written off about $9 million (it would have been $15 million had
it not received the bond money). There may be more to come. DCU
has a suit against Mangone for $10 million which more or less ties
with our calculated $9 million. So using nice round figures it
looks like DCU has taken a bath for $10 million of our money.
8
Q: What's this business I hear about missing pieces of the annual
reports? Why is that important anyway?
A: As far as we can ascertain no annual report at all was published
in 1985. Since then notes have been excluded. Notes are an
integral part of annual reports. Isn't it funny how the
interesting parts of the annual report stopped being published
right at the same time as the participating loans were entered
into? Maybe somebody figured out that the membership wouldn't be
too pleased if only it knew.
Q: What checks and balances should the DCU Board of Directors have
had in place to prevent the fraud?
A: As far as we can ascertain next to none. Some checks and balances
are now being put into effect. But this is more due to the new
president Chuck Cockburn than anything the board has done.
Incidentally I have to put in at least one good statement in favor
of the board. About the only good thing I can see that the board
has done is make a good choice for a new president. I salute them
on that achievement. Now they should get out of the way in favor
of directors who better understand the membership's wishes and
actually advocate free and open communication.
Q: Do you have any comments on the black "Choices" brochure?
A: Do you? Seriously though. I was personally insulted by that
brochure. Fancy trying to disguise new checking account fees in a
way that presented them as more choices for the membership. This
made a lot of people's blood boil. I thought at first it must
have been an aberration. But when I actually got to hear members
of the board speak (not all I must admit, but to date the board
has always spoken as one) I realized that this was just totally in
character for the boards utter contempt for the intelligence of
the membership.
9
Q: Can you give any examples illustrating the contemptuous way that
the DCU board of directors have treated members?
A: I certainly can. The following are quotes from a memo that Susan
Shapiro wrote on behalf of the whole board on October 29th 1991.
This memo was intended for readership by the DCU membership. The
complete text of this memo can be found in the BEIRUT::DCU
notesfile note 343.0 My comments are enclosed by []
"In summary, a small group of members have conducted what
would seem to be a "witchhunt" with the intent to
discredit the board of directors and the credit union.
Their efforts have culminated in a petition to remove the
present board."
[There has been no witchhunt. A number of very concerned members
have been investigating what has happened to the DCU over the last
few years. The board has continually frustrated our efforts to
get at information we consider essential to understand whether
there are any other skeletons in the closet. I went into this
process hoping that I would be able to support the board. As time
has gone by I have become more and more convinced that the board
are part of the problem, not part of the solution.]
"If the entire board is removed, there is a substantial
risk that a newly elected board would have NO experience
in management, finance, or understanding of the credit
union operations. It is, therefore, extremely important
that members attend the Special Meeting and show support
for DCU's current board of directors."
[This is a classic case of the board forgetting that they are
there to represent US the owners/members of DCU. This comes
across as very condescending towards the membership. I ask, if
the current board is so smart how come they just presided over the
loss of $10 million? There are many extremely intelligent people
throughout the DCU membership, the board certainly does not have a
monopoly on relevant experience. In addition with the correct
checks and balances in place it is the professional paid employees
of DCU from the president on down who need the detailed
operational knowledge. The board's main function is to represent
the membership and set strategic goals and very high level policy.
The above sounds like it comes from a group that genuinely believe
they are irreplaceable. I hate to burst their balloon but the
truth is nobody is irreplaceable.]
10
Q: Why should I care that the DCU has lost money through this fraud,
aren't all my deposits insured up to $100,000?
A: Indeed all deposits are insured up to $100,000. Thus your
principal is pretty safe. The issue though is that you have lost
out on equity or DCU earnings that could have been passed back to
you as a owner had DCU not lost the money. Also had DCU not been
in such good financial shape the bad loans could have made it
insolvent. You've all heard about the S & L crisis. We were very
lucky DCU wasn't part of it. As it is DCU had a high in equity of
$18.6 million in November 1990. $10 million of that equity has
been blown away. At the end of September 1991 the equity in DCU
was $13.9 million. Why was it not $8.6 million (assuming a $10
million loss) you ask? The reason is the operational profits DCU
is making. In 1990 alone it made over $4 million of operational
profit and in 1991 appeared to be making at least $150,000 per
month. This profit is coming at the expense of decent interest
rates on our savings and money market accounts. That's why so
many other institutions offer a better deal. Because of the
enormous loss on the participation loans DCU has to build up its
equity position again. DCU only has an equity/asset ratio of
3.7%. The NCUA would like to see around 7 or 8%. It will be a
long time before we see any extraordinary dividends passed around
like we were used to in the early 80s.
The only way to build up the equity base is through profits. Poor
interest rates did that in 1990. In August 1991 there was an
attempt to impose fees to gather even more profits. This was
misrepresented as necessary because of the inability to make
enough member loans. That was absolute baloney, the real reason
was to try and recover from the losses on the participation loans.
Unfortunately for the board of directors of DCU the membership
noticed this blatant attempt at hoodwinking and called their
bluff. I'm pleased to say that the new president (Chuck Cockburn)
reversed the board's decision so that he could work on a more
strategic plan for the DCU. I wish him every success in that, we
can help him by giving him a board that better understands the
wishes of the DCU membership.
Q: Exactly how much has this whole episode cost me personally?
A: The answer to this assumes that the total loss is $10 million.
That is equivalent to $114 for each of the 88,000 members. Or
another way of looking at this is that you've suffered a loss of
$30 for each $1000 you have deposited in DCU in savings accounts,
checking accounts, CDs etc. Of course if you look at your
statements you won't find this amount missing. What this amount
is is money that could have been given to you, an owner of DCU,
had the board being competent enough not to allow Richard Mangone
to defraud the credit union of $10 million. It is money that was
legitimately yours, it is gone forever. It is 3% of your hard
earned savings. That is by no means an insignificant amount.
11
Q: OK you've got me interested, what I can I personally do about all
this?
A: The DCU special meeting is at 7:30 on Tuesday November 12th at the
Sheraton Tara in Framingham. If you are at all interested in the
future of the credit union and your deposits there I suggest you
go and vote your conscience. Obviously you can tell that I
strongly believe that the board has to be voted out (they can be
subsequently re-elected should that be the members wish) but
whether you agree with me or disagree with me it is your duty as a
DCU owner/member to make your voice/vote heard in determining the
direction of your credit union.
Q: Isn't it just easier to withdraw my money and vote with my feet?
A: The answer here I believe is a resounding NO. You have far less
idea of the state of an institution that you don't own than one
you do. You own the DCU. If you had a board of directors that
actually believed in honest and straight communication with the
membership you could feel more secure about your financial
institution than one that just treated you as a customer. You
have the power to change things, you only have to use it. I hope
to see you at the special meeting.
12
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Source: Copied from DCU Annual Reports 1985-1990. This information was
contained in the auditors notes. The auditors notes were not
published with the DCU Annual Reports.
Loans Outstanding: (in thousands)
1985 1986 1987 1988 1989 1990
------ ------ ------ ------ ------ ------
Automobile 32,962 51,452 44,384 39,803 34,955 33,510
Mortgage 25,845 74,557 70,691 72,822 69,723 71,553
Home Equity -- -- 43,338 63,441 81,203 89,457
Other Secured 3,463 6,082 6,459 7,212 6,411 5,096
Unsecured 15,124 9,820 15,073 21,153 35,706 39,721
Participation loans 2,520 8,010 9,886 -- -- --
with other CU *
Commercial RE loans * -- -- -- 12,766 15,332 8,727
* = Description of participation loans changed to Commercial RE loans.
(Note: Participation loans reached a high of $18 million in 1990.)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Then around July of 1990 the first default on these loans occurred.
By the end of 1990, DCU had foreclosed or substantively repossessed about
$6 million in property that secured these loans. In 1990, DCU had
already charged off $2.6 million in losses associated with these
participation loans. Yet no mention of this significant financial
information was made in the 1990 annual report. But the auditors saw
it significant enough to include the following notes to the 1990 annual
report. (Notes that have not been made available to the DCU
membership by DCU).
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Source: Copied from DCU Annual Reports 1985-1990. This information was
contained in the auditors notes. The auditors notes were not
published with the DCU Annual Reports.
Allowance for Loan Losses: (in thousands)
1985 1986 1987 1988 1989 1990
----- ----- ----- ----- ----- -----
Balance, Beg. Year 540 1161 1159 1272 1429 1533
Provision Charged to 747 243 240 240 240 4406
Operations
Loans charged off (members) (130) (284) (187) (140) (173) (283)
Participation loans (2696)
Charged Off
Recoveries 4 39 60 57 37 21
Balance, End Year 1161 1159 1272 1429 1533 2981
(Note: $2,696,000 loss on participation loans in 1990.)
13
" (3) Loans
The credit union grants home equity loans, residential loans and
consumer loans to members. The credit union also participates in
commercial real estate loans primarily in the Cape Cod region.
Approximately 67% of the loans granted by the credit union are
secured by real estate. The ability and willingness of the home
equity, single family residential and consumer borrowers to honor their
repayment commitments is generally dependent on the level of overall
economic activity within the borrowers geographic areas and real estate
values. The ability and willingness of commercial real estate borrowers
to honor their repayment commitments is generally dependent on the
health of the real estate economic environment in the borrowers
geographic areas and the general economy."
"Real Estate Acquired by Foreclosure or Substantively Repossessed
----------------------------------------------------------------
Real estate acquired by foreclosure or substantively repossessed is as
follows:
Dec. 31 1990
------------
Land $4,131,000
Commercial Real Estate 2,562,000
----------
$6,693,000
At December 31, 1990, real estate acquired by foreclosure or
substantively repossessed included approximately $5,668,000 of
properties that were substantively repossessed."
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
14
|
| 1639.43 | Another open letter to DCU members | TOMK::KRUPINSKI | DCU Special Meeting: 12-Nov-1991 | Thu Nov 07 1991 12:22 | 62 |
| [Permission is hereby granted to forward this message to any DCU member,
by any means, provided my name and original header are retained]
Dear DCU Member,
On November 12, 1991, at 7:30 p.m. at the Sheraton Tara Hotel, located
at 1657 Worcester Road (Rt. 9) in Framingham, MA, there will be a special
meeting of the membership of the Digital Credit Union (DCU). Three
items will be discussed, each of which will have an important impact upon
the future of the DCU. You are probably aware that there is to be a meeting,
since you should have already received a notice about the Special meeting
some weeks ago.
You may be interested to know how it was that this meeting came to
pass. A message similar to the mine has been circulating soliciting
support for the current DCU Board of Directors. My message simply
asks you to attend the meeting with an open mind.
The Board of Directors of the DCU allege that this meeting is
the culmination of a "witchhunt", a small group intent upon discrediting
the directors and the credit union. Please allow me to state my own
experiences as an ordinary shareholder.
A few months ago, when I received the now infamous "choices" brochure,
I was very angry at what the DCU had done. I had occasionally followed
the DCU VAXconference, so I look to see what I might find there. I found
that many, many members had exactly the same reaction that I had. And then,
weekly, it seemed, new revelations of questionable practices were brought
to light. While it did not appear that any wrongdoing had occurred, clearly
the leadership of the DCU was moving in a direction different than that of
the membership. Attempts to communicate with the Board of Directors,
those members that we elected to serve our interest, proved to be
fruitless. One person took some initiative and made some inquiries.
He found that it was within the power of the members to reclaim the
direction and spirit of our Credit Union. Within days over 1200 signatures
were obtained, requesting the special meeting. These petitions were collected
by plain folks like myself, who simply didn't like the way the credit union
was headed, and wanted to do something positive to correct it.
Those of us who collected petitions, and those who signed it, I am sure,
certainly do not relish the idea of having the Board removed. One of the
reasons I signed the petition and put my efforts behind it were because
it called for elections as soon as possible. There are certainly many
people who belong to the DCU who are capable and willing to take on
the responsibility of serving our trust as members. Lively discussion
of the issues at hand are in the VAXconference BEIRUT::DCU. You might
consider taking a look at it.
Most people don't like to attend meetings such as this one, and I'd
certainly rather be doing something else Tuesday night. But this is
important. The DCU needs your help. If you view, as I do, the current
direction of the DCU as not serving the needs of the membership, please
consider attending. Listen to the facts. Then support the DCU and your fellow
members by voting on the questions as your conscience dictates. I'm not
asking you to drag your spouse or your teenage children along, or to support
any particular point of view. Just come and listen. Ask some questions. Vote
the way you think is right. If you'd like some more information, let me know.
I'd be happy to share with you any information, from both sides, that I have.
Regards,
Tom Krupinski
|
| 1639.45 | Run for office if you are not satisfied. | CSOA1::ROOT | North Central States Regional Support | Thu Nov 07 1991 16:51 | 15 |
| re: 44
No one has prevented you from voicing your opinion in the DCU
conference and no one is forcing you to sit by idely watching things
happen. Since you feel so strong about this (in your words harassment)
then I suggest you submit your name for nomination and run for a
position on the board or just go to the meeting and cast your vote.
Should the BoD be removed from office ALL MEMBERS will be able to vote
on the DCU's new Board of Directors and if you want them voted back in
that is your right. Personaly I want them out. I'm not one for waiting
for this thing to turn into a S&L fieasco that is in front of congress
at this very moment.
Regards
AL Root
|
| 1639.46 | | TORRID::lee | stark raving sane | Thu Nov 07 1991 19:46 | 15 |
|
Re: .44 (GLDOA::REITER)
>(I get the feeling that this campaign must be a real adrenaline high for the
>organizers, a kind of Mass hysteria, a modern day fantasy from a Frank Capra
>movie that never was, complete with Globe articles!)
Your note strikes me as being more hysterical than any I've
seen by the "organizers"
-Andy
|
| 1639.47 | Lynch Mob: Join It or Stop It | GLDOA::REITER | | Fri Nov 08 1991 11:17 | 88 |
| I apologize to those people who tried to reply to my earlier note, which I
deleted out of deference to the moderator (of the DCU notes file). I will
repost it here, though, for the record, and because I believe what I wrote
and because it was not written to offend.
But let's forget personalities for a moment...
One hundred years ago, in 1891, men, women, and children starved and froze
to death on the streets of this country. At that time, thinking people must
have felt that 100 years later this could never happen. There were no
social safety nets then, save for the private charities who did and still do
their best.
Well, we are nearing 1992 and Americans still go homeless and hungry, right
there in Boston. Some do not survive the winter. The fabric of economic
life is a delicate one and we are all woven into it.
The Digital Credit Union is the largest credit union in Massachusetts. It
is healthy and it is profitable. Among other things, it provides the
economic fuel for future growth and development of New England. Now,
granted, some of that "economic development" may have not have been the best
use of credit union funds, but that is being dealt with the way our legal
system deals with such things...
If there were to be a run or panic at DCU, the effects would be felt in an
already-imperiled New England for a LONG TIME, and the cuts would be very
deep. I would venture to say that people will be on the street, literally,
if this happens.
If you say that this is alarmist rhetoric, then go home and take the battery
out of your smoke detector, because that's just a numbers game, too. You
might not have a fire, but are you willing to risk sleeping through one?
Just what _are_ you willing to risk?
Are you willing to join the lynch mob and throw out the Board of Directors?
Is this latent 60's college sit-in behavior? Is this how adults react? Are
we taking out our frustrations about government and the economy on the wrong
people? Are we simply following the people at the front with the torches
and the coiled rope? Who will _really_ be hanged? Could a lot of innocent
people get hurt?
What positive outcome do you expect it to achieve? Will confidence in the
credit union _increase_? Seriously?
Please at least think about it, because I am not convinced that there has
been enough reflection, just momentum.
%%%%%%%%%%%%%%% VERBATIM REPOSTING of DIGITAL 1639.44 %%%%%%%%%%%%%%%%%%%%%%%
The DCU notes file has become a group tantrum thrown by Monday-morning
quarterbacks with nothing better to do than harass --- yes, clearly, harass
and intimidate --- fellow Digital employees, by name, without fear of
challenge or authority, drowning out any voice of reason, opposition,
caution, dissent, or challenge.
For whatever its trespasses, real or imagined, the Board of Directors
still manages to conduct itself with the kind of decorum one expects of
professional business people, in stark contrast to the lynch mob for whom
that file has become a personal forum.
What it has also become is a guerilla base for a political party that is
dedicated to proposition that the DCU board had something to gain from the
recent series of events at the credit union, or that there is anything
beyond vengeance to be gained by disemploying the board.
(I get the feeling that this campaign must be a real adrenaline high for the
organizers, a kind of Mass hysteria, a modern day fantasy from a Frank Capra
movie that never was, complete with Globe articles!)
With regard to the effects on the stability of the credit union, and the
possibility of a major adverse effect (read: a "run" on DCU), what if
you're _wrong_?
Look, the money game is simple --- it's risk versus reward. At what risk is
your money now --- right this minute? What are you willing to risk by
kicking over the largest credit union in the financially-troubled state of
Massachusetts?
It seems that a very slick professional has had his way with our money; now
the amateurs want to try their hands. Go. Have your party. Get drunk and
celebrate if you win. Just remember, when it's all over on Wednesday
morning, it's ALL OF OUR MONEY that you are playing with.
\Gary
|
| 1639.48 | | CVG::THOMPSON | Radical Centralist | Fri Nov 08 1991 11:31 | 37 |
| >If there were to be a run or panic at DCU, the effects would be felt in an
>already-imperiled New England for a LONG TIME, and the cuts would be very
>deep.
Agreed. In fact preventing a run or panic is, I think, partial reason
that some or all of the current board should be replaced. Had I been
on the board during all that was going on I would have resigned. I've
served on a number of boards and committees in the public and private
sector outside of Digital. One thing that I've learned is that too
long a time on such boards is generally not good for the individual,
the board or the public the board serves.
>What positive outcome do you expect it to achieve? Will confidence in the
>credit union _increase_? Seriously?
Increased confidence in the board is something I would seriously expect
to happen. I find it hard to imagine the board having less than it has
currently.
>Please at least think about it, because I am not convinced that there has
>been enough reflection, just momentum.
I know I've thought about it a lot. I've gone back and forth and read
a lot of mail flying around the net. In fact it was a message written
by a board member that finally convinced me that the board should be
changed. The failure to address real concerns bothered me a great deal.
>For whatever its trespasses, real or imagined, the Board of Directors
>still manages to conduct itself with the kind of decorum one expects of
>professional business people, in stark contrast to the lynch mob for whom
>that file has become a personal forum.
I disagree. As I said it is the failure of the board to act in the
professional and honest manner is what convinced me to side with the
insurgents.
Alfred
|
| 1639.49 | Hoping for a change | MKFSA::WENTWORTH | | Fri Nov 08 1991 11:33 | 6 |
| Let me get this straight, if the DCU's BoD are removed women and
children will starve in the streets of Massachusetts ?
I had no idea the DCU was so powerful, or so charitable.
Actually I hope there is substantial change at the DCU, I'd like to
rejoin and utilize the services but won't put up with the current third
rate business practices.
|
| 1639.50 | | GLDOA::REITER | | Fri Nov 08 1991 11:46 | 15 |
| I knew this was not going to be popular.....
re: .48
Alfred, could you VAXmail me a copy of the note that changed your mind?
Also, I see your point about longevity on boards, but let's be
honest... that's not the real issue here.
re: .49
OK, let me hear _your_ scenario of what the positive impact on the
future of economic development in New England will be if there is a run
on DCU? The banks in New England are already reeling. It is not a
pretty picture. At least DCU is still healthy... Where do you think
investment capital comes from? The state coffers?
If you just want to ridicule, please spare us the reply.
\Gary
|
| 1639.51 | some clarification | GLDOA::REITER | | Fri Nov 08 1991 11:47 | 66 |
| Here is a little clarification that I believe is in order. This is not in
response to any other note.
1. I live in Grand Rapids, Michigan. Before that, I lived in Mass for 8
years. Please do not insult me by inviting me to vote next Tuesday. (Also,
I realize that this is a function of the by-laws. So what?)
2. The harassment I object to in my 1639.previous is not (necessarily)
harassment of me, it is the character assassination of board members ---
fellow Digital employees --- people who do not follow the DCU conference.
They are accused of criminal acts and worse.
(In any case, you are not likely to read both sides of the issue in that
conference, should you be seeking balance. And no moderator alive could
possibly try to maintain order there, so don't blame her.)
I sent the following VAXmail message to the moderator of the DCU conference
yesterday after she requested that I delete the text of what is now posted
previously here (successor to 1639.44), and she suggested that I post this.
%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
From: GLDOA::REITER 7-NOV-1991 17:56:14.44
To: BEIRUT::SUNNAA
Nisreen,
Please do not think that I am some kind of trouble maker.
For years --- YEARS --- I have pleaded with people in the notes file to
exercise some restraint in attacking the hard working clerks of the credit
union, and to show some human values in dealing with people. This is
documented.
Recently, repeatedly, I have asked people to tone down their accusations of
other Digital employees who just happen to be board members.
Who I see as troublemakers are the people who have big egos and who are
succeeding in wrecking the credit union. They have all rights to wreck the
credit union under the CU's own by-laws. But when one employee charges
another of a crime and then taunts them to respond publicly in Notes, I
cannot stand idly by, even if everyone else does.
If my tone is at times strident it is because I was raised in a society
where people did not accuse others of crimes, misdeeds, or even mistakes
without proof and without giving them the courtesy of confronting them
personally. I think that the way that Mr. Steinkrauss and the others are
being treated in Notes is shameful and I cannot stand by and let them be
torn apart like that.
I cannot let the lynch mob pass my house on the way to the tree and not try
to reason with them, but it is too late here.
I have tried to be heard, I have weathered all of the hate notes and some
private hate mail. It is frustrating and maddening to try to ask for some
propriety, some decency, some restraint, and then to be treated as an
outsider, as a troublemaker.
Anyway, I will cause you nor the other DCU noters any more trouble, as I
have said before. I am gone from the file as of today.
It seems that there are no shortage of people who wish to take reprisals
against others for what Mr. Mangone is said to have done. Should [reserved]
wish to cause any reprisals against me, there is nothing I can do about
that, but I wished to let you know how I feel about how my fellow employees
(Board members) are being treated in the file.
\Gary
|
| 1639.52 | | CVG::THOMPSON | Radical Centralist | Fri Nov 08 1991 12:14 | 32 |
|
> re: .48
> Alfred, could you VAXmail me a copy of the note that changed your mind?
It's in reply .33 here. It addressed what I concider to me minor
points and ignores major ones. I do not follow the DCU conference so
do not know what issues or accusations were made there. The things I've
gotten in mail appear to be different from the things Susan was
addressing. All the mail I've gotten is also in this topic BTW. If
the board had addressed the missing annual report or explained the
dropping of the auditors notes or answered the questions around how
the participation notes where listed in the report I would have felt
a lot better. Or if they'd either supported posting an announcment in
LIVEWIRE or given a reasonable reason for it not being posted I'd feel
better. Or just given the same attention to informing the membership
about the special meeting as they do regular meetings. As it is I am
left with the impression that the board feels that if people come to
the meeting and hears the facts the board will be tossed out. If the
facts support the board I for one will support them. But they have to
date made no attempt to present the facts. Let's face it Notes are
available to them. They can post things here, the DCU conference, and
SOAPBOX and get a wide reading. I suspect that some of them even know
how to use Email. If I'd gotten mail from the board I'd have forwarded
it to all the people I forward the other DCU mail I get.
> Also, I see your point about longevity on boards, but let's be
> honest... that's not the real issue here.
Well it is a real issue for me. I've had some concerns about it
for the last two years. I can't speak for others however.
Alfred
|
| 1639.53 | CAST YOUR BALLOT!! | EPS::MAGNI | Just do it, Baby | Fri Nov 08 1991 12:16 | 47 |
|
Yes, Gary, you're right. It's ALL our money. And, if anyone thinks DCU
(or any particular financial institution) is NOT the right place for their
monies, then they should take it out. There ARE many other institutions that
are more competitive with their rates.
However, I would suggest that your commentary regarding the organizers and the
mindtrust behind it has encroached that of right-wing style scare tactics used
by Lyndon LaRouche and followers (the very thing of which you seem to accuse the
organizers of doing). Your attack of the concerned DCU members was simply out
of place.
Am I one of the "bad guys" because I don't like the way in which the investing
affairs of DCU are handled and because I don't like the idea of those people
implementing "fees" for services that have been "free" for better than ten
years? If I am, I'll wear the tag proudly!
I believe the organizers have done an outstanding job of "getting to press" the
facts that would otherwise be left "buried in the vault" and presenting them
in a fashion for all to understand. They have uncovered information that begs
of a multitute of questions that the BoD has simply refused to answer.
And to further the cause, Susan and company accused the SM committee of being
witchhunters. Excuse me, but the people at the top of DCU certainly are not
putting on the best professional face and attitute -- are these the people that
should be executing ANY policy for OUR credit union? With that type of response
to the membership, I think NOT! (If you've read management lit., you'd
understand that negative barbs are more useful to incite passions, not douse
them).
To All of You, It comes down to asking ourselves: What are the real issues
in this situation? What can (or will) we do about it? And how will we, as a
credit union, elect a BoD that will represent the interests of the members
they represent for the future betterment of this institution?
All of these questions need to be thought of. And, by the way, DCU isn't going
to get flushed down the john if the BoD is removed. There is still a good,
professional management team in place. The organizers can probably tell you
more of the details in this process than I, but I'll tell you this much -- when
the vote goes down on Tuesday evening, I'll NOT be moving my $$ on Wednesday AM.
Folks, you have a choice. On November 12, 1991 at 7:30 in the PM, you can
exercise your right to be heard! Whichever side of the fence you sit, CAST YOUR
BALLOT!!!
Warmest Regards and See You Tuesday,
-dan
|
| 1639.54 | | COMET::PERCIVAL | I'm the NRA, USPSA/IPSC, NROI-RO | Fri Nov 08 1991 12:48 | 43 |
|
Today I'm taking my banking business away from the DCU to another
institution.
I'm not doing this because of the new fees, frankly 2 dollars a month
is not enough for me to go through the hassle. I'm doing it because
after seeing the responses that legitimate requests for information
have received, I decided that I no longer wnat to do business with
this institution.
I would (and have) done this with any other business that mistreats
it's customers, even worse, it's OWNERS.
The DCU probably won't go under because I take my money somewhere
else, but if they continue to treat members in this way I'm not
the only one that will leave. Note that after the announcement of
the fees and the member reaction, the DCU's official response was
"Well, shop around". A lot of people took this advice and today
deposits are down 8% from where they were before they were told
"Take your trade elswhere".
As for the current BoD.
They failed to do the job we "hired" them to do. It does not matter
that they were fooled, or lied to, or were victims of a sophisticated
fraud. The bottom line is that they failed to protect the interests
of the members of this credit union. The failed to invest in
"conservative" instruments (as they had promised). They failed to
excersize "due care" (in my opinion) when they decided to invest
in speculative real estate deals. They failed to follow up on these
loans. They failed to ensure that adequate internal control procedures
were established and executed. And they have failed to be open and
forthright reagrding these failures.
THEY FAILED.
For this reason they should be removed, not because we don't "like"
them, not because we don't "trust" them, not for any other reason.
They should go because we gave them a job to do and they didn't do it.
Jim
|
| 1639.55 | | GLDOA::REITER | | Fri Nov 08 1991 12:59 | 21 |
| re: .53 Dan Magni
Dan,
(Just for the record, I _don't_ ever remember reading any of your
notes before anywhere.)
.53>>> To All of You, It comes down to asking ourselves: What are the
.53>>> real issues in this situation?
I wish I knew. (I _do_ know, as a former regular contributor to the
notes file where it started, that it started with vengeance over the
Mangone case, and then other issues were added as rationalizations.
Your mileage may vary.)
.53>>> What can (or will) we do about it?
I think I know the answer to that one. It's unnecessary, it's uncalled
for, it's an overreaction, and it has certain risks associated with it.
But it does have a nice ring to it, and it allows people to vent their
frustrations on _someone_.
\Gary
|
| 1639.56 | Think small | MKFSA::WENTWORTH | | Fri Nov 08 1991 13:19 | 12 |
| RE: 50
First, and I'm very proud of this, I have no positive scenario for
economic development...... I am not an economist.
I have more modest goals, an in-house financial institution that
is responsive to my needs. The current DCU is not.
I have no axe to grind with any board member. My only motive for
change is that I am dissatisfied with DCU's level of service. I'll
let the Fed worry about economic development, I'm busy developing
a new concept; Canine Condos. Think the DCU has any more $$$ to lend ?
|
| 1639.57 | | COOKIE::WITHERS | Bob Withers - In search of a quiet moment | Fri Nov 08 1991 14:08 | 77 |
| I apologize for the length of this message, but I feel strongly about the
current state of the DCU and its relationships with its members.
Wow! I havn't been called this many names in a long time!
First, I'm a "witch hunter," then a "vigilante" (what someone is who
participates in a lynch mob.)
For me, the issue started with uncompetitive rates and uneven customer service
response. But I was willing to tollerate that for the convenience.
The next annoying factor was unnanounced changes in the rules (such as the
$1000 checking minimum to get interest.) But, I was willing to put up with
this for the convenience.
Hey, there are crooks all around. It looks like Mangone may have scammed the
DCU for several millions of dollars. It happens, but I'm beginning to suspect
that there may be no one at the helm. ``Captain, my Captain! Oh, where is my
Captain?''
The final straw that made me move all but $10 from the DCU was the attempt at
communication called the "Choices" booklet. It contained an amazing set of
insults to my intelligence...including the DCU Director of Communications
telling me I didn't know how to read it. Not to mention the other fee changes
that went into effect. That's when I went Bank shopping. I've now diversified
to three other institutions and feel a lot happier and safer.
A number of dedicated people started researching the current affairs of the DCU
and ran into stone walls. What they found appears to be appaling. I'll urge
anyone interested to review notes that detail the issues.
To the DCU's credit (and thus, the board's credit) they hired what seems to be
a very competent CEO in Chuch Cockburn. He got the board to delay
implemetation of some of the fees, but in the process, the interest
calculations process changed. See the relevent notes.
Rather than responding in a forthright manner to shareholder concerns, the BOD
has basically taken two political actions:
- The instituted an "Information Protection Policy" which aims to
charge shareholders for information that is rightfully theirs and
allows the DCU to deny any request that the DCU does not view as
having business merit. "I'm a shareholder," is not a valid business
reason.
- Responded in a widely distributed open letter and several private
correspondences urging DCU members to support the board. In the
open letter, one Digital employee is, in particular, called out as
soreading false information. The people who support the removal
of the current board are called witch hunters. Lastly, the board
says that they will not permit anyone without sufficient business
expertise to run Massachetts' Largest Credit Union.
To the first point, explaining what was discovered in a reasonable
manner would have allayed the suspicions of the DCU membership.
Instead, we get accusations sent at specific DCU members. This
strikes me as a "Willie Horton" tactic.
Secondly, calling me names won't change my mind, but may get others
angry instead. "Unprofessional" is the best adjective I can find.
Lastly, I'm aghast at the Massocentric arrogance of the DCU Board's
stance that they will not allow someone to ruin their credit union.
Excuse me, folks, but this is the Digital Employees' credit union.
The BOD are members just like the rest of us.
The open letter from the board was the last straw. I've supported removing the
board since the "Choices" brochure, but I'm unshakable now.
If the current board are removed, I will begin doing business with the DCU
again. If they remain. I will maintain my $10 in my account so I can vote
against the incumbent board members next spring.
I apologize again for the length of this message, but this is something that
all DCU members should take a stand on even if they chose not to participate.
BobW
|
| 1639.58 | | CROW::KILGORE | DCU Meeting, see BEIRUT::DCU | Fri Nov 08 1991 14:23 | 33 |
|
GLDOA::REITER:
You hold that some of us have become a "lynch mob". I hold that the
level of networking we have attained in addressing this situation
disallows the possibility of a "lynch mob" mentality.
After many months and tens of thousands of lines of NOTEs, plus
unimaginable private communication via MAIL, we have discussed the
situation to death, and there still remains the basic and seeming
unrefutable fact: the current Board of Directors of DCU has withheld
information rightfully owned by the members of the DCU and necessary to
their thoughtful evaluation of the health of the DCU.
A lynch mob operates on fear, prejudice, intense emotion and an absence
of facts and reasoning. When your running down the street to the
hangin' tree, you don't have time to look over the evidence and
separate fact from fiction; you follow the leaders and repeat their
chants.
This is not a lynch mob. We are not mindlessly following the leader. We
have hypothesized, investigated, argued, refuted, and occasionally gone
off on hysteric or paranoid tangents that have been reined in by cooler
heads. A network of incredibly diverse, above average intellects has
processed the information at hand and come to a painful conclusion: the
board of directors is not responsive to the wishes of the members, and
must be given a decisive vote of no confidence.
I have faith that the same minds that contributed to that conclusion will
see some of your comments in previous replies as relying on the very same
"lynch mob" mentality you accuse us of propagating, and will give those
comments the weight they deserve in the total equation.
|
| 1639.59 | | GLDOA::REITER | | Fri Nov 08 1991 14:59 | 18 |
| re: .57 Bob Withers
Pardon the brevity of my reply, but could you tell me exactly what is
this "open letter" from the Board. I am a member of DCU and yet I have
received nothing from either the Board or DCU except for the gray-paper
Special Meeting Notice.
All I have seen beside that is one note posted once in the DCU notes
file.
Sounds like more innuendo to me, but then I am not privy to the
official channels that some people seem to be.
There is no monopoly on name-calling; that is a canard if ever I have
heard one. It just detracts from the issues. Let's at least keep the
labels civil, and refrain from accusations of criminal activity and
collusion.
\Gary
|
| 1639.60 | Response fo DCU BoD | GUFFAW::GRANSEWICZ | Someday, DCU will be a credit union. | Fri Nov 08 1991 15:15 | 275 |
|
This response, as well as the DCU BoD response (.33 I believe), was
sent to all people on distribution. We would welcome similar,
balanced access to communications vehicles (LiveWire, DCU Network
Brochure, etc.) so that all members can hear both sides of the issues.
[Permission to forward or re-post this note is granted. However, the
original note header and names at the end of the note must be
retained. The contents of the note may be shared with any DCU member.]
7 November 1991
Dear Fellow DCU Members:
The following message is from several concerned DCU shareholders.
This message represents some of our beliefs and opinions. It
should not be construed to be representative of a larger body of
individuals, and it specifically may not represent the opinions
or beliefs of any DCU member other than those whose names appear
at the conclusion of this message.
On October 29, 1991, the members of the DCU Board of Directors
posted a note in the VAXnotes DCU conference. This posting was
the Board's response to postings in the conference that they
allege contain mis-information and false or misleading
statements. As concerned shareholders and members of the credit
union, those of us who have signed this letter would like to take
this opportunity to respond to the Board's recent posting and
offer our view as counterpoint to the Board's statements.
The Board of Director's View of Our Efforts
-------------------------------------------
The DCU Board of Directors has characterized the people behind
the recall petition drive as being a small group bent on
discrediting the board of directors and the credit union. They
allege that our intentions are to harass the board until they
quit. We disagree strongly with this characterization. Over
1,000 petitions were filed with DCU requesting the special
meeting. This is a true grass roots movement. Concerned
shareholders worked in cafeterias and other non-work areas at
many sites across the country, in full accordance with Digital
Equipment Corporation's "Orange Book" policies and procedures.
In just a few days, we were able to gather in excess of
1,200 signed petitions.
Our Goal for Digital Employees Federal Credit Union
---------------------------------------------------
It has not, and is not, a goal of any of the undersigned to take
control of the credit union, or to discredit its good name. On
the contrary, we are most proud to be members, shareholders, and
owners of one of the largest credit unions in the U.S. Our primary
goal is insure that our credit union - and our savings - are
managed appropriately, and prudently, by individuals in whom we
can place, and verify, our trust. We hold to the philosophy that
credit unions are member-owned, member-controlled institutions
established for the purpose of providing above-average interest
on member savings, and highly competitive rates on loans to
members. We believe that credit unions are not banks or S&Ls, and
that the management of a credit union is ultimately responsible
to the shareholders.
Information Control by the Board
--------------------------------
In their posting of October 29th, the Board wrote that the NCUA,
as well as independent auditors and legal counsel, having
conducted extensive investigations, concluded that no board
members, official, or staff member of the credit union, other
than Richard Mangone, was involved in any wrongdoing. As
shareholders, we are pleased to hear this. On the other hand, it
has been nearly impossible for concerned shareholders to verify
this statement. Members have asked, and continue to ask, the
management of DCU to provide reports or other data as conclusive
evidence that nobody other than Mangone was involved. The Board
of Directors, through DCU management, has provided relatively
little documentation to substantiate this claim.
The board says that a small group of shareholders has inundated
DCU with information requests, and that DCU has responded by
granting a majority of those requests. This has not been our
experience or observation. The Board has granted only a minority
of the requests that have been made. Other requests for data have
either been denied, placed under review, or simply ignored.
We believe that DCU has a legal obligation to provide access to
certain financial documents and business records to its
shareholders upon demand, so long as a proper business reason is
given. There are legal precedents to support this belief. We,
the undersigned, would like DCU to either grant our reasonable
requests for information, or cite appropriately why under law
the requests cannot be granted.
The Board would like you to believe that as they worked hard to
grant member requests for data, that requests for more data
increased, and that unsubstantiated allegations increased. We
disagree with these statements. We have worked carefully to
examine the data that has been provided to us, as well as the
data that we have located in the public record. We have made no
attempts to convey or repeat statements known to be false. We
have raised concerns that have grown out of our analysis, but
have been cautious and prudent in our use of information.
Who is the Board Protecting?
----------------------------
The Board claims that it's Information Protection Policy exists
for your protection, and to recover costs associated with
providing data for unusual requests. The Board writes that
written requests for data must be for legitimate business reasons
and not for the purposes of harassment. Those of us who are
requesting data from the credit union are not attempting to
harass the credit union or its management. We do not see
anything unusual about requests for information we believe we are
lawfully entitled to review. In fact, given the stringent nature
of state and federal legislation regarding information disclosure
and confidentiality, we question the need for any additional
information "protection" policies whatsoever.
Other Complaints by the Board
-----------------------------
The Board writes that they had two informal member meetings, each
of which lasted 4 hours. This is a true statement. What the
Board neglected to tell you was that the first meeting was called
with only 24 hours notice. At both meetings Jim Rice,
a lawyer working for DCU, carefully controlled what the board
members said, and frequently intervened in the discussions. We
feel that the meetings were not frank, informal conversation with
our board, but rather orchestrated encounters, carefully
controlled by legal counsel for the board.
The board writes that users of VAXnotes have accused the board of
being compensated. This is not true. VAXnotes contains
long-running "electronic conversations." Writers have asked if
the board was compensated, and replies have been written stating
that the board is not compensated.
The board writes that they have been accused of not scheduling
the Special Meeting within the time frame established by the DCU
Charter. A careful reading of the federal charter reveals subtle
differences in charter language regarding the use of the words
"call" and "held." We believe that the board is within its
rights to schedule the meeting for November 12, 1991, and we
encourage all DCU members, regardless of which "side" you are on,
to attend the meeting and vote your conscience. We criticize the
Board for not clarifying the issues of the charter language
several weeks ago when the issue of calling the Special Meeting
was first raised.
The board states that the credit union is at risk of being
controlled by individuals with little or no experience in
management, finance, or understanding of credit union operations.
We believe this assertion is inaccurate. The membership of DCU
represents an incredibly diverse body of people of great
intellectual ability. We believe that many qualified members
will step forward and run for the board should the recall effort
be succesfull.
Efforts to Communicate?
-----------------------
Mark Steinkrauss, Chairman of the Board of Directors, recently
wrote to members asking them to attend the meeting and support
the board of directors. He wrote, in part:
"Efforts to communicate with this group to date have not yielded
any constructive results. This small group has conducted what
would seem to be a "witchhunt" with the intent to discredit the
board of directors and the credit union."
On October 28 1991, some concerned shareholders met with Mark
Steinkrauss, and with Chuck Cockburn (President of DCU) in a
forum moderated by Rob Ayres (DEC Laison to DCU) in order to
create a dialog and open channels of communication with DCU. It
was the intent of the meeting to air common concerns, and try to
establish common ground.
The very next day, October 29th, the Board of Directors posted
their message in VAXnotes. This message, and well as Mark
Steinkrauss', both accuse concerned shareholders as engaging in a
"witchhunt." We find the characterization offensive and not
accurate. Further, we find these types of remarks unproductive -
especially given recent efforts to establish a dialog between DCU
and concerned shareholders.
Facts for your consideration
----------------------------
As concerned shareholders, we would like to enumerate some of the
facts that we have gathered. These facts, in part, are what have
led us to the conclusion that the current board must be replaced,
and that fair and open elections for new board must be held
as soon as as possible.
FACT: DCU Board of Directors did not provide complete notes to
financial statements to shareholders
Since 1984, the credit union has not published notes accompanying
it's financial statements. Notes to financial statements are
important in understanding the overall condition of the credit
union. Had members been provided with notes to statements in
years past, the fact that the credit union was making
participation loans would have been known much earlier.
FACT: DCU Board of Directors has made incorrect or mis-leading
statements about DCU investments
DCU made participation loans on the following dates. The
following chart shows only some of the participation loans, not
all.
Digital Total
Date Share Amount Borrower
===================================================================
04/30/87 $1,241,936 $1,750,000 Highview Realty Trust
04/30/87 1,947,170 2,450,000 Perch Pond Realty Trust
06/02/87 2,655,000 2,950,000 Santuit Woods Realty Trust
06/15/87 1,530,000 1,700,000 Signal Hill Realty Trust
10/08/87 1,138,830 2,150,000 Second Green Island Trust
03/02/88 1,146,600 1,525,000 Plainfield Development Realty Trust
03/23/88 1,615,500 2,400,000 Curtis Village Realty Trust II
10/19/88 2,250,000 2,500,000 Walcott Realty Trust
Approximately 7-1/2 years after the credit union's 1980 founding,
Mark Steinkrauss, Chairman of the Board, wrote to DCU members:
"Q. How does DCU invest its money?
A. Because we view DCU as the guardian of member's savings we
are very conservative in our investment policies. We reinvest
savings in member loans. Additional investments are in
government securities and federally insured banks. We deal with
the highest quality financial institutions and don't invest in
any sort of "speculative" instruments."
***
In conclusion, we feel that the Board of Director's accusation
that we are on a "witchhunt" (their word), is an unfair
characterization of our intentions. We feel that the Board, by
their past actions in the making of real estate participation
loans, and by their subsequent attempts to withhold information
from shareholders, have not served in the best interests of the
members of DCU. Our only intention is to exercise our rights as
shareholders, and put the matter of the future direction of the
Board squarely where it belongs - in the hands of credit union
members.
Sincerely,
Phil Gransewicz Christopher Gillett
Larry Seiler Ron Roscoe
Paul Kinzelman David Garrod
Bill Kilgore Robert Ainsley
Concerned DCU shareholders
|
| 1639.61 | The answer is plain | SMOOT::ROTH | The 13th Floor Elevators | Fri Nov 08 1991 15:32 | 8 |
| .57> Lastly, the board
.57> says that they will not permit anyone without sufficient business
.57> expertise to run Massachetts' Largest Credit Union.
I would suggest that the reason many want to vote the current board out
is contained in the above sentence.
Lee
|
| 1639.62 | One member's story | DEMON3::CLEVELAND | Notes -- Fun or Satanic Cult??? | Fri Nov 08 1991 15:37 | 39 |
| I don't want to get into any accusations here. I'll just state my
story: I was an occasional reader of the DCU conference, and
sometimes felt that people didn't give the credit union a fair shake.
Then one day, someone stuck a story from the Cape Cod Times on the
wall by our coffee station. It was the initial news story on the
collapse of Barnstable Credit Union and Mangone's involvment there.
I wrote a note into BEIRUT::DCU about the story. Within days, Mangone
was fired. I saluted the Board for their quick action--it seemed at
the time they had "done the right thing".
Over the next few months, the rest of the story came out...the fact
that DCU had loaned money to Barnstable CU, loans that had gone sour.
Still, I gave the board the benefit of the doubt...they were
volunteers, and Mangone had fooled them as he had fooled others.
For me, the attempt to take away free checking -- driven, I believe,
by the losses incurred in the "participation loans" -- finally pushed
me over the edge. The Board had clearly made a mistake--free checking
was just about the last attraction many of us had to the DCU. Money
began to leave the credit union -- many accounts were closed, and
others were almost closed (leaving $5 behind so they remained
members in name only). I, and others, began to read the credit union
bylaws and financial reports. I realized the board/credit union had
kept these loans hidden from the membership, even once they started to
go bad.
To me, the crux of the matter is these loans. Credit Unions, by
definition, make loans only to their members. The board considered
these loans "investments" to get around this. Even then, they failed
to take care and "spread" the risk of the loans to other credit unions.
Their actions were the antithesis of what I want "our" credit union to
do. I was embarrassed to see the name "Digital" mentioned in an
article about a failed credit union.
I want the membership to have a chance to change the direction the
credit union is heading. That's why I'll be voting Tuesday to remove
the board, and call for new elections.
Tim
|
| 1639.63 | | SSDEVO::EGGERS | Anybody can fly with an engine. | Fri Nov 08 1991 15:38 | 4 |
| Re: .59
I believe the "open letter from the board" is the note
posted in beirut::dcu topic 343.0. Press KP7, etc.
|
| 1639.64 | Some reactions to earlier notes | RGB::SEILER | Larry Seiler | Fri Nov 08 1991 17:24 | 97 |
| re 1639.47 and 1639.51,
In my opinion, notes files exist to let everyone state their opinions, even
when the opinions are extreme, although the moderators of each notes file
are free to set their own standards. So I have no problems with the posting
of notes .47 and .51. I'm glad that the author states that there is no
intent to offend anyone, and I hope that the author and other readers will
trust that I also have no such intent.
I feel that most of the points in these two messages are adequately answered
elsewhere in this note, and if not there in the DCU notes file. However,
there are a few points that I feel should be discussed further.
1) Is the effort to force new elections for the board an exercise in
venting frustrations? Certainly not in my case. In my carefully considered
opinion, the board has failed (by their own statements) to live up to the
level of fiscal responsibility and integrity that I feel is essential for
the long term survival of the credit union. Therefore I feel that the best
thing for the credit union is to replace them. This point isn't addressed
very much in the notes I am responding to, but I feel that it critical to
dealing with this issue.
2) Is the Board being character assassinated in a forum they don't follow?
Certainly not. Mark Steinkrauss, at least, is a very careful follower of
that notes file, although he chooses not to make replies. Nor do I feel
that a charge of character assasination is fair. They have been charged
with doing a poor job as board members (with lots of documentary evidence
to back up those claims), but I recall few if any notes that refer to
their characters. Unless, of course, you refer to the notes where people
say that they consider one of Mark's statements to be a lie. In that case,
the facts are clearly laid out, and everyone who reads those notes can
decide based on Mark's own published words whether they agree or disagree.
3) Is the board being accused of "crimes, misdeeds, or even mistakes
without proof and without giving them the courtesy of confronting them
personally"? First, they are not being accused of crimes, second,
voluminous proof is offered in almost every instance, and third, there
have been a number of personal meetings at which these charges have been
discussed with board members. I've been at three myself, and I'm not even
one of the organizers of the special meeting. It's unfortunate that people
outside the New England area do not have an opportunity to attend such
meetings. However, those meetings have been carefully described in the
notes file, in as fair an unbiased a manner as possible. Opinions on
the meetings have generally (and properly) relegated to separate notes.
4) Is the way Mr. Steinkrauss being treated in the notes file shameful?
That's a matter of opinion. I personally think that nobody who is in
charge of communicating with DEC's investors can have a very thin skin.
I also feel that the board has given about as good as they've got, if
we are talking about rhetoric, including some addressed to me personally.
In any case, I agree with you that we all need to talk rationally and
discuss the issues. There are real and substantive issues here -- it is
not (as one Board member said to me) simply a matter of perception.
5) Is the Board of Directors conducting itself "with the kind of decorum
one expects of professional business people, in stark contrast to the
lynch mob"? Again, I regret that circumstances prevent people outside the
New England area from attending meetings with board members. I entered a
note in the DCU file that Board member and DCU founder Charlene O'Brien
stated was fair and accurate -- and that note contained my criticim of
the way the Board's lawyer attacked me and others at the meeting. Anyway,
instead of saying more on this topic, I'll simply note that I disagree.
6) What should be done in cases where a DEC employee feels threatened or
harassed by a note or email message, or feels that they are the subject
of reprisals? These issues should be taken to personnel, for an objective,
unbiased hearing. Personally, I have never engaged in reprisals, threats,
or harassment, and do not feel that anyone else should, either. However,
it is possible for feelings to be hurt and for misunderstandings to occur,
so I feel that it is important to discuss any such concern with an unbiased
observer before carrying things further.
7) Is anyone attacking the hardworking clerks of the credit union?
Not that I know of, quite the contrary, 99% of all notes that mention
DCU employees defend them. But they are in a tough position. For the
last several months, much money has been withdrawn from the DCU -- I think
because of loss of faith in the board, and that's a serious problem.
The best thing we can do for the hardworking employees of the DCU is to
stop that trend by restoring faith in the policy and direction of the DCU.
I am working as best as I know how to achieve that.
8) Last and least, I'll note that I personally am getting nothing from
this whole mess. Quite the contrary, I'm losing a lot -- time, evenings
with my family, and a lot of sleep from the depression that I feel over
my conclusion that the DCU would be far better off if this board were
removed. I do think that many Board members (not all of them) feel that
they are taking justified and appropriate actions; I can only say that
I feel they have lost touch with the reality that they exist to serve
the membership and to exercise the sort of oversight that was so painfully
lacking as Mangone perpetrated his fraud. I respect those who have looked
at the data and disagree, but I don't think anyone has a right to challenge
the sincerity and carefullness of my own investigation of these issues.
Yours most sincerely,
Larry Seiler
|
| 1639.65 | No confidence | ACOSTA::MIANO | John - NY Retail Banking Resource Cntr | Fri Nov 08 1991 17:34 | 32 |
| I have not been one of not associated with any of the "witch hunters"
nor any of their activities, so left me calmly state my opinion as an
opinionated reader/member.
The DCU has been the victim of criminal wrongdoing. Mr. Mangone has
certainly been involved, but was their anyone else? It is theoretically
possible that some of the directors could have been involved? While I
have seen no accusations of criminal activities on the part of any
member of the board the board is none the less suspect.
Obviously this affair needs to be investigated and controls need to be
put in place to insure this does not happen again. However, who does
the investigation? Any investion led by the current board, even if
every member is completely blameless, is going to be suspect.
It is therefore imperative that this matter be propperly investigated
and that the investigation be led by people who were not involved in the
incidents being investigated.
An independent investigation will probably exonerate the board. There
is no way to complete prevent downright fraud. It seems to me that this
ought to be obvious to the members of the board and I am surprised that
none have had the decency to resign. There should be no shame in
stepping aside but to be kicked out is another matter.
As an out-of-stater I unfortunately will not be able to attend the
meeting. If I were I would vote to replace the board. If the board is
still in placed after the next election I am going to give the DCU a
personal no confidence vote and take out all of my money. I am willing
to be that a substancial number of members will do the same.
John
|
| 1639.66 | | GLDOA::REITER | | Fri Nov 08 1991 17:50 | 24 |
| There may be some minor inaccuracies in any of the million or so notes
available on the Easynet. I point this out because I have no desire to
engage anyone in a series of note extractions and volleys of trivia.
I stand by every word that I have written, and could not have felt
comfortable otherwise. I will not be drawn any further into rebutting
inaccuracies in other's notes, or in defending any of mine.
I have neither the time nor the interest to analyze, let alone rebut,
any volume of replies on a point-by-point basis. And if I did, I'm not
sure what, if anything, it would accomplish, since this is an issue of
opinion, and does not hinge on the correctness of facts, but more upon
emotion (as opposed to reason).
Let us leave that subject.
In the final analysis, people will do whatever they (consciously or
subconsciously) believe is in their own best interests.
Whether or not the choices they make actually end up serving their best
interests is another matter, and only time will tell. But the choices
are initially theirs to make.
That's all I'm saying.
\Gary
|
| 1639.67 | | SSDEVO::EGGERS | Anybody can fly with an engine. | Fri Nov 08 1991 18:08 | 9 |
| Yes, there is a lot of opinion involved. But there are also a lot of
known facts. Dismissing the issue as opinion only, and not looking at
the facts that are known, is not a reasoned way to come to a conclusion
or to make a vote.
The beirut::dcu notes conference has lots of facts in it. If you
choose to not look there due to lack of time, well, we all have to make
choices. But please don't dismiss the facts merely because you don't
have the time to look at them.
|
| 1639.68 | gee whiz, guys | GLDOA::REITER | | Fri Nov 08 1991 19:30 | 44 |
| re: .67
If you are suggesting that I have not examined the "facts" as they are
posted in DCU Notes, I need to point out two things to you, as we have
discussed offline:
(1) I am one of the longest continuous contributors to that file that I
am aware of. I am speaking of multiple years. Up until yesterday, I
had read virtually everything that had been entered. I can not let:
>>> please don't dismiss the facts merely because you don't
>>> have the time to look at them.
go by without responding... but, you see, this is EXACTLY what I was
referring to... this silly one_for_one responding to other people's
misconceptions. This has nothing to do with FACTS, just misconceptions
and false assumptions.
Oh, yes...
(2) Just because something is posted in Notes does not make it a fact.
Is that a revelation? :7) Hopefully all of the financial data that
was taken from public sources is accurately transcribed into the DCU
file but, beyond that, most of the balance is not, to put it gently,
"factual information".
I hope no one thinks that this whole travesty is a simple matter of
"letting the facts speak for themselves"! Once again, the DCU Notes
file is, by definition, one-sided, and I will explain why. As for
finding "facts" there... well, that's another subject entirely.
The other thing: since this started, I have been receiving a lot of
mail asking me where I can find the Board's position on this matter.
Please remember that the Board's official reluctance to utilize the DCU
Notes File (except on one occasion) as a forum is directly related to
the FACT that the conference is not a forum for all members, and that
DCU and Digital are legally separate entities. But people will still
stand there and throw pebbles up to the window, taunting some hapless
board member to respond there, as if their inability to respond was
proof of something. That taunting is the kind of childish behavior
that has made DCU Notes what it is today, the moral equivalent of
wilding.
Remember, the future of DCU and the stability of the largest financial
institution of its kind in New England is in your collective hands.
Have a wild time!
\Gary
|
| 1639.69 | | SSDEVO::EGGERS | Anybody can fly with an engine. | Fri Nov 08 1991 21:16 | 3 |
| Re: .-1
Hmmm. That's not how I read .66, so thank you for your clarification.
|
| 1639.70 | | LEDS::PRIBORSKY | I'd rather be rafting | Sun Nov 10 1991 14:31 | 69 |
| First, a general statement about this conference: Several years ago I
stopped reading this conference at all because of the essentially
problem-driven nature of almost everything that goes on here. All I
saw was people agreeing that there were problems (in fact, as in most
conferences, most notes came from a few individuals).
I went through the same thought process in the DCU conference in early
October. After the Mangone fiasco, the conference participants decided
that the BoD ought to be their next target, and that instead of
handling the problem through the normal processes, that the convenient
way would be "trial by VAXnotes". My stand on what is happening there
is quite open. For nearly three months, the conference has evolved to
the point where it has taken on a personality all its own. Quite
frankly, I don't like that person. I think what has happened in that
conference ought to be analyzed by some sociologists and psychologists.
It's a study in mob psychology.
When I asked there that people stop ragging on this issue - it's going
to be decided on Tuesday - and instead turn to the tone of the
conference into constructive talk about how to fix the problems that
Mangone, and to a certain extent, the BoD, has brought, I got some very
threatening MAIL and phone calls. When I asked what they were going to
do to fix it, noone gave an answer. "We'll oust the BoD and then try
to put the pieces together". Gimme a break.
Don't get me wrong: If I supported the current BoD, then I wouldn't be
seeking to unseat one or more of them in the regular elections. (Only
time, and the NCUA will tell if this is now accelerated.) However,
when I've asked the current board questions, I've gotten very high
level of cooperation.
This activity has and will damage the DCU for years. I have considered
carefully even my own candidacy - it is going to be extremely difficult
to be an effective BoD member. The scrutiny that will be paid to every
action of the BoD will probably impede its effectiveness. I also
believe it will make it difficult to draw members to the BoD for
exactly the same reasons that elected politics is where it is. When
was the last time you voted FOR someone for political office instead of
voting AGAINST an incumbent? This is unfortunate, but true here as
well. If the current BoD is removed on Tuesday, and some (or all of
them choose) choose to run - and it is within their rights to do so -
they will fight an uphill battle, even though some/many/all of them are
just as qualified for their positions today as they were in 1990.
I also see the distinct possibility that a few vocal members will
attempt to "micro manage" the DCU from without. I hope that you will
give the new BoD a chance to work with Mr. Cockburn to establish
credibility with you. If elected, I for one will be very attentive to
you (having had Six Sigma drilled into my brain) but want to remind you
(as I have been) that we are not always aware of everything going on.
As for myself, I will not run a candidacy in NOTES conferences. I will
answer MAIL and phone calls, but I am not a regular participant in
either the DCU or DIGITAL conferences, so don't expect a timely
response to any questions posed there.
I saw reference to this note in the DCU conference, and decided to
check it out. I'm not surprised, given the prvious tone in this
conference in general, and the carryover of the DCU notes, that things
aren't different here.
It's a pity.
Please, put on your thinking caps on Tuesday. Don't let the emotional
pot stirred by a few overshadow logic and reason.
Meanwhile, I hope that after Tuesday, as much effort is put into
creatively trying to buoy up the DCU as has been put into trying to
tear it down.
|
| 1639.71 | Cape Cod Times Article | SMAUG::GARROD | An Englishman's mind works best when it is almost too late | Sun Nov 10 1991 16:34 | 159 |
| <<< BEIRUT::R7XBOK$DIA0:[NOTES$LIBRARY]DCU.NOTE;4 >>>
-< DCU >-
================================================================================
Note 360.0 Cape Cod Times Article No replies
AOSG::GILLETT "And you may ask yourself, 'How do I" 153 lines 9-NOV-1991 23:39
--------------------------------------------------------------------------------
[reproduced without permission from the
Cape Cod Times, Saturday 9 November 1991]
CREDIT UNION DIVIDES DIGITAL
Cape fraud case linked to issue
by
Susan Milton
staff writer
HYANNIS - Employees at an international computer company are
fighting over how to run the largest credit union in
Massachusetts due, in part, to alleged fraud at a Cape Cod credit
union.
The dispute involves the Digital Equipment Corp., its $383
million Digital Employees Federal Credit Union, and the ripple
effect of millions of dollars of losses at the now-closed
Barnstable Community Federal Credit Union in Hyannis.
The month-long campaign for control will end Tuesday at a meeting
for the Digital credit union's 88,000 members at the
Sheraton-Tara hotel in Framingham. By filing petitions, 1,221
shareholders forced a meeting with this agenda:
- To recall the present board of directors.
- To elect a new board in 90 days.
- To rescind controversial checking fees and minimum balances.
To win votes, both sides have engaged in a month-long campaign of
words and issues, aired through electronic bulletin boards, mail
and messages that link the computer company's employees at
various work sites in 83 countries.
It is the kind of campaign possible at Digital Equipment Corp., a
pioneer and world leader in interoffice communications and
networks.
Much of the campaign, sparked by proposed new fees on once-free
checking accounts, is about how a non-profit credit union should
serve its owners.
"A lot of people feel that the (Digital) credit union began as a
credit union and slowly turned over the years into a bank," said
Christopher Gillett, among those petitioning for a change. "We
don't want a bank, we don't need a bank. We need favorable
interest on our savings and favorable rates on our loans."
A related campaign issue is the credit union board's $18 million
in losses from 12 speculative commercial loans that were funneled
through the Hyannis credit union.
Phil Gransewicz, another petitioner, said, "It's basically a
matter of trust with the board. We don't feel they've been open
and forthcoming with information and the facts of what's
happened."
The intent of Tuesday's meeting is simply to provide a
referendum, one vote per shareholder, on the credit union's
policies and future direction, according to Gillett.
Neither side would release any written campaign statements for
publication.
"It's an internal issue between the board and members which will
be resolved at the special meeting," said credit union
spokeswoman Mary Madden yesterday. "The board doesn't feel a
public forum to discuss it is necessary."
According to one source, board members have warned shareholders
that their opponents are on a "witch hunt" to discredit the board
and the credit union. Its removal, the board said, would be
disastrous and, at best, paralyze the credit union for several
months.
In response, Gransewicz called the loosely knit opposition "a
grassroots movement." Also, Gillett said, if shareholders should
want a new board, the company has many qualified people that
could run for the board.
Both sides are trying to convince credit union members, who must
be past or present Digital Employees and their families. The
credit union now has 88,000 members, including about 20,000 who
are not current employees.
Neither side would speculate on the numbers of people involved in
the dispute.
"If they know how many we are and where we were (at Digital
sites) it would disclose the true organization and size of the
effort," Gransewicz said.
Ms. Madden reported fielding several calls, some from
shareholders concerned about the removal of the entire board "and
what seems to be a small group of people, able to decide the fate
of a credit union."
The stakes at Tuesday's meeting are higher than the $35,000 cost,
estimated by the board, of calling such a special meeting.
Serving on the board are vice presidents and other high-ranking
officials at the computer company. For example, Mark
Steinkrauss, credit union board chairman, is Digital's director
of investor relations. He also will lead the special meeting,
which will be closed to the public, Ms. Madden said.
They have the official blessing of the corporate leaders,
according to a recent flurry of campaign endoresements and
statements.
Digital executives have told subordinates, via personal computer
messages, that their support for the board would be appreciated
at next week's meeting.
Yesterday, the company itself, via spokesman Nikki Richardson,
publicly endorsed the current credit union board and management,
and described the credit union as stable.
The credit union was founded in 1980 as a benefit to Digital
employees and the company itself is a credit union member
(depositor) "so of course we are interested in its well-being,"
she said.
Digital employees read a similar endorsement, posted
electronically, from corporate Vice President/Treasurer Ilene
Jacobs, who noted the credit union's many challenges last year.
Among those challenges was the Barstable credit union scandal,
revealed in March when federal regulators took over the credit
union.
Among its leaders were two people linked to the Digital credit
union - Richard Mangone, its president since 1983, and longtime
counsel Rober Cohen of Newton. They are among five defendants
later charged with $47 million of fraud at the Hyannis credit
union.
In addition, the Digital credit union board fired Mangone in
April and sued him in June over $18 million in 12 bad loans,
ranging from $1.2 million to $4.1 million.
The pending civil suit claims that Mangone originated the loans
at the Hyannis credit union and, using faked and falsified loan
documents, convinced the Digital credit union board to buy 70 to
90 percent of the large loans.
Angry shareholders only discovered the Cape-related losses in
unpublished auditor's notes in August, when they looked for
reasons why Digital credit union may need new fees to generate
new income, Gransewicz said.
|
| 1639.72 | The notes files are only part of the story | RGB::SEILER | Larry Seiler | Mon Nov 11 1991 10:14 | 56 |
| re .70,
Thanks for stating your opinion so clearly and logically. One thing that
I can't figure out from your note, though, is whether you went to any of
the meetings with Board members at which some of the concerns raised in
the DCU notes file have been discussed. If you haven't, then I don't
think you have any grounds for your assertion that the Board's lack of
cooperation is the fault of those asking the Board questions.
If you have, then I don't understand why you talk as if the notes file is
driving the opinions of the people organizing the effort to replace the
board. I have observed just the opposite -- that their meetings and
discussion with board members, as well as independent information such as
court filings, is what drives their opinions. I got my introduction to
the whole problem at the second informal meeting with the board (attended
by and dominated by the Board's lawyer), and that's what I saw happening.
Certainly I can say that my meetings with Board members are what formed
my opinion -- the Notes file is just a place to discuss it.
You end by saying that you hope that "as much effort is put into creatively
trying to buoy up the DCU as has been put into trying to tear it down."
I'm not sure why you think you have the facts to say that this isn't already
being attempted. I sat in a meeting recently with Chuck, Mark Steinkrauss,
and several of the principal organizers of the special meeting, and listened
to one of them explain in great detail exactly how the Board could win the
special meeting and defeat his own group, by fixing one of their mistakes.
It was a very polite meeting, and we got a very polite "no thank you" by
mail afterwards. And that is the last and least of the efforts I have seen
to help the Board see and solve some of the real problems facing it.
It's too bad that no one who has called you has any ideas of how to fix the
DCU. Perhaps the people who have written out such ideas in great detail in
the DCU notes file are simply not the ones calling you. I have one simple
such idea -- the Board should believe that the members are owners and act
accordingly. Mark Steinkrauss told me *personally* that he disagrees, and
his actions and statements to me are all consistent with his viewpoint.
When I vote in the Spring, I'll be voting *for* people who think as I do.
Fears about micro-management of the DCU in future are valid -- it's always
a temptation to bird-dog a person or organization who has screwed up badly.
(I don't say that because there was a fruad -- I say that because of their
poor policy decisions, including neglect of basic checks like an internal
auditor and a supervisory committee, that helped make the fraud possible.)
However, I think that this won't come to pass, primarily because most of
the people organizing the special meeting have their own lives to live and
want to get back to them as soon as possible. I certainly want to.
Thanks again for your logical and well reasoned note. I only wish that
you could see beyond your dislike of the way discussion goes on in the
notes files, to see that perhaps most of those pushing for the special
meeting have tried the things you propose, and are only trying to remove
the Board as an absolute last resort after everything else failed.
That's how I got here, and I wish there were an alternative.
Yours sincerely,
Larry Seiler
|
| 1639.73 | | GLDOA::REITER | | Mon Nov 11 1991 10:47 | 33 |
| In summation:
You are going to the meeting tomorrow night.
You have a sense of righteous indignation.
You are going to vote out the board.
Your mind is made up; you're mad as hell
and you're not going to take it any more.
Great. You're following a revered American tradition.
You've only once ever read any communication from the board (if that).
You have no idea what their position is, because their open letter was
really just a defense against some really unwarranted accusations, and
defending one's self these days is not allowed. Only attacks receive
any credibility.
You have all the facts you need, notwithstanding the fact that going into
the DCU Notes File looking for facts is like going into a brothel looking
for chastity.
But that's not important. Open minds cause delays, and there's a crisis.
The crisis at DCU was manufactured. There is no "crisis".
The credit union is healthy.
The credit union is profitable.
The credit union is stable.
(I wish that were true of more financial institutions in New England.)
There is no problem, and ousting the board is no solution if there were.
The revered American tradition is called lynching.
I wonder how it must feel. Let me know, will you?
\Gary
|
| 1639.74 | | CVG::THOMPSON | Radical Centralist | Mon Nov 11 1991 11:22 | 10 |
| >You've only once ever read any communication from the board (if that).
>You have no idea what their position is, because their open letter was
Gary, read .72 over again. The author has been in several face to
face meeting with the board. He's had one on one conversations with
the chairman of the board. To accuse him of not trying to find out the
position of the board or of getting all their information from the
DCU notes conference is grossly unfair.
Alfred
|
| 1639.75 | election eve | GLDOA::REITER | | Mon Nov 11 1991 11:53 | 20 |
| Alfred,
There's no need for me to read note .72 over again.
There's no need for you to correct me.
This is _so_ tiresome. And you say "grossly unfair"?
My note was addressed to no one in particular... please read IT again
without assuming (incorrectly) who the audience is.
Alfred, most of us familiar with this childishness realize full well
that the organizers of the coup have had personal meetings with Board
members. So what?
Does it necessarily follow that the rest of us should get our
information about the board's position from reports written in Notes by
the very people who are organizing the board's ouster??? I mean,
these people have already filed paperwork to ascend to positions of
power within DCU...
\Gary
|
| 1639.76 | huh? | CIS1::FULTI | | Mon Nov 11 1991 13:02 | 45 |
| re: <<< Note 1639.75 by GLDOA::REITER >>>
> Alfred, most of us familiar with this childishness realize full well
> that the organizers of the coup have had personal meetings with Board
> members. So what?
Childishness? excuse me...
I hardly think that any of this is childishness, the DCU invests millions
of our dollars in speculative loans in 1985. In 1987 the then and now current
president stated that the DCU only invests in conservative type investments.
I dont want to impune the character of Mr. Steinkrauss (sp) but, to put it
mildly, I do not think that he was telling us the complete truth.
It is then discovered that since 1985 the auditors reports are not made part
of the annual report. It is believed that this was a deliberate attempt
to hide the now bad loans. Members ask for and are denied access to the reports.
Well, I may be wrong on that point the DCU may be in fact allowing access
if you can prove to them that you have a business need to see them and can
come up with enough money. In either case it isnt in the best interests of the
common member to have to meet such requirements.
So what? excuse me again...
I wasnt there but, from all accounts from those that were it seems that
the BoD didnt go to those meetings with the real intent of answering any
real questions.
> Does it necessarily follow that the rest of us should get our
> information about the board's position from reports written in Notes by
> the very people who are organizing the board's ouster??? I mean,
> these people have already filed paperwork to ascend to positions of
> power within DCU...
Well, I havent seen any real effort, except for one IMHO very unprofessional
communication in notes, by the BoD to get their position out to the members.
Where else are we to find it? Do you suggest that all 80,000 members have
one on ones with the board members in lieu of any official communication?
I'm sorry Gary but, it seems to me that you are trying to use scare tactics
yourself. I mean Gary, people being put out into the streets of Mass.
because the board is forced out and new elections held?
- George
|
| 1639.77 | Valid concerns not being addressed | KALI::PLOUFF | Owns that third brand computer | Mon Nov 11 1991 13:08 | 44 |
| Re: Gary Reiter and others
We all know only too well that Notes generate more heat than light. We
all know that it is nearly impossible to keep any kind of restraint in
Notes when discussing controversial matters.
However, if you are willing to slog through all the anger, opinion,
supposition and speculation, there are still plenty of undisputed facts
giving rise to valid concerns. I am talking here of quotes from the
full version of DCU annual reports, papers filed in court in the
lawsuit against Richard Mangone, and communication from the DCU board,
such as in the October issue of the DCU newsletter, _Network_.
These documents lead me to conclude that there is the APPEARANCE that
-- DCU gave the Cape Cod development loans, the riskiest in its
portfolio, less scrutiny than any real estate loan an ordinary member
could obtain.
-- Internal controls were lax.
-- DCU was uninterested in communicating significant financial
information to member-shareholders.
All this has nothing to do with the Mangone fraud except that the fraud
brought other information to light.
Instead of any reasonable communication which would show these
appearances to be false, all that's replied is that shareholders with
legitimate concerns are engaged in a "witchhunt," or a "coup." How,
then, is one to judge the reality behind the appearance?
I will gladly and willingly be shown dead wrong. Perhaps Tuesday's
meeting will accomplish this, since nothing else has. But it's
ludicrous to claim that a change in directors will undermine DCU's
financial stability any more than the loss of $9.1 million (DCU's own
estimate) already has. It is equally ludicrous to assume that seven
qualified board members cannot be found from among the many Digital
employees with significant financial and management experience.
Don't forget that recall of any directors will lead directly to new
elections, in which even Mr. Reiter may participate.
Wes Plouff
|
| 1639.78 | | 16BITS::DELBALSO | I (spade) my (dog face) | Mon Nov 11 1991 14:19 | 22 |
| re: .73, Gary Reiter
> The crisis at DCU was manufactured. There is no "crisis".
> .....
> There is no problem, and ousting the board is no solution if there were.
Vs. the Statement from the BoD
> The board will not allow members with limited or no
^^^^^^^^^^^^^^
> finance or management experience to control
> Massachusetts' largest credit union.
Apparently your "perception" of a crisis and mine differ, Gary. As Larry
said earlier, I would like the Board populated by people who believe the
credit union is owned by its members, rather than by people who prefer to
demonstrate the type of arrogance evidenced above.
The crisis is quite real, but it has little to do with the immediate financial
well being of the credit union.
-Jack
|
| 1639.79 | | SQM::MACDONALD | | Mon Nov 11 1991 15:28 | 22 |
|
Re: .73
> ... But that's not important. Open minds cause delays,
> and there's a crisis.
Gary,
For one so concerned with how well those who will be attending
and voting on November 12 are doing so with an "open" mind, in the
tone and text of .73 you are not keeping much of an open mind yourself.
You claim the entire affair is "childish." You claim it is a
lynch mob action. You claim not to have the time for all this yet
you take the time to taunt and chide.
Just what is *your* agenda in all this? I'd really like to know.
Steve
|
| 1639.80 | Agenda? Well, for starters: | GLDOA::REITER | | Mon Nov 11 1991 15:38 | 11 |
| Virtually no one has both sides of the story, but it doesn't seem to
be bothering anyone. They already have their minds made up!
If I can at least raise that issue, I've accomplished something.
That's all... I'd feel the same way about it if it were this "issue" or
any other. Is that really such a novel thought?
All of this rationalization... all these replies... WHOM are you trying
so hard to convince? Me? (Yourselves?)
\Gary
|
| 1639.81 | I guess I've lost my sense of humor | GLDOA::REITER | | Mon Nov 11 1991 15:42 | 11 |
| Help me to understand...
Let us hear from someone who really believes that people with limited
or no finance or management experience should control ANY financial
institution larger than a Boy Scout troop.
This I have to hear for myself...
This is a put-on, no?
Is this _really_ happening?
\Gary
|
| 1639.82 | | ACOSTA::MIANO | John - NY Retail Banking Resource Cntr | Mon Nov 11 1991 15:57 | 7 |
| RE: <<< Note 1639.81 by GLDOA::REITER >>>
and .80, etc.
It sounds like your talking to yourself now.
John
Apparently one of the rationalizers
|
| 1639.83 | | 16BITS::DELBALSO | I (spade) my (dog face) | Mon Nov 11 1991 15:59 | 15 |
| re: .81, Gary Reiter
> Help me to understand...
> Let us hear from someone who really believes that people with limited
> or no finance or management experience should control ANY financial
> institution larger than a Boy Scout troop.
You're missing the entire point, Gary. It's not whether the contention (that
experience is required) is valid or not. It's the arrogance with which the
Board is acting when they state that they "will not allow". They fail to
recognize that they serve at the pleasure of the owners, and, if voted out,
it is not their decision to make. Again, I want a board who recognizes that
I am an owner - that is my right as a member of the credit union.
-Jack
|
| 1639.84 | BEIRUT::DCU problems - real or convenient? | IRONIC::PETER | Tricky Woo's gone Flopbot again? | Mon Nov 11 1991 16:04 | 6 |
| I was just wondering. . .
Is it me or has anyone else noticed that the DCU notes conference is
experiencing technical difficulties since the start of last week?
Peter
|
| 1639.85 | | SQM::MACDONALD | | Mon Nov 11 1991 16:07 | 7 |
|
Nothing is wrong. It is just that the number of people trying
to read BEIRUT::DCU regularly exceeds the number of network links
alloted.
Steve
|
| 1639.86 | | NOTIME::SACKS | Gerald Sacks ZKO2-3/N30 DTN:381-2085 | Mon Nov 11 1991 16:08 | 4 |
| BEIRUT is Nisreen Sunnaa's workstation. I gather that she volunteered to
host the DCU notesfile when it was relatively inactive. My batch extraction
job got something like 340 blocks of notes that were entered from Thursday
night till Sunday night. The machine is simply overloaded.
|
| 1639.87 | | SQM::MACDONALD | | Mon Nov 11 1991 16:09 | 9 |
|
Re: .80
I think that you are missing my point. From the way you are
presenting yourself, you notes are coming across to me at least,
as not worth taking seriously.
Steve
|
| 1639.88 | I Know You Are, But What Am I? | GLDOA::REITER | | Mon Nov 11 1991 16:14 | 10 |
| re: .82 ACOSTA::MIANO
>> It sounds like your talking to yourself now.
Is that ALL you have to say, or are you Pee Wee Herman's stand-in?
Some of the replies are at an adult level... I have restrained myself
from this type of comment on the others. You deserve this for taking
this discussion to that level. There is no room for replies like that.
\Gary
|
| 1639.89 | Less hype, a few facts... | EDWIN::WAYLAY::GORDON | Wanna dance the Grizzly Bear... | Mon Nov 11 1991 17:29 | 25 |
| Fact: DCU owned $18M in non-performing loans due to the Mangone
fraud. So far, only $6M is absolutely recoverable. (Bond
on Mangone.) The other associate lawsuits and sale of the
properties may bring the total loss down, but there are
large costs involved as well.
Fact: The appropriate agencies have investigated and determined that
the BOD did nothing illegal. (per the BOD 'rebuttal' memo.)
Fact: Despite doing nothing illegal, the BOD was responsible for
approving participation loans that cost the DCU at least $12M.
Personal Conclusion:
The BOD did not take reasonable care to protect my investments.
They made a mistake, to the tune of $12M. That alone is
enough to encourage me to vote to remove the board. Everything
that has happened since merely reinforced my original
feelings. It doesn't have to be illegal to be irresponsible.
I would hardly consider this a lynch-mob attitude. I expect the BOD to
answer for their mistakes, just as I do anyone else. I know which way I'm
voting. Please attend and vote whichever way you think is correct.
--Doug
|
| 1639.90 | Now wait a minute, I don't think we are that dumb | STAR::PARKE | True Engineers Combat Obfuscation | Mon Nov 11 1991 23:09 | 87 |
| re: .81
Now I have a problem with this statement:
> Let us hear from someone who really believes that people with limited
> or no finance or management experience should control ANY financial
> institution larger than a Boy Scout troop.
You accuse us of wanting people with limited financial knowledge
running our credit union ? A fine thought from one so level headed as
yourself.
BULL PUCKY !!!!!!!!
I would hope you could give the members of DCU more credit than
being a bunch of idiots. NOWHERE in all of the discussions that you so
readily discount has it been suggested that anyone involved wants
incapable or inept people running the DCU.
I also have no doubts as to the capability and qualifications of
the current members of the BOD. Where they failed in my view is in the
inept disqualification above.
Also, if you read the boards note, and the other opinions of some of
the members of the BOD, there are direct, public, statements to the
effect that they are qualified to determine who is qualified and this,
IN MY OPINION, provides lousy checks and balances on the process.
As an example, if you were to own part of a corporation (a stockholder
of something) and you did not like the actions of the board as to
delivering profits to the stockholders, WOULD YOU VOTE TO KEEP THEM IF
YOU HAD A CHANCE TO VOTE ALL OF THEM OUT ?
Would GM, Philip Morris, Johnson and Johnson or the Bank of England go
out of business, and trash jobs just because they had no BOD ? I think
not.
Also, note
These corporation must have changes to their charters (bylaws)
voted on by their owners. With DCU only the BOD can change bylaws
and the members cannot do anything other than say thanks or embark
on a "lynching" (your term). Oh, I know they need to get approval
from NCUA (An association of credit unions).
How many corporations have the Board appoint its own oversight
committee ? DCU Does. (I have also heard, but don't know for a
fact, that this WAS NOT TRUE until the bylaws were changed).
In fact through these trying times (1985 on) the Supervisory
committees has not met (so far as I know) and some listed members
did not even know they were part of it.
In any of these corporations, where would anyone be who did not
exercise general fiduciary responsibility. I would hope they
would be fired, I would not want to own stock in a corporation
where this was not true.
In the recent past, members went through a lot to get
approved for a loan (possibly too much according to
Chuck Cockburn). Yet, on the say so of one person
we gave $18,000,000 to loans written by another institution
which were approved by the current BOD.
Granted, all the paperwork looked good, and real estate had
NOWHERE TO GO BUT UP at that time (view towards the future
in 1985). At the same time DCU was experimenting with home
mortgages of members (EMPLOYEES of the sponsoring
corporation), because getting into real estate based loans
was RISKY and locked you into long term commitments of your
money.
Bill
(Who is going to the meeting to listen, and vote, but still annoyed
with the arrogance, and lack of candidness from the current BOD)
(Who will also PROBABLY vote to toss the directors but will listen)
(Who will probably NOT vote to permanently cancel fees, as that might
tie the hands of the DCU sometime, when they make sense after
reasonable analysis as a "charge for service" option", with reasonable
announcement intervals, and not as a "benefit").
|
| 1639.91 | A profound statement about who should be on A board of Directors | STAR::PARKE | True Engineers Combat Obfuscation | Mon Nov 11 1991 23:17 | 26 |
|
This has to be one of the most comprehensive statements that I have
seen over this issue, NOTE where it comes from (which note train).
<<<HUMANE::HUMANE$DUA1:[NOTES$LIBRARY]DIGITAL.NOTE;1 >>>
-< The DEC way of working >-
================================================================================
Note 1665.13 Shareholders Annual Meeting 13 of 13
IOSG::MEREWOOD "Richard, REO/D4-5A, DTN 830-3352" 14 lines 11-NOV-1991 04:44
-< Directors are shareholder's representatives, NOT managers. >-
--------------------------------------------------------------------------------
It is my understanding that the function of a board of directors is that they
are elected representatives of the company's shareholders. Personally I would
look for qualifications, experience, and track record which indicate that my
investment is going to be well looked after and perhaps even appreciate. This is
the duty of the BOD. If they make money for me, I will be more inclined to vote
for them. (Not that Digital directors need fear for their positions on my
my account!)
So - technical management qualifications are not really required. However, it's
the responsibility of the board to appoint competent managers to run the
company, and that's where we should look for 1st. class technical management
qualifications (in my opinion).
Richard.
|
| 1639.92 | Plenty of facts if you read them | GUFFAW::GRANSEWICZ | Someday, DCU will be a credit union. | Tue Nov 12 1991 04:34 | 57 |
|
There are so many outright incorrect statements and derogatory remarks
in Mr. Reiters many replies that they could not all possibly be
responded to, nor should they be. They fail on their own lack of
supporting evidence and mildly emotional tone.
I stand ready, willing and able to send copies of any and all documents
I have relating to DCU. These documents are the source of all
supporting data that has been posted in here and in BEIRUT::DCU.
Unfortunately, I can not send you copies of the auditors notes for
DCU's financial statements for the last 5-6 years. However, I can send
you my word-for-word transcription of the participation loan related
notes from 1985-1990. I would prefer to be able to send you the
actual, complete auditors notes, but my request for copies of the auditors
notes made on August 30th, 1991 has gone unanswered by the DCU BoD. To
the best of my knowledge, I am the only DCU member that has seen these
auditors notes. Why? Because I took an afternoon of vacation time to
go to DCU HQ and read and take notes from them. Is this a valid option
for DCU members in Colorado? Atlanta? Of course it isn't.
I urge all DCU members to do the following exercise. Go to your
nearest DCU branch and ask for a copy of the 1990 annual report. First
read all of the text statements made by DCU's Directors. Then read the
Statement of Income and tell me if anything seems out of line. In
1990, DCU's net income FELL about 90%, they had repossessed over $6
million of property that secured some of the participation loans (see
"other Real estate owned" on the Balance Sheet), and had written off
$2.6 million on some of the participation loans in 1990. The last
item would have been very easy to see had the auditors notes been
included because the auditors thought it significant enough to seperate
these losses from member losses. Now go back and re-read those text
statements and see if any in particular standout as being less than
truthful.
DCU's BoD knew as early as July 1990 (first default) that there were
real problems with the loans that Mr. Mangone had brought to DCU. By
the end of the year, they had repossessed ONE THIRD of them. Now if
this wasn't enough, Mr. Mangone's funds at DCU were attached in Oct.
1990 as a result of being named in a lawsuit in Barnstable Superior
Court. Yet, the DCU BoD says they weren't aware of Mangone's fraud
until March 1991. They removed him April 5, 1991. I look at all the
danger flags waving in the air and have to ask, "Where was the DCU
BoD?". What actions did they take to investigate these matters or to
protect our money?
Oh well, just one of the many issues to be discussed tonight. And I do
take offense to this meeting being called a lynching by a mob. The
Bylaws give the membership the right to call this meeting and also the
rights to remove directors. It has all been done by the book. We hope
the meeting will be conducted by the book also. But that is up to the
meeting chair, Mr. Steinkrauss.
As for the downfall of western civilization should the Board be
removed, rest assured, DCU's members are well aware that DCU is
financially strong and not in danger of going under. Many members are
very concerned that recent and past actions of the DCU BoD represent
more danger to DCU's future than does their removal.
|
| 1639.93 | | ICS::CROUCH | I tripped and I can't come down | Tue Nov 12 1991 09:12 | 7 |
| If I had a vote I'd vote the BoD out. However, since I've never had
a thing to do with this credit union I can't. I don't know exactly
why but I never felt good about the DCU. I've been with DEC for 13
years.
Jim C.
|
| 1639.94 | | SMOOT::ROTH | The 13th Floor Elevators | Tue Nov 12 1991 10:48 | 4 |
| Most of the DCU members will not be able to vote since physical
attendance at the meeting is required.
Lee
|
| 1639.95 | Life Imitates Art | GLDOA::REITER | | Tue Nov 12 1991 10:52 | 24 |
| "... During the next three months there was much secret activity. Major's
speech had given to the more intelligent animals on the farm a completely
new outlook on life. They did not know when the Rebellion predicted by
Major would take place, they had no reason for thinking it would be within
their own lifetime, but they saw clearly that it was their duty to prepare
for it. The work of teaching and organising the others fell naturally upon
the pigs, who were generally recognised as being the cleverest of the
animals. Pre-eminent among the pigs were two young board named Snowball and
Napoleon, whom Mr. Jones was breeding for sale. Napoleon was the large,
rather fierce-looking Berkshire boar, the only Berkshire on the farm, not
much of a talker, but with a reputation for getting his own way. Snowball
was a more vivacious pig than Napoleon, quicker in speech and more
inventive, but was not considered to have the same depth of character. All
the other male pigs were porkers. The best known among them was a small fat
pig named Squealer, with very round cheeks, twinkling eyes, nimble
movements, and a shrill voice. He was a brilliant talker, and when he was
arguing some difficult point he had a way of skipping from side to side and
whisking his tail which was somehow very persuasive. The others said of
Squealer that he could turn black into white."
"Animal Farm, A Fairy Story", George Orwell, 1946
Other suggested reading for Group Dynamics 101: "Lord Of The Flies".
\Gary
|
| 1639.96 | a challenge | SMOOT::ROTH | The 13th Floor Elevators | Tue Nov 12 1991 11:22 | 11 |
| re: .95
Your posting of Orwell is pointless.
The facts, as stated in this notesfile and the DCU notesfile remain. What
author can you quote that will convince us that what has occured/is
occuring are normal, responsible actions by a credit union board of
directors?
Lee Roth
DCU Member
|
| 1639.97 | | JUPITR::BUSWELL | We're all temporary | Tue Nov 12 1991 11:39 | 8 |
| why don't we have a note on the bank of Boston?
what has dcu have to do with the way we work at dec.
just wondering?
buzz
|
| 1639.98 | Let's talk about data rather than emotion | PLOUGH::KINZELMAN | Paul Kinzelman | Tue Nov 12 1991 11:43 | 16 |
| Re: .95
Namecalling and allegories are non-productive. I think you would be far
more effective if you would choose some facts (of which there are many
both in this and the DCU file) and rebut them.
For instance, take the fact that DCU's income in 1990 dropped 90% while
the treasurer assured us that "DCU's financial performance improved."
Explain to us how these two statements are not contradictory.
All of our questions are similar to that example. We've been asking the
board for a long time but get no answer. I was at the meeting where the
treasurer was asked about this and she said "I stand by what I wrote."
Give me reasonable answers to these apparent contradictions and I'll
vote tonight to retain the board.
|
| 1639.99 | Stick to the FACTS | NECSC::DWORSACK | | Tue Nov 12 1991 11:48 | 14 |
| Gary re: 95
Your starting to sound like another well known noter in this
conference, who dances around the issues and facts. This only drags
the note into the 8 hole.
Do you understand, most people that feel strongly about the issue still
have their moneys in there and dont feel the DCU is in trouble, EXCEPT
for the BOD and it's past and current chemistry for future problems.
WE WANT LOWER INTEREST RATES FOR LOANS, AND HIGHER INTEREST ON OUR
SAVINGS. And current BOD made sure that wont happen for a while.
It can be turned around.......
Jim
|
| 1639.100 | | MIZZOU::SHERMAN | ECADSR::Sherman DTN 223-3326 | Tue Nov 12 1991 12:24 | 7 |
| It seems odd to me, Gary, that in your replies thus far you've only
slightly touched on issues, if at all. If your purpose is to persuade
and to be credible, you might consider focusing on issues. If your
purpose is to alienate, intimidate or anger you've probably succeeded,
though I fail to understand what satisfaction you might gain from this.
Steve
|
| 1639.101 | | TOMK::KRUPINSKI | DCU Special Meeting: 12-Nov-1991 | Tue Nov 12 1991 12:58 | 24 |
| > what has dcu have to do with the way we work at dec.
DEC supports the DCU by allowing the DCU to conduct business
in DEC facilities, and, perhaps, in other ways. I consider
the DCU among the benefits in my compensation package.
When people complained about the way DCU was being run,
we were told, essentially, that if we didn't like it,
we could take our business elsewhere. I equate this
with trying to decrease my pay. Anyone who sticks their
hand in my pocket can expect to see it cut off.
> Let us hear from someone who really believes that people with limited
> or no finance or management experience should control ANY financial
> institution larger than a Boy Scout troop.
No one believes that, Gary. No one is suggesting that the replacement
Board (if indeed the Board is replaced) should be made up of
people with "limited or no finance or management experience".
Tom_K
|
| 1639.102 | | SQM::MACDONALD | | Tue Nov 12 1991 13:04 | 8 |
|
Re: .95
Get a life.
Steve
|
| 1639.103 | I can if you can | RMDSRV::EIDSON | luv ya Colorado | Tue Nov 12 1991 13:47 | 9 |
| Re: .95
It appears to me that Gary has, to coin a phrase,
"Has his mind made up."
Gee. where have I heard that before?
-Harold-
|
| 1639.104 | | CROW::KILGORE | DCU Meeting, see BEIRUT::DCU | Tue Nov 12 1991 15:01 | 4 |
|
Perhaps Gary could also quote us a few relevant lines from "1984", which
seems more appropriate to the doublespeak that was perpetrated in the
1990 Annual Report.
|
| 1639.105 | Keep it simple. | GLDOA::REITER | | Tue Nov 12 1991 15:28 | 31 |
| re: .98 Paul Kinzelman
>>> Give me reasonable answers to these apparent contradictions and
>>> I'll vote tonight to retain the board.
What a generous offer! What else could one ask for?
But wait, who decides what "reasonable" is...? ah, ...I thought so.
In that case, you're on pretty safe ground, aren't you!?
Are there any tactics you all _haven't_ used yet? ;7)
re: general
You say you have enough FACTS to support a decision to oust the board.
I can't argue with that because it's your OPINION. (That is, that it
is your OPINION that you have enough FACTS to support a decision to
oust the board. Pretty simple.)
I say there aren't enough FACTS, that they are virtually all reported
by the LOYAL OPPOSITION, and that an ouster would not only be an
overreaction, it is also fraught with unnecessary risk. Pretty simple.
My point in quoting Orwell, and one message of Animal Farm, is that
after the rebels overthrow the party in power, guess who's in power?
Pretty simple.
Further, there is no reason to assume, as the author of .99 so
fervently wishes, that the "new board" would have any more power to
safely ignore market forces to lower loan rates and raise payouts.
Every day can't every day be Xmas, either. Yep. Pretty simple.
\Gary
|
| 1639.106 | Please, issues, issues, issues, facts, facts, facts | GUFFAW::GRANSEWICZ | Someday, DCU will be a credit union. | Tue Nov 12 1991 15:31 | 161 |
|
The pattern of behavior exhibited by some writers in this note (namely
.70 & .95) have been remarkably similar to the behavior of the DCU BoD
when asked to address the facts and issues. They use scare tactics,
use derogatory names (or analogies) to reference concerned DCU
members raising very valid issues, toss in a few red herring "issues"
and walla, a meaningless reply that addresses no issues is the product.
When we ask again, we are "harassing" them. Excuse us for being
concerned about the place that we trust with our money. Seems all too
many people in this country didn't care and you can see the results on
the nightly news or daily newspaper almost every day. We have a major
advantage though. We have a credit union in which we can participate
(if we don't buy the "shop around" line) and change for the better.
Again, excuse us for caring enough to participate in the credit union
as the Bylaws allow. But the alternative of not caring and not
participating are not valid options, at least for me. Digital considers
DCU an employee benefit. I do too. And I am willing to make that
benefit a better benefit for ALL DEC employees. Nobody is trying to
tear DCU down. We are trying to tear down the Bank of Digital and
return DCU to its credit union origins, and all the benefits that that
means to the membership.
The author of .70 has posted a psychological profile of people in this
file. This is the second such posting I have seen him post. I suggest
.70 examine his own psychological profile before summarily insulting
thousands of Digital employees with his medical diagnosis. He also
said nobody in the DCU conference ever offers suggestions or
alternatives. I re-post some of my notes to refute that statement.
There are many others in the conference that .70 apparantly hasn't read.
I would ask .70 that if he is seriously considering a BoD candidacy,
that he refrain from emotional statements and blanket catagorizations
of people. They are very unproductive and add nothing to the
discussion at hand.
<<< BEIRUT::R7XBOK$DIA0:[NOTES$LIBRARY]DCU.NOTE;4 >>>
-< DCU >-
================================================================================
Note 270.0 Changes you'd like to see made at DCU 18 replies
GUFFAW::GRANSEWICZ "I'M DCU and you're not." 98 lines 22-AUG-1991 18:02
--------------------------------------------------------------------------------
Changes that I would like to see made at DCU:
1. Limit term of directors to 2 consecutive terms.
This would allow the regular infusion of young blood and new ideas.
It would also open up the elections considerably and would provide
greater opportunities for those members wishing to serve.
2. All changes to DCU Bylaws are approved by DCU membership.
As with corporations, the annual ballot for BoD would contain the
changes to be voted on. This would keep DCU members aware of what
is happening to the Bylaws that dictate how their credit union is
organized and run. A provision could be made for emergency changes
to be made by the 2/3 vote of the BoD, but such changes must be
approved at the next scheduled election. All changes must receive
NCUA approval.
3. DCU membership may inititate Bylaw changes
As with petition candidates, any DCU member may propose bylaw
changes and proposals to the DCU membership. To get a change or
proposal on the ballot, 200 member signatures would be required.
Proposals would be non-binding but would provide a way of the
membership giving definitive feedback on specific proposals.
All Bylaw changes must receive NCUA approval.
4. Full disclosure in the DCU annual report of relationships which
directors or senior management have with other companies, banks, etc.
This is standard with public corporations. People cannot serve two
masters. All these relationships should be above board.
5. Full disclosure in the DCU annual report of loans to directors and DCU
employees over a set amount. Also, any loans which these people may
be guarantors or co-signors. Mortgages on primary residences would
be excluded.
To ensure DCU is serving it's members and not it's directors and
employees. There is no intent of prying into peoples personal
finances. Private corporations list stock holdings in the
corporation of it's senior management.
6. Distribution of a full annual report, including the statement by the
independent auditors and their notes.
Standard inclusion in the annual report should include a detail
breakdown of the loan portfolio, as was done in the early DCU years.
Delinquency rates by category is also valuable information. How
our money is being loaned is an important part of a credit union.
7. The rollback of the exclusion of members from the Credit Committee.
DCU BoD made the 3 positions on the Credit Comm. DCU employee
positions. The bylaws were changed to reflect this in 1990. This
was all done within their powers, however, the surrender of the
rights of members should be given by those members. If the
membership approves on the annual ballot, then so be it. Current
Credit Comm. can be up to 7 people. Currently it is 3 full-time
DCU employees. Increasing the number to 5 and adding 2 member
slots that are voted on via balloting may be an option. But these
decisions should be membership decisions.
8. The use of the "(incumbent)" designation on the annual ballot should
be dropped.
I believe this designation on the ballot is biased against the
non-incumbents. If members wish to know who the incumbents are
then that information can be obtained in the write-up for each
candidate.
9. Write ups for BoD candidates should be expanded to provide each
sufficient opportunity to provide qualifications as well as philosophy
and objectives.
I believe the current write ups are limited to 100 words or less.
This seems very small. While an entire page may be excessive.
10. The elimination of the following qualification for being on the
Nominating Committee: '- have a "reasonable amount" of Digital
seniority"
This qualification is vague and exclusionary. All of the other
qualifications are sufficient.
11. Require a MINIMUM of 60 days notice for any increase in fees or
minimums.
No explanation required. But this notice period should match
how long DCU can hold our money and require written notice for
withdrawal.
Those are all I can think of right now. I'm sure people out there have
some of their own.
================================================================================
Note 270.4 Changes you'd like to see made at DCU 4 of 18
GUFFAW::GRANSEWICZ "I'M DCU and you're not." 15 lines 26-AUG-1991 10:55
-< More conservatism I guess >-
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Another wanna see:
12. Decrease the number of signatures required of a petition candidate
for the BoD to 200.
After browsing thru the Federal Credit Union Standard Bylaw Amendments
and Guidelines, I have discovered that DCU has established the MAXIMUM
number of signatures required for a partition candidate to get on the
ballot for the BoD. The number can be as low as 20! For credit unions
with over 50,000 members, 500 is the maximum. Let's open the process
up! I can see where MANY candidates would not want the "approved by
the Nominating Comm." distinction in future elections.
|
| 1639.107 | Please explain the facts | PLOUGH::KINZELMAN | Paul Kinzelman | Tue Nov 12 1991 15:37 | 19 |
| Re: .105
OK, give me *any* explanation... like any explanation that to you would
reconcile those two statements. You haven't even proffered *any*
explanations yet for the wealth of DCU statements that need further
explaining. Please address yourself to the facts.
>> after the rebels overthrow the party in power, guess who's in power?
That's the whole point that you and Tony P misunderstand. Those of us
most active in the recall movement *don't* want to take over DCU. We
have no slate of candidates waiting in the wings. We *know* that there
are enough qualified people in the wings, many who have run before and
have lost, to replace the board.
Furthermore, one of the first orders of business of the new board (I
hope) is to make most of the DCU financial information and minutes
publically available to the members. Could you please explain the harm
in that (if you see any)?
|
| 1639.108 | Elections are not takeovers | GUFFAW::GRANSEWICZ | Someday, DCU will be a credit union. | Tue Nov 12 1991 15:44 | 21 |
|
RE: .105
Why do you completely ignore agenda item 3 that calls for new, open
elections in which ALL DCU members can elect whomever they want to the
Board? There is no "takeover" of DCU by anybody, as the BoD suggests
and you do as well. All the special meeting boils down to is a vote of
confidence (or lack of one) concerning the BoD.
This type of vote is taken pretty regularly in the U.K. and I haven't
noticed the U.K. disappearing. DCU will remain open and strong if the
Boards is removed because the MEMBERS wish it so. They will remain
loyal to DCU and hope things get better. The BoD has little or nothing
to do with DCU's stability, unless of course they continue to "invest"
our money in Cape Cod real estate. And it is my understanding that the
NCUA has prohibited them from making any more of these "investments".
So bottom line is calm down a bit, the sky is NOT falling. Tommorow
morning DCU will still be there not matter what. And either way, I
hope to make it a better credit union for all of its members.
|
| 1639.109 | | BEIRUT::SUNNAA | | Tue Nov 12 1991 16:37 | 13 |
|
re: .86 and access to the DCU conference.
My machine is a VAX 4000-200 with plenty of memory and disk space. The
limitation is network links. Out of 32 Maximum network links, I have
allocated 24 for Notes$server (2 servers 12 liks each) and the rest
(8) for work. So basically there aren't enough network links
to go around. All 24 links are continuously being used.
Nisreen
|
| 1639.110 | some VPs can use Email - that at least is good news | CVG::THOMPSON | Radical Centralist | Tue Nov 12 1991 16:44 | 10 |
| The latest word in my mailbox is an Email message from Don Zereski
urging support for the DCU board. Given that there were a lot of other
VP names on the original distribution list I expect to get other
copies. Many of you probably will as well. It includes a message from
Mark Steinkrauss. This message doesn't address any of my questions
(it's all posted elsewhere in this topic BTW).
Anybody heard from a VP who wants to toss out the BoD? Just wondering.
Alfred
|
| 1639.111 | | SQM::MACDONALD | | Tue Nov 12 1991 16:55 | 9 |
|
Re: .110
Sounds like many of those VPs may just be forwarding the mail
with a perfunctory comment about supporting the BoD. It doesn't
necessarily mean that they are personally committed to it.
Steve
|
| 1639.112 | not much worth responding to, so: | GLDOA::REITER | | Tue Nov 12 1991 17:13 | 20 |
| re: 1639.106 GUFFAW::GRANSEWICZ
Well, folks, there you have it. A kingmaker in the new credit union
who thinks it's worth his time to generate 161-line notes file entries
defending The Movement.
>>> toss in a few red herring "issues" and walla, a meaningless reply
>>> that addresses no issues is the product.
Toss in another "walla" and you have a very nice city in the state of
Washington. Is this "walla" like "voila"? It's good to know we'll
have a multicultural board! :7)
Was this really a p-name used by you in the DCU conference?
And you have the nerve to talk about arrogance?
Note 270.0 Changes you'd like to see made at DCU 18 replies
GUFFAW::GRANSEWICZ "I'M DCU and you're not." 98 lines 22-AUG-1991 18:02
\Gary
|
| 1639.113 | | GLDOA::REITER | | Tue Nov 12 1991 17:20 | 21 |
| re: .107 Paul Kinzelman
>>> OK, give me *any* explanation... like any explanation that to you
would reconcile those two statements. You haven't even proffered
*any* explanations yet for the wealth of DCU statements that need
further explaining. Please address yourself to the facts. <<<
Excuse me, Paul, but you have mistaken me for someone who claims to
have the answers... my job is not to offer explanations to you.
I am 800 miles away, you are closer to 8. Get your own explanations.
Point is: Even if I could give you explanations, though, I'm not sure
that's what some people are really looking for or would accept. They
have already decided how to vote without hearing from the other side.
>>> Those of us most active in the recall movement *don't* want to take
>>> over DCU.
File this away in memory, folks, it may come in handy one day soon.
\Gary
|
| 1639.114 | And now, the REST of the story... | GLDOA::REITER | | Tue Nov 12 1991 17:27 | 14 |
| re: .108 GRANSEWICZ
>>> I hope to make it a better credit union for all of its members.
Sounds pretty clear to me.
- No candidates "waiting in the wings".
- Plans for change could be executed WITHOUT ousting the board.
Hmmm....
How is it that you failed to mention the papers you have filed?
The papers for the nominating committee... you know, the papers.
\Gary
|
| 1639.115 | | SSDEVO::EGGERS | Anybody can fly with an engine. | Tue Nov 12 1991 17:35 | 7 |
| Re: .112
Well, folks, there you have it. A defense of the DCU BoD based on name
calling, spelling, a knowledge of the geography of the State of
Washington, and a misinterpretation of a personal name. Fortunately, he
is on the BoD's side, but I don't think even the BoD needs or wants
that kind of support. :-)
|
| 1639.116 | | CSC32::J_OPPELT | Illiterate? Write for free help. | Tue Nov 12 1991 17:38 | 24 |
| 1639.117 | We've been trying... really! | PLOUGH::KINZELMAN | Paul Kinzelman | Tue Nov 12 1991 17:46 | 23 |
| Re: .113
>> Get your own explanations.
Please re-read what many people, more eloquent than myself have entered
here and in the DCU notes file. We have been desperately seeking
explanations from somebody...anybody, the board, you, etc. and nobody
will give us reasonable explainations. All we get is "trust us" and
"vote for us because we're nice guys." Sorry, that doesn't earn my
trust.
I have currently decided to vote out the board because of the lack of
explanation for the apparent contradictory statements. But that does
not alter the fact that if somebody *does* come up with a reasonable
explanation, I *will* vote to retain the board. I don't see that
happening (we've been waiting for about 3 months for explanations), but
I'm always open to that.
I'm also really disappointed and ashamed that the leadership of our
company (in the form of VPs) has stooped to recommendations along the
lines of "vote for them because they are nice people". Apparently, they
have not taken the time to acquaint themselves with the facts. Or if
they have, they have not seen fit to explain them to us.
|
| 1639.118 | | CADSE::ARMSTRONG | | Tue Nov 12 1991 17:47 | 18 |
| re:
<<< Note 1639.114 by GLDOA::REITER >>> -< And now, the REST of the story... >-
> How is it that you failed to mention the papers you have filed?
> The papers for the nominating committee...
I guess when no one can get into the DCU conference, the discussion
will continue elsewhere.
Phil actually put his 'request to volunteer' for the
nominating committee AND another committee (supervisory?)
into the DCU notes file. He also added the BOD's terse reply.
Gary, you're kinda reaching with your current track. How about
getting the BOD to start answering some of the questions so
you and we all can hear the other side. I'm sure there are answers,
and we haven't heard them yet.
bob
|
| 1639.119 | | SQM::MACDONALD | | Tue Nov 12 1991 17:52 | 12 |
|
Re: the notes from GLDOA::REITER
Why are you all taking this person so seriously?
Either he is out in left field somewhere or just jerking your
legs a bit.
I'd ignore him.
Steve
|
| 1639.120 | | GLDOA::REITER | | Tue Nov 12 1991 18:51 | 20 |
| re: .118 CADSE::ARMSTRONG
>>> Phil actually put his 'request to volunteer' for the
>>> nominating committee AND another committee (supervisory?)
>>> into the DCU notes file. He also added the BOD's terse reply.
I _know_. That's where I saw it!
You want to know what this is all about --- it's about things like
"Board's terse reply"? They said YES!!! What were they supposed to
say, Congratulations? After being HARASSED by Phil every waking hour
for weeks on end in Notes, phone, mail, the press, wherever. Can't
anyone just report something without slanting it and adding innuendo.
If this is what we can look forward to.
\Gary
\Gary
|
| 1639.121 | | SSDEVO::EGGERS | Anybody can fly with an engine. | Tue Nov 12 1991 19:05 | 6 |
| Re: .120
>> Can't anyone just report something without slanting it and adding
innuendo.
Like "lynch mob" in .47?
|
| 1639.122 | Mark Steinkrauss's picture in _digital_today_ | TOOK::DMCLURE | Did Da Vinci move into management? | Tue Nov 12 1991 19:21 | 4 |
| I noticed a picture of Mark Steinkrauss on the back page of
this week's _digital_today_ (November 11, 1991 issue - apparently
he's the guy on the far right).
-davo
|
| 1639.123 | The special meeting is over ... | MIZZOU::SHERMAN | ECADSR::Sherman DTN 223-3326 | Wed Nov 13 1991 01:03 | 11 |
| I just came from the meeting. The first item passed. The second item
failed. The Board stays on. Over 1400 were reported to be in
attendance at the start of the meeting. The final vote on the second
item was:
YES - 540
NO - 651
1191 votes were cast.
Steve
|
| 1639.124 | | MIZZOU::SHERMAN | ECADSR::Sherman DTN 223-3326 | Wed Nov 13 1991 01:46 | 5 |
| I goofed. I left the meeting when it looked to me like it would
adjourn. It didn't. The third item PASSED. I don't know more than
that. This was the item calling for new elections.
Steve
|
| 1639.125 | | BEATLE::REILLY | So I rewired it... | Wed Nov 13 1991 01:50 | 11 |
|
Q3 (the item to call new elections to fill the entire board) passed,
overwhelmingly, despite Mark's efforts to adjourn without that vote.
I don't know why this passed and 2 failed. Some have speculated that
people were worried about the doom of removing the board right now,
but wanted new elections. Mark made it clear that he felt Q3 was
moot after Q2 failed and I doubt they will have an "open" election,
anyway.
- Sean
|
| 1639.126 | Intense meeting! New elections in 90 days! | TOOK::DMCLURE | Did Da Vinci move into management? | Wed Nov 13 1991 03:20 | 67 |
| Having also just returned from the [entire] meeting, I would
like to add a couple of observations (which most likely won't
appear in the meeting minutes).
First of all, the meeting was chaired by Mark Steinkrauss
and despite several motions to find a more impartial meeting
chairman, on each such occasion, Mark Steinkrauss would assert
his authority as the chairman, only to be corrected by motions
to replace him as chair, and eventually, after a good deal of
heated debate, points of order, points of information, Mark's
whispered conversations with the DCU lawyer at his side, followed
by general confusion and audience impatience to get on with the
meeting, the motions were eventually withdrawn.
The meeting began with several points of inquiry made by a
man in the front row named Hutchinson as to whether or not, as
well as how we might go about establishing a secret ballot for
the voting. This issue was also to reappear several times, and
each time, the issue was successfully quelled in the name of
expediency. The voting results would have undoubtedly been
somewhat different if a secret ballot were used as everyone
was forced to vote by a show of hands [cards] - many times in
front of peers and their employers.
The meeting was fairly obviously "staffed" by DCU employees.
The vote to remove the BOD (item #2 under consideration) was so
close that it had to be counted by hand. DCU tellers were used
to count all votes, and the votes were then tallied under the direct
supervision of the BOD, as well as being witnessed by supposedly
impartial witnesses who were seated next to Mark Steinkrauss. I
happened to be sitting very near the DCU employee section and it
was quite obvious that they were all voting against the removal of
the BOD. In addition, all of the vote counters (the DCU employees)
could also be plainly seen voting against the removal of the BOD.
Part way through the voting on item #2, there was a person who
was alleged to have moved from one row to another in order to cast
a second vote (presumably in favor of the BOD removal), and it was
unclear what resulted from this controversy.
Overall, the meeting began on a fairly tense note, but Robert's
Rules of Order were used somewhat effectively to sustain order in
the packed auditorium. The decorum was compromised to a certain degree
after the [non-secret] voting began and it became quite obvious where
certain voting blocks resided and a certain amount of mob behavior
ensued. Especially evident was the left side of the audience which
comprised a large majority of DCU employees and their management.
This was also where the DCU president and BOD members were seated.
This section tended to vote en mass, and was also quite rude at times.
The DCU employee section did not hold a monopoly on rudeness however,
as there were also several anti-BOD members who participated in the
rudeness as well.
I would like to commend Dave Garrod, who was perhaps the best
behaved (not to mention one of the best prepared) member in attendance.
Other good points were made by a man named Van Glick (spelling?),
Hutchinson, Greg Moody, Lust, and several others whose names I did
not catch. I should also add that aside from the fact that Mark
Steinkrauss was not too keen about giving up his chairmanship of
the meeting, that he did a remarkable job of maintaining his cool
under the intense pressure.
-davo
p.s. I came prepared to film the event on videotape so as to provide
copies of the event to fellow members who could not attend, but
I was not allowed into the meeting hall with my camera.
|
| 1639.127 | | MIZZOU::SHERMAN | ECADSR::Sherman DTN 223-3326 | Wed Nov 13 1991 03:25 | 4 |
| So, Dave, that was you I saw filming the guard at the door? I was
hoping they'd let you in. It was a rough meeting.
Steve
|
| 1639.128 | CNN wasn't interested ;^) | TOOK::DMCLURE | Did Da Vinci move into management? | Wed Nov 13 1991 03:52 | 17 |
| re: .127,
> So, Dave, that was you I saw filming the guard at the door? I was
> hoping they'd let you in. It was a rough meeting.
Yeah, that was me alright. I did manage to get some footage
of the hallway outside the meeting hall where people were waiting
to enter. It wasn't until I tried peering into the hall itself that
a guard grabbed my camera and told me that no recording devices were
allowed in the hall. Later, after I returned my camera to my car
and checked in, I noticed on the back of the member card the following
statement: "RECORDING DEVICES PROHIBITED: No audio or visual recording
of the meeting will be permitted."
-davo
p.s. You're right - it was a rough meeting!
|
| 1639.129 | | TOPDOC::AHERN | Dennis the Menace | Wed Nov 13 1991 11:00 | 36 |
| RE: .126
>DCU tellers were used to count all votes,
After what I saw last night I may just be more careful in future to
count any money I get from a DCU teller.
Of the 1,339 voting members who had checked themselves into the hall,
540 voted in the affirmative and 651 were opposed to the motion to
remove the current Board of Directors. That leaves 148 members who
either abstained or had already gone home. Now it's not unlikely that
people who could not make up their minds refrained from voting. In
fact, I had gone there wanting to hear the issues discussed and had not
made up my mind beforehand. However, it would not take much of an
error rate to throw off the tally. Each row was counted by two tellers
and they had to agree on the count. If they tended to round up on one
vote and round down on the other that could account for the spread.
I'm not saying there was a conspiracy to defraud the membership, but
the refusal to allow for a more accurate, and secret, balloting method
calls the process into question.
As I said, I went there with an open mind, wanting to hear some reasons
given why the current board should be removed or why they should stay.
I was even inclined to vote for the status quo, but watching how the
board and their supporters attempted to shut off debate and move the
question after their canned speeches had been made, I became convinced
that they were unable or unwilling to be called to account.
On the one hand, we were told that the board was not repsonsible for
the wrongdoings of the former President, to whom they deferred in the
day to day management of the DCU. On the other hand, we were told that
we needed their continuing watchful eye to get us through these
difficult times. Which is it?
I say they have sat too long in this place and they should go.
|
| 1639.130 | $.02 on last night's DCU meeting | MAST::DEROSA | I := not(number) | Wed Nov 13 1991 11:06 | 25 |
| I was disappointed in what appeared to be a last-minute lack of
organization in the group that organized the grass-roots
efforts to have the special meeting. The leaders of this effort did
not apparently even speak once.
Statements were made in support of the status quo (e.g., by some BoD
members) that went effectively unchallenged. Much has been written
already, but a response from one side to the other over a 2-week
period isn't the same as a response within 60 seconds. A verbal layout
out of the facts was essential, and it didn't happen.
Also, the crowd wasted about an hour on side issues about Q2 without
ever getting down to an airing of the issues. E.g., wasting time
on procedural points about an amendment before we've even debated the
actual question. The shenanigans with the chair of the meeting,
DCU employees counting the vote, etc. also didn't seem protested
very well. Democracy is great but sometimes crowds have to be nudged
along, otherwise they sometimes wallow around getting nowhere fast.
I know I'm not very effective in such a setting, so I chose not to say
anything myself. That is an appropriate criticism so
I'll admit it up front right now. I was looking for, but didn't get,
leadership from those who exhorted me to attend.
jdr
|
| 1639.131 | | SQM::MACDONALD | | Wed Nov 13 1991 11:08 | 50 |
|
Re: .126
I also stuck it out and would generally agree your account.
It just about squares with how it appeared to me. I was
sitting in the second row just to the right of the chairman's
podium.
One thing I would disagree with, however, is your point about rudeness.
In my opinion, Mark Steinkrauss maintained the very thinnest veneer of
impartiality. Again in my opinion, on several occasions by either
acting or not acting, he encouraged momentum that was clearly in the
favor of the BoD, and not in the interests of an impartial hearing and
consideration of the issues. I don't think that he did this
maliciously or even consciously but that his personal interest in this
affected his judgement. In my opinion, he definitely should NOT have
chaired that meeting which brings me to my point on the "rudeness." I
prefer to view the behavior as evidence of outrage and frustration at
what appeared to be bias and interest in not fairly and openly
addressing the issues for which the meeting was called.
I think the voting process on the second agenda issue was simply
a joke. The meeting room was packed. It was IMPOSSIBLE to verify
that the vote count was correct. The BoD made absolutely no
provision for a vote counting process that would leave no one,
pro or con, without question as to the validity of the result.
It was a headcount voting process and ALL the vote counters were
DCU employees. After they "counted" the votes among the general
membership, I personally witnessed those same counters standing
directly in front of the "head table" with their hands raised
voting en masse to retain the current BoD and their votes being
counted by the vote teller, who was an employee of the DCU's
auditing firm, and that vote being confirmed by the BoD chairman,
Mark Steinkrauss, or so it appeared anyway. Mr. Steinkrauss was
standing behind the auditor looking over his shoulder as he made
his count.
Now, I'm not suggesting that anyone involved in the managing of the
vote was unethical, but you who weren't there can draw your own
conclusions about how much confidence to have in the integrity
of that process and whether there was any room for abuse. Personally,
I have no confidence in that vote since there was NO provision to
satisfy all present that the result was correct and impartial.
Finally I felt bad for the DCU employees who were involved in the
whole thing, the pressure on them must have been tremendous. All
you had to see were the looks on their faces to know that.
Steve
|
| 1639.132 | | MIZZOU::SHERMAN | ECADSR::Sherman DTN 223-3326 | Wed Nov 13 1991 11:36 | 14 |
| re: .130
I agree that many of the "grass roots" folks didn't get to speak.
But, we did everything we could to get the basic issues out, including
generating a two-sided handout (that was printed and paid for with our
own money, of course) and distributed these to those who had interest.
It was the green sheet. We had 1000 of them done. They were all
handed out. Also, there were a few of us who got to speak. There was
much more that we would like to have presented, but in that environment
it was simply not possible. There was confusion and the crowd was
getting pretty irritated at anyone that shouted point of <fill in the
blank>. Debate was permitted for only small periods of time.
Steve
|
| 1639.133 | Time to move on | TNPUBS::JONG | Steve Jong/T and N Publications | Wed Nov 13 1991 12:05 | 15 |
| Not having gone to the meeting, I can only interpret replies by those
who attended. But it sounded like a classic New England town meeting
to me, from the blocks of valid but imported voters to the shaky grasp
of Robert's Rules of order to the counting of vote by hand. For future
reference, don't forget about the time-honored method of reversing
undesired voting results: wait until the imported block of voters
vote. Once they vote, they tend to leave. After they leave, move to
reconsider the vote 8^)
In the tradition of town meeting elections, I urge people to put this
event in the past and move on. Lingering bitterness about the protocol
of voting doesn't solve anything. In fact, to the several Noters who
have said, in effect, that they aren't suggesting the vote was rigged,
but we can draw our own conclusions, I say make an accusation or drop
the subject.
|
| 1639.134 | | SQM::MACDONALD | | Wed Nov 13 1991 12:27 | 38 |
|
Re: .133
> ...In fact, to the several Noters who have said, in effect,
> that they aren't suggesting the vote was rigged, but we can
> draw our own conclusions, I say make an accusation or drop
> the subject.
Well I'm one of those. My point was not to accuse but only
to say I have no confidence in the process used. The actual
tally may have been correct, right on the money, an accurate
representation of the wishes of those who voted, BUT I have
no confidence from the process they used that I can rely
on the result to know that.
What is my point, then? Before I went to last night's meeting,
I felt fairly certain that I was going to vote for the BoDs
removal but that was note a done deal in my mind. After attending
the meeting, seeing how they saw fit to manage it, and seeing
their collective attitude in person, I'm 1000% convinced that they
are out of touch; they aren't "getting it"; and they have got
to go. A simple example, the BoDs position on the fees was
presented by BoD member Jack Rugheimer. He opened his remarks
by politely telling us that determining fees was the BoDs
responsibility, and that the meeting was in error to even be
considering it. In other words, he told us it was none of our
business and that we had some gall even bringing it up! Do you
think that's evidence of a BoD that understands the DCU customers?
I don't.
The third agenda item passed overwhelmingly. The meeting called
for new elections within 90 days for ALL BoD positions. When
that time comes, I will vote and you can be sure that I will
NOT vote for any of the present BoD if they are running.
fwiw,
Steve
|
| 1639.135 | | SQM::MACDONALD | | Wed Nov 13 1991 12:42 | 23 |
|
Re: .130
What you say is true, however, there are perhaps several
reasons why. First, the organizing committee made it perfectly
clear that they had no interest in running anything but in only
raising the issues and letting the will of the members prevail.
At least one or more of the committee were accused of trying to
stage a coup so they could run things. Sitting in back of me
was a member of the organizing committee who stated that members
of the committee had received signals that their jobs were in
danger for this activity.
Given that, their low profile didn't surprise me and I think
it was warranted. The "dissidence" voiced last night more
appropriately came from well over 500 unhappy DCU members.
It was clearly not being orchestrated by a "small troublemaking
group" bent on "harrassing" the BoD out of office. But, however,
I'm not so sure the BoD took notice of that.
Steve
|
| 1639.136 | | 16BITS::DELBALSO | I (spade) my (dog face) | Wed Nov 13 1991 12:46 | 11 |
| re: .135
> was a member of the organizing committee who stated that members
> of the committee had received signals that their jobs were in
> danger for this activity.
If there is any shred of truth to this, the issue should be ODP'ed all
the way to Ken Olsen or God, whichever comes first.
-Jack
|
| 1639.137 | interesting exercise | LABRYS::CONNELLY | Television must be destroyed! | Wed Nov 13 1991 12:48 | 29 |
|
Neither side really presented their case, the dissidents apparently due to
not being organized enough and the BoD due to apparently not wanting to
respond to the arguments against them. The BoD followed the time-honored
Digital tradition of answering every question EXCEPT the one that was asked.
The dissidents seemed to get bogged down in parliamentary nit-picking.
You had to feel sorry for Steinkrauss, but the meeting was not conducted in
any sort of orderly fashion. Roberts Rules of Order seemed to apply in
some cases but be mysteriously invalidated by the DCU By-Laws in other cases.
A couple of BoD memebers said that some of the articles being voted on could
not legally be voted on given the By-Laws. So why wasn't this pointed out
BEFORE the meeting? Did article 3 depend on article 2 passing? Nobody from
either side ever said before the vote on article 2, and i still don't know.
The new CEO (Cockburn?) sounded very arrogant and hectoring when he spoke.
He couldn't survive with no BoD in place for the 90 days that was supposed
to intervene before elections could be held. Yet at the same time the
previous CEO (Mangone?) was alleged to have totally run the show with little
or no input from the BoD at that time. Lots of inconsistencies and unanswered
questions by the BoD, but apparently most members were afraid of ousting them,
since the results were made to sound ominous (but were never detailed in terms
of most likely to least likely--but possible--consequences).
No wonder i never go to town meetings! %-}
paul
P.s. don't you other 86691 DCU members feel scared that 1309 of us decided
your fate last night? :^(
|
| 1639.138 | | SQM::MACDONALD | | Wed Nov 13 1991 12:49 | 7 |
|
Re: .136
I'd agree with that.
Steve
|
| 1639.139 | | TOPDOC::AHERN | Dennis the Menace | Wed Nov 13 1991 13:03 | 8 |
| RE: .133
>to the several Noters who have said, in effect, that they aren't
>suggesting the vote was rigged, but we can draw our own conclusions, I
>say make an accusation or drop the subject.
The vote may not have been rigged, but the meeting certainly was.
|
| 1639.140 | :-) | NOVA::FISHER | Rdb/VMS Dinosaur | Wed Nov 13 1991 13:26 | 4 |
| RE:.133: I thought about the "motion to reconsider" but I hadn't voted
on the "prevailing side" and therefore was ineligible to so move.
ed, who had read his RRoO
|
| 1639.141 | Re:.137 | SAHQ::STARIE | I'd rather be skiing! | Wed Nov 13 1991 13:34 | 37 |
| Re:137
Yes I feel very concerned about the by-law provision which allowed this
to happen. I was very concerned about what could happen if the entire
board was voted out. I think that some continuity is necessary.
I intend to activly encourage a modification of the by-laws to require
a total membership written ballot to take action of this nature. I
don't feel that there was true represntative action there last night.
Those of us in distant locations are unfairly left out of this type of
recall meeting.
The management of th credit union does need change. The way to do that
is by getting new people to run for board vacanies and supporting them.
A complete turnover, however would be a disaster. The board needs to
know in detail what has gon on before if they are to govern
wisely.
I think, for example that it would be very difficult to deal with the
$18,000,000 particpation loan problem without direct knowlege of what
happened. I certainly hope that over time some of this can be
recovered.
I would urge the dissaisfied to contact individual board members on
specific items. I know from personal experience that at least two of
them will respond.
Lynching the whole represntative body if you don't
agree with their vote is not representative government.
I believe that the way out of this impasse is to deal directly with
individual board members, and to then vote out the ones who are not
objective and fair when their turn comes up.
dick
|
| 1639.142 | | SQM::MACDONALD | | Wed Nov 13 1991 13:38 | 23 |
|
Re: .137
> The new CEO (Cockburn?) sounded very arrogant and hectoring when he spoke.
> He couldn't survive with no BoD in place for the 90 days that was supposed
> to intervene before elections could be held. Yet at the same time the
> previous CEO (Mangone?) was alleged to have totally run the show with little
> or no input from the BoD at that time. Lots of inconsistencies and unanswered
> questions by the BoD, but apparently most members were afraid of ousting them,
> since the results were made to sound ominous (but were never detailed in terms
> of most likely to least likely--but possible--consequences).
I read Chuck's comments as not necessarily in support of the BoD,
but as concerned with the consequences of a successful vote to
oust the BoD. Since the vote to call for new elections passed
overwhelmingly, and the vote to oust the BoD failed by only 56 votes,
several people leaving the meeting theorized that there was plenty
of sentiment to oust the BoD, but that the process of doing it
should be via the special elections.
fwiw,
Steve
|
| 1639.143 | Motions to reconsider | CGVAX2::LEVY_J | | Wed Nov 13 1991 13:41 | 5 |
| I heard two motions to reconsider, but the Chair did not act
on them. Admittedly it was rather rowdy at the time. The Chair
also did not bring order for some time. The wrangling then began
about adjourning and considering question 3.
|
| 1639.144 | The BOD prevented a count verification | VIA::REALMUTO | Steve | Wed Nov 13 1991 14:00 | 34 |
| RE: Vote Rigging
My personal observation of the votes cast on item two is that,
although it was close (within 200 votes), there were clearly
more votes FOR removing the Board than AGAINST. The 1/3 of the
room were most of the DCU employees and Board supporters sat,
voted overwhelmingly AGAINST the item -- I'd say 75% AGAINST, 25% FOR.
The other 2/3s of the room voted, voted clearly FOR the item -- I'd
say 70% FOR, 25% AGAINST, 5% did not vote. The votes as counted by
the DCU tellers did not match my personal observation.
The most significant problem with the way the vote was taken is
that THERE WERE ABSOLUTELY NO CHECKS AND BALANCES on the process
to assure a fair count. All 16 counters were DCU employees who
we later witnessed vote AGAINST the motion. The only people involved
in tallying the individual counts were members of the Board or those
working for the board, including the accountant supervising the counting.
I personally observed the 2 counters for our row violating the
procedure established by the accountant supervising them. They were
supposed to be at each end of the row and arrive at their counts
independently. Instead, they stood next to each other at one end
of the row; one asked the other what number she had and simply wrote
it down.
Several motions were made to verify the count by having members
deposit their blue voting cards in FOR or AGAINST boxes as they
left the room. This would have eliminated any question about the
validity of the count FOR or AGAINST, but the DCU chairman,
Mark Steinkrauss, ruled the motions "out of order." Draw your own
conclusions as to why the DCU Board would not want an accurate
count that could not be challenged.
--Steve
|
| 1639.145 | The board makes it hard to separate individuals | ULTRA::HERBISON | B.J. | Wed Nov 13 1991 14:13 | 14 |
| Re: .141
> Lynching the whole represntative body if you don't
> agree with their vote is not representative government.
Ignoring the loaded term `lynching', it is hard to figure out
which board members to keep and which to vote out when board
members don't make individual statements. The response placed
in the DCU conference was for the whole board and it has been
reported that the statements for the board last night were made
by one representative rather than through statements of
individual board members.
B.J.
|
| 1639.146 | very educational experience... | TOOK::DMCLURE | Did Da Vinci move into management? | Wed Nov 13 1991 14:44 | 90 |
| re: .131,
You're probably right about the source of most of the anti-Bod
rudeness (which IMHO was far outweighed by pro-BOD rudeness). Had
the meeting been chaired by an imparital chairperson, there would have
been much less time wasted arguing over impartiality and perhaps more
of the DCU membership would have been allowed to speak (Steinkrauss
was also able to choose whom to recognize on the floor, and both the
BOD, as well as the BOD supporters were given precedence). I think if
you reread my comments about Steinkrauss in my reply #.126, you will
see that my compliments towards Steinkrauss were based solely on his
ability to maintain his cool under pressure (i.e. it was a slick show).
I never meant to imply that he was maintaining any sort of partiality
as meeting chairman.
There are a few other things which I neglected to mention late
last night after the show: first of all, the layout of the meeting
was quite interesting. There was exactly one microphone for the
entire crowd of [1309?] people to use to address issues, and it was
located on the left side of the auditorium squarely in front of
the DCU employee section, and a mere 10 yards from DCU president
Cockburn, Abbott Weiss, and Jack Rugheimer (the only BOD members who
chose to speak), as well as Susan Shapiro and Dan Infante (who were
seated in the front row on the far left side), and I didn't notice
where the remaining BOD members (Jef Gibson and Charlene O'Brien)
were located.
The positioning of the microphone directly in front of the DCU
cheering section the way it was made it very convenient for BOD
members and DCU employees to voice their opinions, and quite difficult
for many others to not only reach the microphone, but, once at the
microphone, there were many times when the speakers could not be heard
due to loud heckling from the DCU employee section. At one point during
an attempted speech by a DCU member, I turned to the hecklers who
were intentionally drowning out the speaker's voice and said "the
gentleman has the floor", to which I was treated with various calls
to "shut-up" and other rude remarks. This sort of pro-BOD rudeness
was prevalent throughout the meeting (except, of course, when a BOD
member or supporter approached the podium to speak).
Given the fact that I sat directly across the isle from president
Cockburn and Abbott Weiss (thanks to a couple of friends who spotted
me standing along the wall and waved me over to sit next to them in
what turned out to be choice seats), I was also privy to a good deal
of the eye contact and non-verbal communication going on between Cockburn
and Steinkruass. It was a little like watching the secret hand signals
between coaches at a professional baseball game. There was one point
where, during the final counting of the votes for item #2, DCU member
Gransewicz approached the podium to witness the vote count and president
Cockburn nearly had a cow. He jumped up snapping his fingers and pointing
at the DCU member like a hound dog at a duck hunt in an apparent warning
to Mark Steinkrauss and other DCU affiliates involved in the vote counting
that an intruder was in the midst (this was but one example of the
subtle and very organized communication taking place behind the scenes).
Another irritating thing was the way the DCU lawyer (hired with our
DCU legal funds) would only speak in whispers to Mark Steinkrauss, even
after several motions for his comments to be aired publically and/or
for him to speak to the audience as well (after all, this lawyer was
supposedly hired to represent the entire DCU membership, and not just
the BOD). This secrecy only added to the overall sense of arrogance
and patronizing attitudes of the BOD and the DCU employees towards the
general DCU membership.
One final point I would like to add is the fact that the DCU also
seemed to be directly in charge of who was allowed into the meeting
hall (and subsequently who was given a voting card). There seemed
to be a couple of women in charge of holding the blue cards who
stopped by to talk to president Cockburn on several occasions during
the meeting. It was impossible to tell whether these women were actual
DCU employees, or whether they were in fact impartial observers, but
they sure seemed like DCU employees to me. Whether this fact means
anything or not depends upon how one trusted the way the meeting was
conducted or not. Chances are, this fact would only tend to fuel the
fires under those who did not trust the process.
All in all, the whole event was very educational if nothing else.
I think there were a good many lessons learned last night, and there
were also a good many eyes opened to the sorts of attitudes and
business conduct of not only the DCU BOD, but also of DCU employees.
Despite a few fleeting momments of vindication (such as the outcome of
of item #1, and the deafening applause after the count of votes on item
#3), I also sensed an underlying feeling of powerlessness among the DCU
membership (the majority of those I talked to felt manipulated by the
way the meeting was conducted). As such, I imagine the full impact of
this event has yet to be completely felt, as this event may lead most
DCU members to conclude that their only real power rests in their final
decisions of which financial institution they wish to entrust their money.
-davo
|
| 1639.147 | | SQM::MACDONALD | | Wed Nov 13 1991 15:18 | 19 |
|
Re: .146
Very interesting. Your points about the position of the microphone and
the apparent silent signaling et al. From where I sat nearly in
front of the podium, the heckling and rudeness from the DCU employee
contingent was not detectable, at least by me. I was not at all aware
of any heckling of speakers. Now I'm madder still!
> ... As such, I imagine the full impact of this event has yet to
> be completely felt ...
You can say that again. As the famous quip goes, "It ain't
over till it's over." If the BoD is thinking they can breathe
easier now, I think they missed much of the point of how things went.
Steve
|
| 1639.148 | | AMAMA::PETERM | | Wed Nov 13 1991 15:40 | 7 |
| one minor point, I was under the (possible mistaken) impression that
the man sitting next to Mr. Steinkrauss was not Mr. Rice, the lawyer,
but the parlimentarian. Many of the consultations that I observed
involved this person pointing at a book (that I assume was RRoO).
- peter
|
| 1639.149 | | MIZZOU::SHERMAN | ECADSR::Sherman DTN 223-3326 | Wed Nov 13 1991 15:40 | 21 |
| Well, overall I'm not too bothered by how the meeting went. The only
item that didn't pass was item 2. But, since item 3 passed it means
that DCU shareholders all over should be given opportunity to decide on
all Board seats. And, since item 1 passed there coulc hardly be a
stronger vote of no confidence short of dismissing the Board. Note
that this kind of vote is a lot stronger and has more impact on the
Credit Union than closing accounts. If you're a member, you'll be able
to vote. It is one of the few opportunities that most of us will have
to make our votes count for good. I applaud the decisions of the
voting members at the special meeting. The end result is that all
members should be able to participate and be heard in establishing the
new directions for DCU.
Nobody has really mentioned this, but I personally am very thankful to
the many who supported attendance at this meeting. It was not a boring
evening. Nor was it dominated by one side. I think that it was a good
representation of DCU members. Even though there was confusion, it was
usually quite a thrilling experience to see the forest of blue cards
held up during votes. The silence was often deafening.
Steve
|
| 1639.150 | Sometimes patience is not a virtue :-( | ORABX::REESE_K | just an old sweet song.... | Wed Nov 13 1991 15:44 | 25 |
| Even though I DO love living in the Pearl of the South.....I wish
I could have attended last night.
I would like to thank those of you who gave your time and energy
trying to help those of us who do work in the remote locations....
especially those who took vacation time, set up personal meetings,
etc. I wish I could say that the DEC I've worked for these last
12 years wouldn't allow someone's job to be threatened for activities
associated with this issue, but I'm no longer that naive :-(
I hate to appear brain dead on this special vote that is to occur
within 90 days, but am I to understand this special vote will just
occur in the NE area and personal attendance is required....just
as last night's meeting was held?
If that's the case, let me get out my letter to the NCUA that I've
been holding awaiting further info from the meeting....
Karen
PS: If we can't get them all now.....get them later, assuming
OUR DCU can stand the delay. BTW, when does Steinkrauss
stand for re-election?
|
| 1639.151 | | MIZZOU::SHERMAN | ECADSR::Sherman DTN 223-3326 | Wed Nov 13 1991 15:50 | 7 |
| Hi, Karen!
My understanding is that the election to be called (scheduled?) in 90
days will be for all members as are other elections. So, you should be
able to vote from where you are.
Steve
|
| 1639.152 | The Fat Lady Hasn't Sung Yet! | ASDG::FOSTER | Calico Cat | Wed Nov 13 1991 15:53 | 27 |
| I think it was .141 who said that removing the entire board may not be
the best way to do things...
I wholeheartedly agree. I am absolutely delighted that the motion to
throw out the Board of Directors failed. I am equally delighted that
there will be a new election in 90 days. I am sincerely hoping that ALL
DCU members will make their opinions felt, instead of a mere 1400, not
even 1/10th of the DCU membership... and 500-700 people is even less.
If the option of a proxy or absentee vote had been available, then this
meeting would have been far more satisfactory. But it wasn't.
Americans have a legacy of not exercising their right to vote. And its
not surprising that this should spill over into the DCU situation. But
that doesn't mean that its fair to squelch that right, which is what a
yay decision on #2 would have done.
As a person who has done "my share" of communicating info about the
DCU, I am aware of how many people were left out of this process. And I
am determined to do my part in making this a "fair" process by
reminding colleagues, as the vote approaches, to do THEIR part.
I sincerely hope that the "heat" will not die down, and that reputable,
concerned members will run for seats on the Board, so that we have
choices.
But I never thought "ousting the board" was the way to go. I'm
delighted to find out that I was not alone in holding this view.
|
| 1639.153 | My view | ELWOOD::CHRISTIE | | Wed Nov 13 1991 15:54 | 16 |
| I, too was at the meeting. I noticed the DCU lawyer try to hide a
smile/laugh when someone who had the floor got the better of
the chairman.
It would have been better if Mr. Steinkrauss had let the facilitator
chair the meeting instead of constantly talking aside to him. One
more way that the meeting was unnecessarily dragged out.
As soon as it was known that any secret ballot would not be allowed,
I knew the BoD would not be able to be voted out. I am looking
forwared to the upcoming election.
It was a realy eye-opener as I have never attended a town meeting.
L
|
| 1639.154 | | CIS1::FULTI | | Wed Nov 13 1991 15:55 | 4 |
| Well, ok folks just who in the next 90 days is prepared to run against
any of the incumbants? Just wondering.
- George
|
| 1639.155 | Accusez-vous? | TNPUBS::JONG | Steve Jong/T and N Publications | Wed Nov 13 1991 16:54 | 3 |
| Anent .144 (Steve): See, this is on the verge of getting really ugly.
Do you accuse the DCU Board of Directors of rigging the vote?
|
| 1639.156 | | MU::PORTER | if it ain't broken, break it | Wed Nov 13 1991 16:57 | 17 |
| We do not yet know that there will be meaningful elections within
90 days.
1. Although the meeting was allowed to take a vote on the question,
I don't think that anyone actually agreed that the vote was
binding (this tactic was used for all 3 questions). The objection
was that it was not legal according to DCU by-laws.
2. The resolution called for elections to fill the board positions,
or words to that effect. The positions are already filled. Therefore,
something like a "null election" would seem to suffice - we get to
vote in candidates only for positions which aren't already filled.
dave
(Not a lawyer, but with considerable experience
as a picky S.O.B.)
|
| 1639.157 | | SQM::MACDONALD | | Wed Nov 13 1991 17:07 | 19 |
|
Re: .155
I'm not the Steve who wrote .144, but I commented on the vote
also. I don't think any accusations are being made. We were
both just commenting that the process was so fraught with
lack of clarity and holes that there was PLENTY of room for
abuse. No one can know for sure that there was any integrity
to the result. The point is that we shouldn't have to be wondering.
Re: the man on Steinkrauss' left.
The man to Steinkrauss' left with whom he continuously conferred
was Mr. Melchione, the parliamentarian. Attorney Rice was the
George Bush lookalike on the far left of the table.
Steve
|
| 1639.158 | | AMAMA::PETERM | | Wed Nov 13 1991 17:08 | 14 |
| >2. The resolution called for elections to fill the board positions,
> or words to that effect. The positions are already filled. Therefore,
> something like a "null election" would seem to suffice - we get to
> vote in candidates only for positions which aren't already filled.
Although this is the interpretation I had before the meeting, the
effect of voting in the affirmative on question #3 was to call
elections for all BoD seats within 90 days. That is how Mr.
Steinkrauss read the question in the meeting, and that is how I voted.
A stipulation that the position must be empty was never mentioned. I
will take the chairman of the board at his word.
- Peter
|
| 1639.159 | < NOT A DCU MEMBER > | GRANMA::FDEADY | | Wed Nov 13 1991 17:20 | 8 |
|
It seems to me the best way to vote is to put your money
where you feel comfortable. If the DCU is not competitive and
competent to maintain your money - do not give it to them.
just my humble opinion,
Fred Deady
|
| 1639.160 | | F18::ROBERT | | Wed Nov 13 1991 17:26 | 22 |
| According to someone who is in charge of a DCU office, that I know real
well, said that an election would be held, hopefully within 90 days.
This person said the the regular election would be moved up, and all
BoD positions would be up for reelection if they wanted to.
I also pointed out to this person that what would happen if a major
portion of the DCU membership pulled out all their funds out of the
DCU, a lot of people would not have a job, and there would not be any
reason for a BoD.
I also asked a question, how do I find out how to be put on the list of
People wanting to be on the BoD. She said she would let me know.
She just got off of the phone and said that I should call Mary Madden.
I also asked her where do I find out what a BoD is supposed to do. Also
what is the job of other people that are making the decisions at DCU
have for a job description, again she said talk to Mary Madden.
I will call her next monday and ask for all of the above.
Dave
|
| 1639.161 | The BOD did NOT rig the vote, however... | VIA::REALMUTO | Steve | Wed Nov 13 1991 17:27 | 29 |
| RE: <<< Note 1639.155 by TNPUBS::JONG "Steve Jong/T and N Publications" >>>
> Do you accuse the DCU Board of Directors of rigging the vote?
No, I specifically do NOT accuse the DCU BOD of rigging the votes.
However, I do question their judgement in allowing the vote count
to be taken in an obviously biased manner without any checks and
balances. Look what happened the last time adequate checks and
balances before were not in place!
I also take strong exception to Mark not allowing the count to be
verified as people left. How could it have hurt, if the count
were indeed accurate? To me, this indicates that the board was
not really interested in an accurate count.
I do accuse some of the tellers of not following the procedures
which had been established and have already posted my observations
in this regard. The counting was very disorganized and the method
seemed to vary considerably from each of the 8 pairs of counters.
I'm sure others could post their experiences with the counters.
My personal observations about the numbers could easily be wrong,
but they are what I truely felt at the time. As anyone there could
verify, it's near impossible trying to count tiny blue cards in a
room of 1400 people. Some rows were over thirty feet long. The
botom line is, a paper ballot would have eliminated any question
about the vote one way or another.
--Steve
|
| 1639.162 | No need to wait for the future... | BUBBLY::LEIGH | Quelle punny day! | Wed Nov 13 1991 18:02 | 16 |
| re .133:
>For future
>reference, don't forget about the time-honored method of reversing
>undesired voting results: wait until the imported block of voters
>vote. Once they vote, they tend to leave. After they leave, move to
>reconsider the vote 8^)
Seems to me that the voting on question #3 (new elections) very nearly
had this effect. A number of people left after #2, but before the
motion to adjourn was defeated. Question #3 was apparently interpreted
by many of the attendees to allow the current Board members to retain
their positions until a special election. In my opinion, that's why
question #2 was narrowly defeated, but #3 was passed by a substantial
majority.
Bob
|
| 1639.163 | | GUFFAW::GRANSEWICZ | Someday, DCU will be a credit union. | Wed Nov 13 1991 18:03 | 11 |
|
RE: .157
> Re: the man on Steinkrauss' left.
>
> The man to Steinkrauss' left with whom he continuously conferred
> was Mr. Melchione, the parliamentarian. Attorney Rice was the
> George Bush lookalike on the far left of the table.
Mr. Melcione is DCU's General Counsel. He is not the independent
parliamentarian that we were told we would have.
|
| 1639.164 | Where are our professional bankers ? | PCOJCT::GRAY | | Wed Nov 13 1991 18:20 | 21 |
| I am concerned that the BOD for a financial institution, with access to
appropriate resources to ensure accurate accounting, would take such a
casual approach to this matter. Surely, they have access to legal
council and demonstrated forsight in having council present. (I wasn't
present. I'm going by various accounts in this conference.) There was
also mention in an earlier note that there was someone from the
auditing firm present (?).
I am surprised and disappointed that our elected BOD did not act in a
more responsible and professional manner in handling this situation.
The proper method of conducting this event would have been by a ballot
conducted and tallied by the auditing firm.
Accusations should have been anticipated and avoided by the simple
process I have just suggested. The mere appearance of wrong doing or
incompetence should have been forseen and avoided.
The Mangone (Sp?) incident should have demonstrated the importance of
audit trails. Apparantly not.
BG
|
| 1639.165 | | TOPDOC::AHERN | Dennis the Menace | Wed Nov 13 1991 18:31 | 8 |
| If there had been any opportunity for discussion last night, I would've
liked to ask the new DCU President, Mr. Cockburn (sp?), what was meant
by his statement that he had been monitoring the VAXNOTES discussions.
This notesfile, as well as the DCU notesfile, are for internal use
only. Can someone please explain how come a non-employee is monitoring
this discussion in VAXNOTES?
|
| 1639.166 | Less in favor on actual count | TYGER::GIBSON | | Wed Nov 13 1991 18:42 | 17 |
| I was in attendance last night, and was one of the people who left while
the motion to adjourn was on the floor, missing some of the best parts
of the meeting.
In the front right section, where I was seated, when we were asked to
vote for the actual count, it was evident that a number of people
changed their votes from the previous two card-raisings. Some of it
could have been confusion -- the rows were not straight, so it was
hard to tell from the middle which row was being asked to vote. But
some could have been intimidation that others would easily be able to tell
how an individual voted. Only one other person in my row voted for #2,
and he was not seated next to me.
The entire meeting was an educational experience.
Linda
|
| 1639.167 | Copied from meeting agenda | ELWOOD::CHRISTIE | | Wed Nov 13 1991 18:47 | 17 |
| From the "blue card" from last night.
1. A rescission of all changes to DCU "checking" (share draft)
account terms, conditions, options and fees made since
August 1, 1991.
2. A removal of all DCU Directors, under Article XIX, Section 3
of the DCU Bylaws.
3. A call for new elections within ninety (90) days of the
Special Meeting to fill all Board of Directors positions,
under Article VI of the DCU Bylaws.
Note that in Item 3 it doesn't say that the positions are vacant.
|
| 1639.168 | | SQM::MACDONALD | | Wed Nov 13 1991 18:50 | 10 |
|
Re: .157
I didn't know that, but in any event, he was introduced to the
meeting as the parliamentarian and there was no reference to
him being DCUs general Counsel. An interesting conflict of
interest.
Steve
|
| 1639.169 | | TOKLAS::feldman | Larix decidua, var. decify | Wed Nov 13 1991 19:13 | 14 |
| re: .168
Acting as both parliamentarian and general counsel to the Credit Union is not
a conflict of interest. Both are advisory positions in which the
individual's personal responsibility is to the corporate entity, and
not to the individuals who are members or directors of that entity.
Acting as both general counsel to the Board of Directors and general
counsel to the Credit Union ought to be considered a conflict of
interest, in my opinion, but in actual practice isn't. Actual practice
seems to be that the Directors define the interest of the corporation
(used loosely here), until proven that they have failed their responsibilities.
Gary
|
| 1639.170 | | TOMK::KRUPINSKI | Repeal the 16th Amendment! | Wed Nov 13 1991 19:18 | 45 |
|
Digital Equipment Corporation Philosophy Effective: 01-DEC-90
Section: 1.03
First Rule
When dealing with a customer, a supplier, or an employee, do what
is "right" to do in each situation.
It would have been "right" for each DCU member to have come
to the special meeting with some semblance of an open mind,
to hear both sides of the issues, and to have voted after
having considered what each side had to say.
It would have been "right" for the chairman to step
down at the first suggestion of a conflict of interest.
It would have "right" for the meeting to have been conducted
in an atmosphere of sufficient trust that there would be no worry
that the will of the participants would be subverted by parliamentary
wrangling.
It would have been "right" for balloting to have been done in
a secret, independent manner, with equal participation from
partisans on both sides.
It would have been "right" for both sides to be allowed to present
their sides in an equitable fashion.
It would have been "right" for every person who wanted to be heard
to be afforded the opportunity to do so.
It would have been "right" for real communication to have taken
place, for a real exchange of information.
Consider the extent to which various participants in
the DCU special meeting of November 12 applied the "first rule".
I believe the answer speaks volumes about each person who did, or did
not apply the first rule to the best of their ability.
Tom_K
|
| 1639.171 | | TOOK::DMCLURE | Did Da Vinci move into management? | Wed Nov 13 1991 19:59 | 52 |
| re: .148,
> one minor point, I was under the (possible mistaken) impression that
> the man sitting next to Mr. Steinkrauss was not Mr. Rice, the lawyer,
> but the parlimentarian. Many of the consultations that I observed
> involved this person pointing at a book (that I assume was RRoO).
My mistake. As was pointed out in preceding replies, Mr. Rice
(the DCU lawyer) was seated at the far left. According to Mr. Gransewicz
in reply #1639.163, (and he should know as he was the most likely the
only person not directly employed or sanctioned by the DCU BoD who made
it onto the stage during the vote count) the man I was referring to was
apparently Mr. Melcione, DCU's General Counsel (our [impartial???]
parlimentarian).
There were motions to ask Mr. Rice (the lawyer) to speak to the
issues however, as he never did choose to do so voluntarily. I don't
recall the exact outcomes of these motions (they may have occurred
around one of several points of total confusion in which the chairman
basically allowed the meeting to wander off the deep end - ultimately
wasting all sorts of time), but we never did hear from either Mr. Rice
or Mr. Melcione. Regardless of who it was that served as Mark Steinkrauss's
advisor, the whispering and secrecy between Steinkrauss and his advisor
which ensued following almost every point of order or inquiry was annoying
and could have been avoided entirely had one of the several competent
parlimentarians who were present been allowed to chair the meeting.
As to my point about the heckling, it should be pointed out that
the beginning of the meeting was somewhat more civilized, and most of
the heckling didn't begin until after the [non-secret] voting began.
One particularly ugly turning point began as DCU president Chuck Cockburn
refused to step down from the podium after his allotted 5 minutes
while giving his canned speech around item #2. When a member protested
Cockburn's apparent defiance of the time limit, this event sparked the
bulk of the heckling from the DCU employee section which continued off
and on throughout the remainder of the evening.
As to my gloomy summation in #.126 on the outcome of the evening,
I suppose the fact that I ended up with relatively little sleep last
night might have something to do with this. The fact that the checking
account fees were rescinded and the new elections will supposedly be
called for within 90 days should be good news to those concerned about
the quality of service and future competence of the DCU BoD. The fact
that item #2 was defeated and the board remains in place means that
the board members will be spared the embarrassment of having to step
down involuntarily, so they (as well as those who would lose sleep
over such an event) should feel happy about that as well. The optimist
inside me wants to say that everyone won something last night, but
I guess I'm still a little too tired and ticked off about the way
it all played out to be optimistic just yet. Time will tell...
-davo
|
| 1639.172 | Unrealistic expectations | GUFFAW::GRANSEWICZ | Someday, DCU will be a credit union. | Wed Nov 13 1991 20:01 | 49 |
|
A few quick observations about the conduct of the meeting last night:
1. I would have preferred that none of that $35,000 (that it was
implied we were forcing DCU to waste) was spent on expensive
little food treats.
2. I would have preferred that the money spent above, would have
been used to hire a truly, independent and uninvolved
parlimentarian and replacement for the chair. Though I, and
many others raised our cards to speak, we were deliberately not
called upon. In contrast, DCU's Directors, President and head
of the Mortgage Dept. (Gooley) has no trouble whatsoever in
being recognized.
3. I would have preferred that there was more than 1 microphone
located at the front of the room, near the podium. This is NOT
where the majority of the people were sitting. It was, however,
located with 15 feet of DCU Directors Weiss, Rugheimer, and DCU
President Cockburn, the only people who has a chance to speak on
item 2.
4. I would have preferred that an independent accounting firm had
been hired to conduct the tallying of secret ballots. The
counting of votes by people involved in the voting was an
unbelieveable sight. A secret ballot, had it been prepared for
and set up, would not have taken much longer than the method they
chose. It would have eliminated all the obvious conflicts
of interest and provided a truly verifiable vote that people
(some under scrutiny) would have been comfortable casting.
Anybody interested in a fair vote would have had no trouble
allowing this.
5. I would have preferred that both sides could have had a chance
to put forward their positions and the Directors would have
responded in an open and forthright manner.
6. I would have preferred DCU not waste our money on a lawyer who
we were told represented DCU, yet was unable to render an
opinion when called upon to do so. Why was he there?
Guess I just expect too much from DCU and the BoD. I don't think
any of the above is unreasonable. It would have gone a LONG way
towards making the meeting what everybody wanted it to be, productive.
At this point, I feel that DCU's and the Board's handling of the meeting
wasted the $35,000 they implied the petitioners were wasting. If they
don't get the message and another meeting must be called, then they shall
not be entrusted with handling these items since they have proved their
ineptness last night IMO.
|
| 1639.173 | This Item was for you | MLTVAX::SCONCE | Bill Sconce | Wed Nov 13 1991 20:08 | 48 |
| .152> I wholeheartedly agree. I am absolutely delighted that the motion to
.152> throw out the Board of Directors failed. I am equally delighted that
.152> there will be a new election in 90 days. I am sincerely hoping that
.152> ALL DCU members will make their opinions felt, instead of a mere
.152> 1400, not .152> even 1/10th of the DCU membership... and 500-700
.152> people is even less.
As one of those who made the (relatively short -- only 100 miles) round trip
to Framingham last night, let me say that I too am delighted that a vote was
taken which mandates a process enfranchising ALL members. That's why I went.
And I think this is true for almost everyone else who voted for Item 3.
It's too bad that the Bylaws are worded in such a way that only members who
can travel to Massachusetts can launch such a process. Perhaps a new, more
responsive Board will correct this lopsidedness, and write into the Bylaws
less "Massocentric" mechanisms for member control.
.152> As a person who has done "my share" of communicating info about the
.152> DCU, I am aware of how many people were left out of this process.
.152> And I am determined to do my part in making this a "fair" process by
.152> reminding colleagues, as the vote approaches, to do THEIR part.
Please do. And so should everyone else, ESPECIALLY all of you who live far
from Framingham. YOU are the majority! Please spread the word. The ballot
information mailed by DCU will probably not do so, any more than the official
announcement of the Special Meeting did. The nominating committee is
appointed by the Board -- and "In all cases, final approval of official DCU
campaign literature must be given by the nominating committee chairman."
(Official words, from Section II C of "DCU Election Guidelines".)
Whether you vote for or against the Board, YOU have control of the Board's
legal basis. I hope you exercise it. DCU will have been cleansed even if
your vote returns the sitting Board to office. (This is meant sincerely,
although personally I'd feel a little strange voting for people who last
night manifested a singleminded intent to deny you any opportunity for that
vote.)
.152> I sincerely hope that the "heat" will not die down, and that
.152> reputable, concerned members will run for seats on the Board,
.152> so that we have choices.
They will run. We will have choices.
(So long as the elections called for by Item 3 actually happen. From the way
things were conducted last night, many people would predict that there remains
a substantial fight to keep the Board from "refusing to allow" them.)
|
| 1639.174 | One opinion. | A1VAX::GUNN | I couldn't possibly comment | Wed Nov 13 1991 20:45 | 33 |
| I was at the special meeting last night. In my opinion neither the
Board of Directors nor those who intiated the special meeting conducted
themselves in an appropriate manner for such an occasion. The truly
paranoid of whatever persuasion would have found ample evidence that
the other camp was out to "rig" things.
It's a pity that there is no tradition of debate in the U.S. There was
certainly none last night. Neither the Board of Directors nor those who
initiated the special meeting attempted to discuss the motions or rebut
the arguments of their opponents. Instead we got an hour of pointless
procedural maneuvering. It wasn't any bias of the chair that prevented
discussion. The Board stonewalled attempts to engage them and the
opposition (not necessarily those who initiated the meeting but their
camp followers) preferred to rely on interruptions as a tactic.
Previous replies have compared this meeting to a New England Town
Meeting. Personally, I think that's an insult to all those residents
and local government officials who work to make Town Meetings one of
the last bastions of participatory government. No town meeting I ever
attended was such a shambles. If more of the audience were experienced
in the ways of town meetings, we could have had the whole process over
in half the time.
I don't think anything was rigged. The strategy the Board adopted might
have been appropriate for dealing with dissident shareholders at an
Annual Meeting where the majority of institutional investors are
satisfied with management, but the DCU membership is quite different.
Those who intitiated the meeting should have realized that part of the
following they gained was drowning out, through their emotional
response, the legitmate questions that had been raised.
$35,000 of DCU (our) money - the cost of the meeting - not nearly as
productively used as it could have been.
|
| 1639.175 | another view | BEING::MCCULLEY | RSX Pro | Wed Nov 13 1991 21:07 | 135 |
| It's a game. The game is power. They have it, and want to keep it.
We gave it to them and want to take it back (or at least to exert our
right to it). The rules are fairly simple: Robert's Rules of Order,
the DCU By-Laws, and various state and federal laws, and maybe the NCUA
rules. I believe the precedence ordering is that the By-Laws are those
rules specific to this particular organization and thus supersede RRoO,
and the force of law is paramount over both.
They played by the rules, and won. So far, 'cuz the game's not over.
.147> If the BoD is thinking they can breathe easier now,
.147> I think they missed much of the point of how things went.
I don't think they could have missed it. They packed the hall, pulled
out all the stops, and barely squeaked by with a win that could perhaps
be challenged legally (on the issue of impropriety in vote count
procedures) if they try anything too egregious like ignoring the vote
on issue 3. I don't think they should sleep well at night from those
results.
Some of their play looks bad in local context but may be bad tactics
and good strategy.
For example,
.130> the crowd wasted about an hour on side issues about Q2 without
.130> ever getting down to an airing of the issues.
Discussion on item 2 began with Rugheimer stating (for the official
record as provided in the minutes) that it was his opinion that the
item was not legal, for five stated reasons. The chair (Steinkrauss)
over-ruled him and allowed the item to be considered. Why? Strategy,
maybe?
Well, perhaps that was laying the groundwork for a petition to a
court having jurisdiction to invalidate the action as being illegal.
Remember, state law would take precedence over by-law and RRoO. It
would also not be bound by the decision of the Chair to allow
consideration of the item (as the Chair was required to do, under DCU
By-Laws).
One issue cited by Mr. Rugheimer was that the bylaws specified that BoD
members faced with ouster were to have the right to speak on their own
behalf. So I made it a point of inquiry to ask the Chair whether their
participation in discussion and debate on the issue would constitute
having their right to speak. Obviously the determination of a court
could override the Chair's response, but the record of the meeting
provided to any court would now include that specific question and
answer. Thus this might make it more difficult for a petition to
convince the court that removed directors were in fact denied their
rights.
The little byplays were fascinating. That initial skirmish between the
Chair and Mr. Hutchinson over the procedural question about ballots was
just sparring over who had the upper hand in the meeting, to draw the
lines and set the stage. The issue about amendments was much the same.
Ditto the attempt to dislodge Mr. Steinkrauss from the Chair (not a
good idea, IMHO, the order of succession is defined and no improvement
would have resulted while more potential loopholes would have been
created).
.126> despite several motions to find a more impartial meeting
.126> chairman, on each such occasion, [...]
.126> the motions were eventually withdrawn.
I believe one such motion was voted upon, and Mr. Steinkrauss was
confirmed in his occupancy of the Chair.
That was significant, the Chair has power. Remember, that's the game.
.126> I should also add that aside from the fact that Mark
.126> Steinkrauss was not too keen about giving up his chairmanship of
.126> the meeting, that he did a remarkable job of maintaining his cool
.126> under the intense pressure.
I agree. He was not impartial, that is to be expected and may be
entirely proper. The Chair has power, partiality in the exercise of
that power is not prohibited by the rules of the game. The meeting was
attempting to strip him of his power, taking away something of great
emotional importance to him, it seems right that he would use all
resources at his disposal to defend it.
Fairness is important. The underlying reason for RRoO is to ensure a
level playing field in this game, but they cannot eliminate the home
field advantage of incumbency. The issue of fairness is involved in
another area, that of not allowing proxies and requiring physical
attendence at the meeting. That's a tough call, I can see good reasons
for the present setup and good arguments against it. A special meeting
is by definition some issue too urgent to wait for the regular meeting,
so the expectation of time to educate remote members and execute a
proxy effort may be unrealistic. It is also unrealistic and unfair to
expect remote members to exercise their right to vote without access to
all information, including discussion at the special meeting. So the
existing process is imperfect, but we live in an imperfect world.
Anyway, face it, they played the game well. They stuffed the hall with
DCU employees who were primed with misinformation (I was seated near
their section, and comments I heard indicated a total lack of
understanding of the issues involved in this meeting). They stuffed
the hall with employees from their workgroups, primed with memos from
Digital executives endorsing the status quo (power-holders supporting
power-holders). They set the microphone in a location convenient to
their supporters. They let side issues like amendments wear patience
down, and then got everyone to agree to call the question before any
substantative discussion could take place.
The dissidents also played the game well, but with some major lapses.
One was not anticipating that the DCU employees would need to be wooed
with education about the issues really involved. As it was, they felt
personally attacked. The BoD was allowed to define the issues in their
own terms, and there was no effective answer. I don't believe there
was any significant assertion of wrong-doing but Mr. Weiss effectively
defended them against such. The most serious lapse was the failure of
anyone (myself included) to attempt to challenge the count of votes on
question 2. It would not have been sustained, but should have been
placed on record. I do not think that the lapse is insurmountable, but
it will make things more difficult.
So, the game is not over, yet. What now?
There are some serious questions concerning item 3 on the agenda. The
BoD could act to invalidate the action of the meeting on that basis.
However, there are some other serious issues regarding the validity of
other actions such as the vote on item 2. I would hope that the BoD
will see fit to accept the need to comply with the wishes of the
members voting last night, and not risk further complications by
seeking to avoid the special election that was called.
One thing is certain, they surely now know that the dissidents are not
a "small group". The dissidents numbered nearly fifty percent of a
sample biased to under-represent them (because of packing the hall with
DCU employees). What they choose to do with that knowledge remains to
be seen. Time will tell.
--bruce mcculley
|
| 1639.176 | Please elaborate | PLOUGH::KINZELMAN | Paul Kinzelman | Wed Nov 13 1991 21:21 | 13 |
| Re: .175
> The dissidents also played the game well, but with some major lapses.
> One was not anticipating that the DCU employees would need to be wooed
> with education about the issues really involved. As it was, they felt
Please elaborate. We came to educate, but were not given the
opportunity. The only forum we were called upon was for points of
order, etc., and that's very limited. We never got a chance to educate.
Please tell me how we could have done differently.
Also, I was under the impression that a chair was supposed to be
impartial.
|
| 1639.177 | | BEING::MCCULLEY | RSX Pro | Wed Nov 13 1991 21:26 | 44 |
| I want to respond to a couple of entries that were posted while I was
composing .175...
.174> neither...conducted
.174> themselves in an appropriate manner for such an occasion. The truly
.174> paranoid of whatever persuasion would have found ample evidence that
.174> the other camp was out to "rig" things.
Never attribute to malice that which can be explained by ignorance.
.172> 5. I would have preferred that both sides could have had a chance
.172> to put forward their positions and the Directors would have
.172> responded in an open and forthright manner.
Unfortunately, the meeting as whole made the decision on that, when we
voted on the motion to call the question and cut off debate. I would
also have preferred that discussion not be squelched, but since the
motions to call the question carried overwhelmingly it seems most of
the folks on both sides did not share our interest in hearing more.
.172> 4. I would have preferred that an independent accounting firm had
.172> been hired to conduct the tallying of secret ballots. The
.172> counting of votes by people involved in the voting was an
.172> unbelieveable sight. [...]
Agreed. And it was a truly unbelievable sight, just as the confusion
by the counters was unbelievable. That was just too sloppy for me to
believe it was dishonest. Certainly not verifiable though.
.172> Anybody interested in a fair vote would have had no trouble
.172> allowing this.
Reminds me of Dan Fry's impersonation of Nixon:
"Do you want justice? Not necessarily!"
Do you want an accurate and demonstrably true count? ...
.172> 1. I would have preferred that none of that $35,000 (that it was
.172> implied we were forcing DCU to waste) was spent on expensive
.172> little food treats.
It was poor politics, but may not have been an issue. The hotel's
standard package for a 1000+ person meeting undoubtedly includes some
sort of refreshments bundled with the space rental. Some hotels
require you to buy food and give you the meeting room for free...
|
| 1639.178 | Not in 90 days... | BOXORN::HAYS | | Thu Nov 14 1991 01:11 | 24 |
| RE:.152 by ASDG::FOSTER "Calico Cat"
> I am equally delighted that there will be a new election in 90 days.
'Ren,
I am sorry to tell you that you are probably incorrect. The new elections
must be "called" or scheduled in the next 90 days. The date of the election
must be the same as the normal annual election.
Part of Article VI of the Bylaws:
Section 8 e) Ballots mailed to the tellers must be received by the tellers
no later than midnight 5 days prior to the date of the annual meeting.
Section 8 f) ... the chairman shall make public the result of the vote at
the annual meeting.
IMNHO, item three, by referring to the Bylaws, calls for an election that
must be scheduled in the next 90 days that MUST be held as part of the normal
annual election right before the annual meeting.
Phil
|
| 1639.179 | We did our best | SMAUG::GARROD | An Englishman's mind works best when it is almost too late | Thu Nov 14 1991 01:52 | 48 |
| As a member who put a lot of effort (not as much as some but still a
lot) into organizing information prior to the meeting I was very
disappointed in how the meeting was conducted. We were well and truly
out maneuvered by a biased chair. I've got to give it to Mark
Steinkrauss he did a masterful job on question 2. Any time any of the
opposition raised a point of order he took ages to address it and
deliberately misstated things and confused people on what was currently
on the floor. We felt we had to raise some key points of order to avoid
any positive vote on 2 being disqualified on legal grounds.
Unfortunately these points took so damn long (largely due to Mark's
inept handling of them) that we alienated the meeting participants
enough such that an extremely well placed call for a vote to be taken
was passed by 2/3 of the assembly. Note not one of us got a chance to
actually debate the motion. I personally take a lot of the blame for
that, but honestly I only raised points of order (such as reading the
DCU bylaws) that I thought Mark was ignoring. The combined affect of
what I did and others that were clearly fed up with how the meeting was
being run allowed Mark to steer the meeting towards no discussion on
item 2. I think had we been allowed to present half the information I
put in my 14 page missive plus much other information we had we could
have carried question 2. We also came well prepared to address the
issue of what would happen if no board was in place for 90 days. The
credit union would not fold, it has happened before at other credit
unions and there is a well defined procedure to handle this case.
But the meeting decided that they didn't want to hear any discussion.
I feel that this was largely due to the fact that the procedural issues
bogged down the meeting. I hold Mark Steinkrauss primarily responsible
for this but I'm willing to accept my share of the blame.
I truly hope that the board do the right thing and don't try and throw
out the overwhelmingly passed call for elections within 90 days as a
technicality. If they do I can promise them another special meeting and
next time we'll go in as a TOTALLY coordinated team. Everyone has to
realize that the people that pulled the calling of this meeting
together were a very loose association. There was only one formal
meeting to debate strategy and a number of ad hoc meetings with a few
of these people only to discuss particular issues. You can be assured
that if a next time is required (I sincerely hope it isn't) we'll be as
near to perfectly organized and coordinated as the board obviously were
last night. We under estimated the power of the chair to steer the meeting
in the direction the chair wanted it to go. Mark Steinkrauss by definition
had to have a biased view. We were debating an issue he was very much
affected by. We did our best given the circumstances, I feel that many
members were cheated out of hearing the real issues debated. One saving
grace of course is that many more people, other than just ourselves, have
now personally witnessed how the board treats the membership.
Dave
|
| 1639.180 | opening moves | LABRYS::CONNELLY | Television must be destroyed! | Thu Nov 14 1991 01:58 | 25 |
|
re: .-1 (90 days etc.)
One problem for the dissidents was that they did NOT explain what the
consequences of voting either way on the 3 articles were. Was article
3 dependent on article 2? What exactly had to happen within 90 days?
What was the text of each By-Law (or relevant section) applicable to
each article? No answers.
It's like the VietNam War protests: the demonstrators got burned this
time, next time they'll be back with a better strategy (e.g.: their
own legal counsel) and maybe the authorities (BoD) will bring out heavier
defensive artilley (like: cops?? well, maybe: i expected the Fire Marshal
would arrive like a deus ex machina to shut down this meeting when the
size of the crowd became evident).
So this may be just the opening skirmish. That in itself might be a
source of concern to members who currently have all their assets tied
up in the DCU. It would be nice if the two sides could compromise, but
that ball now is in the BoD's court, since they seemed to feel that they
only had to answer the concerns that they felt were relevant and did not
even have to speak to the concerns of their opponents. Unbending on
that stance would be a good conciliatory gesture on their part.
paul
|
| 1639.181 | | 16BITS::DELBALSO | I (spade) my (dog face) | Thu Nov 14 1991 10:41 | 17 |
| re: Parliamentary wrangling
Keep in mind that an underlying concern which necessitated this meeting was
the fact that the BoD is considered untrustworthy.
Now recall that the BoD was responsible for arranging and chairing the meeting.
The points of order and inquiry that were called from the floor were so done
BECAUSE of the underlying concern regarding untrustworthiness. It was necessary
to ascertain that there was a clear, commonly held understanding on various
points lest the chair go off in various directions with his own tainted view
of the situation at hand (for the record).
Yes, it was unfortunate that the wrangling had to take place. The key phrase
is "had to". Because the chair was untrustworthy.
-Jack
|
| 1639.182 | | SQM::MACDONALD | | Thu Nov 14 1991 10:46 | 34 |
|
Re: .179
> One saving grace of course, that many more people, other than just
> ourselves, have now personally witnessed how the board treats the
> membership.
Amen!! If I was at all inclined to doubt the accounts of the
few who met personally with Steinkrauss, etc., the meeting wiped
out those doubts forever. I left satisfied that the accounts of
trying to work with the DCU positively as related by the "dissidents"
were not exaggerated and perhaps were even toned down and at least
trying to give the DCU the benefit of any possible doubt.
I had concluded from the evidence available to me that the BoDs
primary flaw was their contempt for the membership and that was the
reason that they had to go. On Tuesday, I witnessed worse than
contempt. It was contempt, disdain, condescension, malice, and
the most outrageous disregard for the integrity of the process
designed and intended for the entire DCU community, BoD, DCU
employees, and membership alike, to ensure the the DCU is nurtured
for our collective good. They proceeded in such a way as to
disenfranchise all those present who may have disagreed with the
way they were doing things and wanted to exercise their right to
object and I WILL ascribe this one to malice. They couldn't
possibly have been so ignorant of what they were doing that what
we witnessed was just honest to goodness bumbling.
I left with absolutely NO confidence in the ability of the BoD to
use integrity and good judgement in overseeing the DCU, and for
that the BoD have no one to thank but themselves.
Steve
|
| 1639.183 | | SQM::MACDONALD | | Thu Nov 14 1991 10:58 | 12 |
|
Re: .181
I would second this view. The majority of the wrangling was
because of lack of trust in the impartiality of the chair.
I believe Mr. Steinkrauss personally was most responsible for
this because of his refusal to step down and by the general
confusion that he allowed to go on. An impartial, experienced,
moderator would never have gotten him/herself in that mess.
Steve
|
| 1639.184 | | MLTVAX::N1BFK | Bill Sconce | Thu Nov 14 1991 11:09 | 19 |
| .180> One problem for the dissidents was that they did NOT explain what the
.180> consequences of voting either way on the 3 articles were. Was article
.180> 3 dependent on article 2? What exactly had to happen within 90 days?
.180> What was the text of each By-Law (or relevant section) applicable to
.180> each article? No answers.
True. Actually, you could say it was a problem for everyone there.
A lot of us expected that the agenda was just that, an agenda, and that the
special meeting would treat business "related to that purpose" as specified
in the Bylaws. But Mark Steinkrauss stated at the outset that the agenda
wording constituted the motions themselves (!), and that no amendments would
be allowed. (And they weren't. By the way, does anyone have an idea as to
a parliamentary or legal basis for that?)
Actually, someone did ask at one point about how question 3 related to
question 2. Mark Steinkrauss's reponse was that the meeting was working on
question 2 at the time and refused to allow any discussion of question 3.
|
| 1639.185 | Little nit | ELWOOD::CHRISTIE | | Thu Nov 14 1991 11:14 | 14 |
| I finally got into DCU. There is concern that the BoD will
not interpret "call for new elections" as holding elections.
I just checked my dictionary for definition of "call for".
1. To go and get or stop for
2. To be appropriate for
3. To require; demand
If I substitute "require", "demand" or "go and get", then I read it
as elections will be held in ninety days, not elections will be
announced in 90 days and held at usual time.
Linda
|
| 1639.186 | | SALEM::BERUBE_C | Claude, G. | Thu Nov 14 1991 11:16 | 25 |
| Rep to <<< Note 1639.182 by SQM::MACDONALD >>>
> I left with absolutely NO confidence in the ability of the BoD to
> use integrity and good judgement in overseeing the DCU, and for
> that the BoD have no one to thank but themselves.
Steve,
I'll have to agree with you wholeheartedly with you on this, in
concerning the Bod as a whole.
But as I entered in BEIRUT::DCU, one of my observations on the board
member I could visibly see during the meeting, (I was on the right hand
side in front) was Ms O'Brien (i believe that was the name, as
introduced as a board member) was doing a lot of visible noding in the
affirmative to a lot of the Point of ______ raised. In fact she even
noded yes to my suggestion that Mr. Cockburn be the Chair during
article #2 during one of the heated debates around Mr Steinkraus
chairing.
As a whole the BoD did us diservice, but individually there may be a
BoD member or 2 worth saving, if they'd just let us hear them
individualy.
Claude
|
| 1639.187 | We hit the papers!! | TYGER::GIBSON | | Thu Nov 14 1991 11:21 | 9 |
| The Boston Globe has a large article about the meeting on the
front of today's Business section. Paul Kingelman and Ronald
Boyan are quoted, along with an unnamed friend of several of
the directors. There is an explanation of the background of the
situation, and a fairly accurate account of the proceedings.
If I have time later, I'll type the whole thing in.
Linda
|
| 1639.188 | | GUFFAW::GRANSEWICZ | Someday, DCU will be a credit union. | Thu Nov 14 1991 11:35 | 55 |
|
>I was at the special meeting last night. In my opinion neither the
>Board of Directors nor those who intiated the special meeting conducted
>themselves in an appropriate manner for such an occasion.
People, let's try to understand something here. I have read several
references such as the one above. I wish the people who make such
statements would specify exactly who, or what event they are referencing
when making such comments. I believe the person making the above comment
has no idea who "those who initiated the special meeting" were and as
such cannot determine if they "conducted themselves in an appropriate
manner". 99% of the action at the meeting was NOT from the people who
organized the meeting. We were well aware of the fact that procedural
wrangling was NOT in our best interest and did NOT get into that. In a
crowd of 1300 people, we cannot be held to account for others words or
actions. Basically, the meeting proceeds how the meeting attendees
wish it to proceed.
>Neither the Board of Directors nor those who
>initiated the special meeting attempted to discuss the motions or rebut
>the arguments of their opponents.
We came well prepared to discuss the issues and facts. I sat 3-4 rows
back in the middle, not 10 feet from where Weiss, Rugheimer and
Cockburn sat. I raised my card repeatedly, made eye contact with
Steinkrauss and he would not recognize me. The only time he did was
when he HAD to. Just after Weiss' canned statement, I asked if the
statement was his or made for the Board because we had heard it before
in the BoD response that was sent out Oct. 29th.
There is no way that Steinkrauss should have been left in the chair.
His 5-10 minute speech before the motions were presented should have
immediately disqualified him from the chair. The chair is supposed to
be impartial and not participate in the discussion. He clearly did. I
do not understand many people's willingness to leave him in the chair
when it was clear that he was not impartial. I believe many people
were "too nice" (niave) and wished to give him the benefit of the doubt.
The price of that was a meeting which did not give everybody a chance to be
heard, much procedural wrangling and a LOT of time wasted because
Steinkrauss didn't know what he was doing up there procedurally. He
knew what he was strategy-wise though.
The other disappointment was the refusal of the attendees to use a
secret ballot on item 2 after being influenced by Steinkrauss' statement
that it would take 1.5-2 hours to do it. If we bothered to have the
damn meeting and go there, then we should have been willing to do it
correctly. Everybody was aware of the influences being placed on DCU
employees and Digital employees by the management of both companies. We
owed it those at the meeting who were under such scrutiny to allow them
to cast their votes in a way that was honest and not affected by the
eyes of the person they sat in front of. We, as a group, let them down
because we just couldn't be bothered with taking the time and doing what
was right under the circumstances. The saying that comes to mind is
"Never enough time to do it right, but always enough time to do it again."
|
| 1639.189 | | GUFFAW::GRANSEWICZ | Someday, DCU will be a credit union. | Thu Nov 14 1991 11:41 | 13 |
|
RE: .186
I would be careful about reading too much into head nodding. Jack
Rugheimer did exactly what you describe in 2 of the informal meetings
with the BoD. I interpreted it the same way that you did. Information
I now have and his statements during the meeting now leave me with
quite a different impression. I would suggest that we all wait for
hard evidence of a Directors beliefs, such as a speech or written
statement, before drawing conclusions. Charlene O'Brien DID put her
name to the BoD statement of Oct. 29th. That tells me much more than
head nodding.
|
| 1639.190 | | SALEM::BERUBE_C | Claude, G. | Thu Nov 14 1991 11:57 | 16 |
| Rep to << Note 1639.189 by GUFFAW::GRANSEWICZ "Someday, DCU will be a credit union." >>>
so true Phill
I was merely raising the point that there may be an individual or two
that may be in touch with the membership, but perhaps silenced by
having to go along with the status quo. We will never find out while
they continue to talk as a whole through one spokeperson, only if the
elections are truely opened up, as I hope article 3 will be
intrepreted, and they each speak their minds we may find out.
As it stands right now, there are at least 4 Bod member that will not
get my vote, based on last Tuesday meeting and the BoD rebuttal. It's
the other three I would like to hear from.
Claude
|
| 1639.191 | Guess they can't get everything right! 8*) | PLOUGH::KINZELMAN | Paul Kinzelman | Thu Nov 14 1991 13:03 | 5 |
| Re: .187
Saying the article was "fairly accurate" is an accurate assessment. 8*)
I even *spelled* my name and watched the reporter write it down
correctly on his notepad!
|
| 1639.192 | | CGVAX2::LEVY_J | | Thu Nov 14 1991 13:51 | 17 |
| The Chair was asked several times at the meeting if the other
directors wanted to speak, or had agreed to be represented by
those directors who were speaking. The ONLY answers were:
"I speak for the rest of the Board," from Mark S; and "Mr. Weiss
speaks for the rest of the board," from Mark S.
Never was it said that the rest of the Board had abrogated their
right to speak to ANYONE.
My interpretation of this was that as Director of the BoD, MS had
TAKEN this obligation and appointed Mr. Weiss authority to take
this stand. Since he was also Chair, noone was able to clear the
air or get a real answer.
I think (my opinion) that the rest of the BoD for better or worse
has been effectively muzzled.
|
| 1639.193 | | SALEM::BERUBE_C | Claude, G. | Thu Nov 14 1991 14:01 | 12 |
| From the Globe article
'Although the voting results showed that 1,191 members voted, more than
1,600 numbered agenda cards were handed out as members entered the
ballroom. The descrenpency led some members to feel voting wasn't
completely accurate.'
The 1,600 number is NEWS to me, M.S. stated that there was just over
1,400 members at the beginning of the meeting. When asked how many
actually registered after the vote on #2, he stated 1,309. Where were
the remaining 291 cards if handed out but only 1,309 member had
registered?
|
| 1639.194 | | AMAMA::PETERM | | Thu Nov 14 1991 14:07 | 18 |
| re .192
Mr. Steinkrauss was asked to rule on whether the statement made by
Mr. Weiss was to be considered the statement of the entire BoD. Im my
recollection, Mr. Steinkrauss responded that, he the other members of
the BoD had been given the opportunity to speak at the meeting, and
that they had no objections to Mr. Weiss statement. He also ruled that
the statement _was_ the statement of the entire BoD, and not simply
that of Mr. Weiss.
At that time, the lone BoD member who was sitting to the far left
side of the room (i.e. the side away from the DCU employees) was
nodding his head in apparent agreement. This man (whose name I did not
catch) voted against all three motions, I believe. (I am certain of the
first 2, but not so sure of the last one because of a lot of motion
around him.)
- Peter
|
| 1639.195 | | TOOK::DMCLURE | Did Da Vinci move into management? | Thu Nov 14 1991 14:19 | 11 |
| > At that time, the lone BoD member who was sitting to the far left
> side of the room (i.e. the side away from the DCU employees) was
> nodding his head in apparent agreement. This man (whose name I did not
> catch) voted against all three motions, I believe.
That must have been Jeff Gibson then, as he was the only remaining
male BoD member who I failed to locate in my reply #.146. I was also
not sure where Charlene O'Brien was located, but I think someone located
her in a previous note.
-davo
|
| 1639.196 | | 16BITS::DELBALSO | I (spade) my (dog face) | Thu Nov 14 1991 14:26 | 8 |
| I wish I had a transcript (or recording :^) of the entire meeting to verify
some of this. I do recall, at several points, although I cannot be sure
which ones, that when Steinkrauss was asked a question from the floor, he
would respond, pause, and then add "In my opinion", as if it were intended
as a non-binding disclaimer. I seem to think that one such occasion may have
been when asked if Weiss' speech covered the entire Board's position/statement.
-Jack
|
| 1639.197 | Fun with numbers | ULTRA::HERBISON | B.J. | Thu Nov 14 1991 14:41 | 17 |
| Re: .193
> 'Although the voting results showed that 1,191 members voted, more than
> 1,600 numbered agenda cards were handed out as members entered the
> ballroom. The descrenpency led some members to feel voting wasn't
> completely accurate.'
I don't have the article in front of me, by I recall that near
the start of the article there was a statement that about 1300
people attended the meeting. 1600 cards for 1300 people seems
excessive--I suspect that the Globe switched some numbers around
and should have said that more than 1300 cards were given out
and about 1600 people attended (some people weren't allowed it,
and some people allowed in couldn't vote because there was only
one vote for a joint account).
B.J.
|
| 1639.198 | Both could attend??? | TYGER::GIBSON | | Thu Nov 14 1991 14:51 | 6 |
| I thought only one person was allowed into the hall if a joint account
was held. At check-in, the couple ahead of me had a joint account. The
wife was told that, unless she had a separate account under her own
social security number, she could not enter. Both of them left.
Linda
|
| 1639.199 | DCU 11/12 meeting summary please | SMOGGY::CAROLLA | HOMEY DON'T PLAY DAT! | Thu Nov 14 1991 15:07 | 3 |
| I can't get to the DCU notesfile. Can someone that attended the
11/12 meeting summarize the events and the tone of the meeting.
How many people attended?
|
| 1639.200 | | SQM::MACDONALD | | Thu Nov 14 1991 15:19 | 16 |
|
However Steinkrauss responded to the question about Weiss' statement
constituting the position of the entire BoD, it was very clear
that he was being asked specifically whether it was or was not,
opinion aside, and the sense of his answer was very clearly that it
*was* to be considered the BoDs individual and collective response
to the issues. In fact he had to respond at least twice to the
questioner until the questioner was satisfied that his response was
clear.
If I recall correctly, among the comments made by DCU personnel
about the rules around the meeting, both parties to a joint
account could attend but only one could vote.
Steve
|
| 1639.201 | GLOBE article | MLTVAX::SCONCE | Bill Sconce | Thu Nov 14 1991 15:24 | 102 |
| from the Boston Globe, 14 November 1991, front page of Business Section
-----------------------------------------------------------------------
FRAMINGHAM -- A showdown for the top executives of the state's largest credit
union came at a raucous meeting in a hotel ballroom here Tuesday night stuffed
to the seams with more than 1,300 people. It ended after midnight, and the
directors of the Digital Employees Federal Credit Union were still standing.
But just barely.
After months of a simmering controversy amid a whiff of scandal at the $375
million credit union, most of it publicized over Digital Equipment Corp.'s
electronic mail system, the members were whipped into a near frenzy and the
high turnout should have been predicted. But by the look of the paltry
buffet table set up outside the meeting room at the Sheraton Tara, the credit
union appeared to be expecting about 100 people instead of 1,300.
"This is democracy in action," said one member, surveying the throng of fellow
credit-union depositors. "They should have done this in Rhode Island two
years ago."
The Digital employees credit union, which is a separate corporate entity from
the computer-maker, is one of the most financially sound credit unions and in
no danger of failing. Nonetheless, it has its share of troubles.
"The issue here is really over who owns the credit union," said Paul Kingelman
[sic], a credit union member and one of the dissident organizers. "The
depositors or the directors."
The trouble started earlier this year when the directors fired the credit
union's founding president, Richard D. Mangone, after uncoverins a series of
"suspicious" loans to nonmembers. The board also discovered that Mangone was
simultaneously serving as chairman of another Massachusetts credit union, the
troubled Barnstable Credit Union that was seized by regulators in March. The
directors sued Mangone over the apparent conflict of interest and accused him
of playing a "central and pivital [sic] role in the origination, administration,
and management of ... loans, which have involved extensive fraud and other
acts of wrongdoing."
Using stand-in borrowers, fraudulent documents and inflated real estate
appraisals, Mangone steered loans, some made in conjunction with Barnstable
loans, through the Digital credit union's board of directors, the lawsuit
said.
In June federal regulators sued Mangone and other Barnstable officials, saying
they defrauded the failed credit union of more than $47 million through the
creation of "straw" borrowers, falsified loan documents and bogus real estate
transactions.
The US Attorney's office in Boston also started a criminal investigation.
Meanwhile, many of the 88,000 members of the credit union wanted answers:
How could Mangone have worked for two credit unions simultaneously without
the board's knowledge? How could he steer non-member loans throught the
credit union? And, most important, how safe is my money?
The members say their attempts to get answers were stymied by the board.
Although they were told that the bank was insured through a performance
bond for much of the loss attributatble to Mangone's actions, they learned
little else.
Kingelman and other members say they tried for months to inspect the minutes
of the directors' meetings, to get a complete accounting of the finances
and to see loan records, but to no avail.
"They're very arrogant", Kingelman said. "They don't believe that the members
have a right to know how things are being managed. We're not worried about
our money, but we want to know what's going on".
Even supporters of the board members agreed that the directors were too
defensive. "They didn't take the dissidents seriously," said a man who
declined to give his hame but who said he was a friend of several of the
directors. "They treated them like rebelling adolescents."
The dispute led to a petition signed by 1,221 members calling for a special
meeting to oust the seven directors. For more than a month, the company's
electronic mail system has been abuzz with the latest updates and details
of the impending vote.
Tuesday night, amid chaos and confusion in the overcrowded ballroom, the
members voted by raising their hands. After the first vote the directors
called for a second to insure accuracy. After the second vote the directors
called for another vote of only those opposing the motion to remove them
from their jobs.
Finally, after more than three hours of debate and rhetoric, the tally was
announced by the credit union's chairman, Mark Steinkrauss. The totals showed
540 members had voted to remove the board members, while 651 voted to retain
them. However, a proposal to hold new elections within 90 days passed
easily.
Outside after the meeting one of the dissident leaders said the night wasn't
a total loss. "We really got a good turnout," said Ronald Boyan. "I'm not
sure the votes were counted right but I guess the people have spoken."
Although the voting results showed that 1,191 members voted, more than 1,600
numbered agenda cards were handed out as members entered the ballroom. The
discrepancy led some members to feel the voting wasn't completely accurate.
Steinkrauss could not be reached for comment and other credit union officials
declined to comment. In a statement, the credit union's director of
communications said "The board welcomes the opportunity to allow DCU's entire
88,000 members to elect a board of directors."
|
| 1639.202 | Quotes | CGVAX2::LEVY_J | | Thu Nov 14 1991 15:31 | 30 |
| re: .194
My notes read:
MS: Mr. Weiss speaks on behalf of the Board
Someone: You cannot overrule.
Brian McC: It IS in order.
MS: One moment please, the motion is unnecessary - the Chair and....
I speak for the Board......no other Board member is objecting.
Greg G: ...in the record that the Board could speak.
MS: In the record.
We never heard from the Board members themselves and no ever said
that the Board had given them permission to speak for them, only
..."no other Board member is objecting."
Maybe I'm being too specific here, but with all the lawyers and
points-of-[fill in], and legalities, I was very aware of specific
language and was careful to write down precisely what was said.
It was obviously implied that the Board was being represented, but,
unfortunately, I am not sanguine about it.
|
| 1639.204 | I don't have first hand information | ULTRA::HERBISON | B.J. | Thu Nov 14 1991 16:05 | 10 |
| Re: .198 (Both could attend???)
I didn't attend the meeting, but, like the author of .200,
that the couple you saw should both have been allowed in.
If I (or someone I was with) was refused entrance because of
not having an individual account, I would certainly file a
formal complaint. No member should be excluded from a
membership meeting.
B.J.
|
| 1639.205 | Open letter to DCU President | TOOK::MATTHEWS | | Thu Nov 14 1991 19:02 | 84 |
| This is an open letter to Mr. Cockburn, the new DCU president.
I am the short dumpy guy who sat across the aisle from you at
the DCU meeting with the red checked shirt. When I went to the
meeting, I had an issue with the DCU board of directors only.
Your conduct at the meeting convinced me that I now have a
concern with you.
In my opinion as the new president coming in from the outside,
you were not involved in the issue I had with the board which
was one of setting an arrogant policy and displaying disrespect
to the members of the credit union. I sympathize with the employees
of the credit union who have been abused by some of the more
militant credit union members. It is my belief that as the CEO,
it was your responsibility to buffer the DCU employees from the
furor surrounding the board of directors. You should have assured
the employees that the meeting was primarily between the board
of directors and the members and that their conduct should be
neutral and objective. They had the right to vote their conscience
as members but it was not an issue of credit union employees against
the credit union membership. Doing this, the integrity of your
position and that of the DCU employees would be preserved whatever
the outcome of the meeting.
Instead, I watched you clearly associate yourself with the most
arrogant members of the board of directors, conduct yourself
as if you were personally on trial, and orchestrate the conduct
of DCU employees so that they were as extreme in the defense of
the board as the most militant critics of the board were on the
other side of the issue. You have now totally involved the DCU
employees in a battle that they can not win. It is no longer an
issue of the board and its policies vs. the DCU membership. It
is now the DCU employees against the DCU membership. The conduct
of you and the DCU employees at the meeting alienated a significant
number of moderate DCU members. The likely outcome will be that
when a new board is elected there will be changes in policy that
will be directed against DCU employees that would not have been
considered before. If the elections are not held or not considered
to be fair by the moderate DCU members, they will withdraw their
accounts, especially automatic deposits from the DCU and you will
have caused a run on your "bank".
In your militant support for the board, you have sown the seeds which
could put your credit union in jeopardy. Based upon your resume,
you of all people should understand that confidence in your institution
takes precedence over the continuance of any individual or individuals.
Loss of that confidence alone is sufficient to doom the institution.
You have had your first test of leadership and you have failed. Instead
of conducting yourself in a way that established confidence in your
objectivity and responsiveness to the DCU membership you have given
the membership cause to suspect your objectivity, to question your
judgement, and to wonder what secret is so important to preserve that
you would act in the irrational partisan way that you did. You polarized
your own employees to act in a way that further eroded they confidence
of the very people that your institution depends upon.
If someone wanted to cause the DCU to fail for some deeply hidden motive,
they could not have done a better job than you did on Tuesday Night.
If you can understand the point I am making, start building trust with
the DCU membership. You can't stop the militants from being militant.
But your conduct and that of your employees should be such as to
establish confidence with the moderate DCU members. For starters, you
should make sure that the election of board members is perceived as
fair by the moderate DCU members. Secondly, you should make sure that
whatever the results, the DCU employees and you are not tainted with it.
If you wish to save your institution and despite how this letter sounds,
I think that is your motive. Start listening closely to what your
critics are saying. They and their accounts are your institution.
You have to establish a position of Integrity and Responsiveness.
You may not like what you are hearing, but you should not reject it
out of hand. The measure of integrity and responsiveness that counts
is not yours or the boards, it is the member's measure and you will
see it in votes and withdrawals. You are damned lucky that you are
dealing with a set of loud, critical, opinionated people. Learn to
love them. They took the issue to a meeting rather than voting with
their feet. You should really start sweating if they shut up. That
will mean that they will start withdrawing accounts and stopping
automatic deposits.
wally matthews
|
| 1639.206 | | RANGER::CANNOY | True initiation never ends. | Thu Nov 14 1991 19:07 | 3 |
| I hope you mail this by the Post office, too since he is not a DEC
employee and better not have access to this or any conference,
according to DEC P&P.
|
| 1639.207 | Are Members considered Customers ? | PCOJCT::GRAY | | Fri Nov 15 1991 11:08 | 26 |
| I have a plaque on my desk that the BOD *AND* Mr. Cockburn should see.
It reads,
THINK CUSTOMER -- ALWAYS !
Our Customers:
>> Are Our Most Important Asset
>> Are Just Like You And Me --
They Have Feelings Too
>> Deserve Our Attention And Courtesy
>> Do Not Depend On Us --
We Depend On Them
>> Have Needs --
Our Job Is To Satisfy Them
>> Do Interrupt Our Work Day --
They Are Our Work Day
>> Are Our Business.
----------------
|
| 1639.208 | | GUFFAW::GRANSEWICZ | Someday, DCU will be a credit union. | Fri Nov 15 1991 12:00 | 5 |
|
RE: .205
Amen! Please do mail it to him and I would also suggest copying the
Board members because they played a part in too.
|
| 1639.209 | Change this before you send it out... | SCAACT::AINSLEY | Less than 150 kts. is TOO slow | Fri Nov 15 1991 12:05 | 7 |
| >> Do Interrupt Our Work Day --
They Are Our Work Day
Should read
>> Do NOT Interrupt Our Work Day --
They Are Our Work Day
|
| 1639.210 | Will do. | PCOJCT::GRAY | | Fri Nov 15 1991 12:42 | 2 |
| Oops! Don't ya just hate it when ya do that? Thanks.
|
| 1639.211 | | SYSTEM::COCKBURN | Craig Cockburn | Fri Nov 15 1991 14:27 | 12 |
| > <<< Note 1639.207 by PCOJCT::GRAY >>>
> -< Are Members considered Customers ? >-
> I have a plaque on my desk that the BOD *AND* Mr. Cockburn should see.
> It reads,
I am a "Mr Cockburn", are you sure you wanted to show it to me?
Perhaps it would be useful if you said _which_ Mr Cockburn
Craig
|
| 1639.212 | | SQM::MACDONALD | | Fri Nov 15 1991 14:52 | 7 |
|
Has anyone seen the official DCU press release about the meeting?
Seems whoever wrote it was at a different meeting.
Steve
|
| 1639.213 | | MU::PORTER | viewer discretion advised | Fri Nov 15 1991 15:34 | 6 |
| re .-2
Different names. You, I think, know how to pronounce your name
correctly (co-burn?). :-)
At this point I get accused of cultural snobbishness...
|
| 1639.214 | Any other nits ? | PCOJCT::GRAY | | Fri Nov 15 1991 16:24 | 10 |
| I did not have the gentleman's full name available when I entered the
note. I made the fatal mistake of assuming that readers of this note
string would realize that I meant the new DCU president. Afterall,
isn't this string pertaining to the DCU, or havn't you been reading ?
I have seen reference to a phrase, "Your mileage may vary." Perhaps a
derivative might be, "Your attention span may vary." :-)
No offense intended.
|
| 1639.215 | Tongue in cheek, honestly! | TNPUBS::JONG | Steve Jong/T and N Publications | Fri Nov 15 1991 16:41 | 2 |
| If it weren't for those darn depositors, we'd have a pretty good credit
union here!
|
| 1639.216 | Official DCU Press Release | GUFFAW::GRANSEWICZ | Someday, DCU will be a credit union. | Fri Nov 15 1991 16:58 | 43 |
|
[DCU Press Release on official DCU letterhead]
FOR MORE INFORMATION CALL FOR IMMEDIATE RELEASE
MARY MADDEN AT DTN/223-6735 PLEASE POST
508/493-6735, ext. 207 November 13, 1991
DIGITAL EMPLOYEES' FEDERAL CREDIT UNION HOLD SPECIAL MEETING
MAYNARD -- Last night over 1300 Digital Employees' Federal Credit Union
(DCU) members attended a special meeting to consider three important
credit union issues. Members petitioned to rescind recent changes to
DCU's checking account, removal of all Board of Directors and a call
for a special election of all Directors.
The Board and the membership agreed unanimously on rescinding the
proposed checking account changes. Prior to the petition, the Board of
Directors had already reconsidered and rescinded the proposed checking
account changes.
The most serious issue, which called for the removal of all of the
Board of Directors, failed to pass. These Directors, who were elected
by the membership at large, will continue to represent the members of
DCU.
On the final issue, it was voted to call for a special election within
90 days. "While the details of the election have not been finalized,"
stated Mary Madden, DCU Director of Communication, "the Board welcomes
the opportunity to allow DCU's entire 88,000 members to elect a Board
of Directors."
DCU is a full service financial institution servicing Digital Equipment
Corporation employees and their immediate families. DCU has over
88,000 members nationawide with assets of over $375 million. Its
deposits are insured up to $100,000 per account by the National Credit
Union Administration (NCUA), an agency of the federal government.
|
| 1639.217 | | GUFFAW::GRANSEWICZ | Someday, DCU will be a credit union. | Fri Nov 15 1991 17:34 | 44 |
|
> The Board and the membership agreed unanimously on rescinding the
> proposed checking account changes. Prior to the petition, the Board of
> Directors had already reconsidered and rescinded the proposed checking
> account changes.
Only one word will suffice here, lie. This is such an insult to
everybody, especially those who attended the meeting. I guess I must
have imagined 2 Directors get up and speak against this item, one
stating why he thought it was illegal. Before the meeting, they had
delayed them pending Cockburn's "strategic plan". Some of the new
charges and fees have already been implemented.
> The most serious issue, which called for the removal of all of the
> Board of Directors, failed to pass. These Directors, who were elected
> by the membership at large, will continue to represent the members of
> DCU.
Why does that last line bother me so much? No mention of the vote
count either. One would think that a reasonably significant detail.
> On the final issue, it was voted to call for a special election within
> 90 days. "While the details of the election have not been finalized,"
> stated Mary Madden, DCU Director of Communication, "the Board welcomes
> the opportunity to allow DCU's entire 88,000 members to elect a Board
> of Directors."
Sounds good. Have to wait to hear the "details" to see how they
reconcile with the statement above.
> DCU is a full service financial institution servicing Digital Equipment
> Corporation employees and their immediate families. DCU has over
> 88,000 members nationawide with assets of over $375 million. Its
> deposits are insured up to $100,000 per account by the National Credit
> Union Administration (NCUA), an agency of the federal government.
You forgot those all important DCU employees that literally saved your skin
BoD. What gratitude...
I do hope that a second special meeting is not needed. Please tell me
these people should have gotten the message Tuesday. I was hopeful
until reading this press release. Time will tell. Meanwhile I would
suggest keeping your calendars open just in case.
|
| 1639.218 | It should be soon | LJOHUB::SYIEK | | Fri Nov 15 1991 20:18 | 8 |
| re: .150
> BTW, when does Steinkrauss stand for re-election?
Sometime within the next 90 days :-)
(sorry, couldn't resist).
|
| 1639.219 | A nit, but . . . | 16BITS::DELBALSO | I (spade) my (dog face) | Fri Nov 15 1991 21:00 | 22 |
| re: .217, Phil
> > The Board and the membership agreed unanimously on rescinding the
> > proposed checking account changes. Prior to the petition, the Board of
> > Directors had already reconsidered and rescinded the proposed checking
> > account changes.
>
> Only one word will suffice here, lie. This is such an insult to
> everybody, especially those who attended the meeting. I guess I must
> have imagined 2 Directors get up and speak against this item, one
> stating why he thought it was illegal. Before the meeting, they had
> delayed them pending Cockburn's "strategic plan". Some of the new
> charges and fees have already been implemented.
Actually, it's several lies, but who's counting.
It was by no means a unanimous vote. I sat immediately behind the DCU employee
contingent and very clearly observed them opposing this article, as they opposed
the other two as well - to a man. I could not pick out the blue cards of any
board members in that area to judge how they might have voted, but the DCU
employees definitely opposed it.
-Jack
|
| 1639.220 | | FRETZ::HEISER | Hey you're pretty good... NOT! | Fri Nov 15 1991 21:31 | 10 |
| Re: 1600 cards vs. 1300 people
I've heard that late-comers were denied access, could this explain the
discrepancy?
Since I'm 3000 miles away, I couldn't attend. However, I was one of
the "lucky" ones to receive the DCU mail survey from the new CEO. I
made sure my voice was heard there.
Mike
|
| 1639.221 | 2 sets of rules | TOOK::MATTHEWS | | Tue Nov 19 1991 13:23 | 15 |
| I believe there was some hanky panky going on. There was a minor
altercation after the meeting with one of the DCU employee contingent
over how much the special meeting cost. The mother of the "overly"
partisan person, identified them as "not an employee of Digital
or the credit union" but a dependent of a "DCU member" who had
their own account, thus legally able to attend the meeting and
cast a vote.
The last time I checked, my son could not have his own account at
the DCU. Since I am the Digital Employee, I have to be the primary
and he can be a secondary on my account. I guess when you are
scrambling for votes, you can make different rules for the DCU
employees than for Digital employees.
wally
|
| 1639.222 | check it out again | CVG::THOMPSON | Radical Centralist | Tue Nov 19 1991 13:36 | 10 |
| > The last time I checked, my son could not have his own account at
> the DCU. Since I am the Digital Employee, I have to be the primary
> and he can be a secondary on my account.
Check again. If your son is underage this may be the case. Otherwise
not. My wife and mother in law, neither a DEC employee past or present,
have their own accounts. I'm not even joint on my mother in laws. She's
had an account at the DCU for years.
Alfred
|
| 1639.223 | | SSDEVO::EGGERS | Anybody can fly with an engine. | Tue Nov 19 1991 16:31 | 14 |
| Re: .221
How old is your son? From the DCU bylaws:
Section 7. The board may establish by resolution a minimum age,
not greater than 16 years of age, as a qualification for
eligibility to vote at meetings of the members, or to hold
elective or appointive office, or both.
Cost of the special meeting. The DCU BoD said the cost was $35,000.
Considering that a 29 cent letter to each of the 88,000 members comes
to $25,520 in postage alone, I believe the DCU estimate is reasonable.
And that comes to about 40 cents per member. You can decide for
yourself whether that is high or low.
|
| 1639.224 | maybe that is the explanation | TOOK::MATTHEWS | | Tue Nov 19 1991 19:41 | 12 |
| to .222
My son is 20 and was 18 at the time of the refusal. The person
who was identified seem a lot younger than my son but when yo
reach my age everyone looks like they are under age. If it is
a matter of age, then I may be off base.
It would be interesting to check the membership list, especially
the new members over the last month or so and check who joined
just so that they could vote and check for impartial enforcement
of the rules.
wally
|
| 1639.225 | | GUFFAW::GRANSEWICZ | Someday, DCU will be a credit union. | Wed Nov 20 1991 12:30 | 21 |
|
RE: .224
> It would be interesting to check the membership list, especially
> the new members over the last month or so and check who joined
> just so that they could vote and check for impartial enforcement
> of the rules.
Yes, I'm sure it would be interesting...
Excerpt from message from Mark Steinkrauss (DCU Chairman of the Board)
dated Nov. 4, 1991:
"Your spouse and any children who are sixteen or older and members may
vote also. All it take is a $5.00 savings account in their name provided
that had opened the account as of November 1, 1991."
Wonder how many more $5 accounts DCU now has to administer? Not two
months ago they were bemoaning the fact that these types of accounts
were costing them a lot of money.
|
| 1639.226 | | SQM::MACDONALD | | Wed Nov 20 1991 13:01 | 8 |
|
Re: .225
I'm sure whether $5 is a problem depends on whose ox is being
gored.
Steve
|
| 1639.227 | | SSDEVO::EGGERS | Anybody can fly with an engine. | Wed Nov 20 1991 15:54 | 12 |
| Please re-read note .225. The Steinkrauss letter was dated November 4;
the deadline to be a member and vote at the special meeting was
November 1. I haven't seen any real effort to get new members,
children or otherwise, so they could vote at the special meeting.
I suppose there are some cases.
I don't think it is worthwhile to keep rehashing what happened either
before the special meeting or at the special meeting. The real concern
people should have now is to get board members elected who will
represent members' interests and YOUR interests in particular.
Let's quit sweating the trivia.
|
| 1639.228 | one small question | CIMNET::MCCALLION | | Thu Nov 21 1991 14:15 | 2 |
| Can Mr. Steinkrauss be voted out of his position in the DCU in the
coming election?
|
| 1639.229 | | SSDEVO::EGGERS | Anybody can fly with an engine. | Thu Nov 21 1991 15:36 | 2 |
| If enough other people get more votes, yes. Or if the new board
doesn't elect him chairman of the BoD.
|
| 1639.230 | new things to consider | TOOK::MATTHEWS | | Thu Nov 21 1991 15:45 | 85 |
| This conference has gone round and round on the same basic points for
several weeks now. It is time to move to new ground and new points.
Has anyone asked a lawyer about the Bod's fiduciary responsibility and
whether they are personally liable for the unrecovered parts of the
bad loans? I remember from some legal classes that I took as part of
an MBA program that officers and directors of companies had fiduciary
responsibilities that could leave them liable personally for actions
that could not stand up to a "reasonable man" test.
I would be interested in whether directly approving participatory
loans and not providing adequate investigation of facts of the
"investments" that they made for the rest of us might be considered
as violation of their fiduciary responsibility thus making them
personally liable for the losses. I am sure there is some kind of
a liability policy that protects them in such event and that in the
event that they lost a court case of this nature, the policy would
pay up to the maximum amount. I know that many town governments have
such policies to protect their selectmen/selectwomen and many corporations
have such policies to cover their boards and officers.
Secondly, why are they fighting so hard to retain positions that are
honorary. I am sure that their egos have been bruised and they want
to recover the position to prove to themselves that their image is
not "really" tarnished. But their recent actions in my view go further
than this would warrant. They have gone so far in their attitudes and
actions that they are making me ask if there isn't something that they
are not disclosing that they can keep privy only by retaining their
positions as a group. They can't be so blind that they don't see how
badly they have damaged themselves and the DCU by their non objective
positions. They are turning the moderates in the membership into
opponents. I am reminded of the actions of the white house after
Watergate. What can be so important that the Bod would risk the DCU
and their reputations to keep from becoming public knowledge? It
can't be the soundness of the DCU. They are risking that with their
over zealous defense.
Thirdly, how does having an in house auditor who answers to the CEO
protect us from a repeat of the Mangone situation. What employee of
the DCU would dare blow the whistle on his boss. No one thought to
question Mangone, not even the Bod. What will be different in the
future. The current Bod, is very much indebted to Mr. Cockburn for
coming to their defense that they are not likely to support an
internal auditor who is blowing the whistle rather than the CEO
who fought so valiantly to save their reputations. I think that the
best protection is a BOD who is a critical but fair supervisor
for the CEO. I expect the CEO and auditor to keep the rest of the
DCU honest, and the BOD should keep them honest. The current situation
and procedures fail to convince me that the past could not be easily
repeated. I am not questioning anyones honesty. I only want assurances
that are stronger than appeals to honesty and integrity considering
the recent history of the savings and loans industry. All the people
up for trial were above reproach several years ago. We should learn
from history.
Fourth, has anyone outside of the BOD and CEO seen the results of the
investigation that is so loudly touted by the BOD as exonerating them
of any wrong doing? Considering the tone of public statements in
the annual reports and public statements of the DCU in general of late
vs. the facts that are coming out in various auditor's notes etc.,
I would be more comfortable if someone not associated with the DCU and
BOD could report on what the investigation turned up including any
Notes or extenuating facts that may be left out of the public statements.
Fifth, Who is working on a new set of bylaws that restrict the DCU from
making "investments" in other financial institutions, buying "high
yeild" bonds, or other speculative ventures? It would seem that this
would be an additional way to avoid a repeat of the "Mangone Affair".
Sixth, DCU now I believe is holding some "land" recovered from defaulted
loans. How long before that land has to be sold? I believe there are
some regulations on how long that land can be sold. I would be very
interested in attending the auction that sells that land to see just
how much the DCU is recovering and who is buying the land. This is an
occasion to watch. The land has been written down now and has no "known"
value. Someone who has an inside track and understands "Cape" land values
can scoop this up just before an upturn and make a handsome profit. Of
course the DCU wants to achieve the best possible results for the membership
but their hands may be tied by the regulations.
All of the above questions are speculative in nature. However, I think
the membership should be paying more attention to items such as these
rather than going over the same ground repeatedly.
wally
|
| 1639.231 | | WLDBIL::KILGORE | | Thu Nov 21 1991 16:36 | 10 |
|
re: .230:
You raise excellent, forward-looking questions. I don't know about
#6, but I'm absolutely convinced that the only way to answer 1-5 is
to vote into place a new Board of Directors that will let the sun shine
into DCU. Some people are coming around to focus their energy away from
the Special Meeting, and forward toward the Special Election. See
BEIRUT::DCU for more details.
|
| 1639.232 | | AMAMA::PETERM | | Thu Nov 21 1991 17:10 | 30 |
| re .230 #5 - What are the results from the highly touted external
auditors? Well the NCUA audit and investigation that the BoD has
claimed completely exonerates them of any wrongdoing seems to have been
more wishful than real. The NCUA lawyer who is assigned to watch DCU
catagorically denies that any such investigation ever took place. This
according to a quote in the Middlesex Times. This one was _my_ last
straw about _any_ member of the BoD. There are only two conclusions that
I can come to:
a) That the BoD was not smart enough to ask the NCUA themselves
(all it took was one phone call)
or
b) That the BoD was conciously LYING.
Either way, they are obviously not capable at taking care of my life's
savings. I won't open the Digital Honesty Policy rathole any more than
I just did.
Re: the fiduciary responsibility
The supervisory commitee that is supposed to look over the shoulder
of the BoD has not met in YEARS. It seems to me that it was the BoD's
responsibility to make sure that this check and balance was in place
and operating. I'd call it a pretty good case.
- peter
|
| 1639.233 | | GUFFAW::GRANSEWICZ | Someday, DCU will be a credit union. | Thu Nov 21 1991 18:37 | 20 |
|
RE: .230
The DCU Board of Directors has a $3 million bonding (total). We have
asked for more information concerning this bonding and have been denied
any other information due to lack of a "business reason". To expect
the current BoD to pursue this possible avenue of recovery is
unrealistic. If they did, and collected, then they have just built a
case for removing them from the Board.
Considering DCU's (our) substantial losses in this episode, to ignore the
possibility of recouping $3 million is not in the membership's best
interest. If a new Board is elected, this should be #1 on the to-do
list. It will also serve to clear the air concerning members doubts
and suspicions on the Boards involvement. I know if I was serving on
the Board, I would have resigned immediately and called for a thorough,
independent investigation and published the results. IMO, until that
happens, this BoD has zero credibility and does not warrant the trust
of the membership. But that's just my opinion. Some people require
much less before they trust people with their lifes savings.
|
| 1639.234 | Will this suffice? | TLE::AMARTIN | Alan H. Martin | Fri Nov 22 1991 16:14 | 8 |
| Re .224-.227:
I know of a 10+ year Digital employee who joined DCU at 2:00 PM on 18-Oct-91
with an initial deposit of $5.00. They were permitted in to the ballroom to
vote because their name was on the LPT listing of 1-Nov-91 DCU members.
Any more questions?
/AHM
|
| 1639.235 | | TOMK::KRUPINSKI | Congressional Slave | Tue Feb 04 1992 01:57 | 14 |
| It appears that the esteemed DCU BoD knows how to "Do the right
thing". In this case, "right" meaning *right* *after* the meeting
that was the subject of .0, the DCU BoD voted to keep this sort of
thing from happening again. Can't be bothered with pesky *owners*
can we...
Prospective future witch-hunters will now need 5000(!) signatures
to call a special meeting. Just another example of the BoD's
commitment to open communications...
The gory details are in BEIRUT::DCU, 375.1.
Tom_K
|
| 1639.236 | | PATS::DWESSELS | | Tue Feb 04 1992 09:50 | 6 |
| I "voted" with my feet... I found a VISA line through another bank (DCU
doesn't fit my definition of a credit union, ie an advocate for the
members) and terminated my membership... maybe this is the only thing
the BoD will "hear" in the long run.
/dlw
|
| 1639.237 | | ICS::CROUCH | Jim Crouch 223-1372 | Tue Feb 04 1992 10:11 | 7 |
| re: .236
Good move, I don't belong to the credit Union but if i did I
would have walked a long time ago.
Jim C.
|
| 1639.238 | Joint accounts can't vote? | SOLVIT::BUCZYNSKI | | Tue Feb 04 1992 13:28 | 4 |
| I just heard of a new twist. Members that are under a joint account
are not considered voting members??!!??!?!?!?!?
I didn't believe that balony!? Looks to be true!
|
| 1639.239 | | CVG::THOMPSON | Radical Centralist | Tue Feb 04 1992 13:51 | 8 |
| > I just heard of a new twist. Members that are under a joint account
> are not considered voting members??!!??!?!?!?!?
True. There is one vote per account. While my wife and I are joint
on each others account we do have two seperate accounts. Thus we
each do get a vote. This is not new. It is a day one situation.
Alfred
|
| 1639.240 | _someone_ is on the ball | GLDOA::REITER | Plagiarism is not _my_ idea! | Tue Feb 04 1992 15:15 | 9 |
| re: .235
I guess this will make it more difficult for "future witch-hunters"
(his choice of words) to waste another $35K of credit union funds
on these adventures.
Gosh. What a shame. ;7)
\Gary
|
| 1639.241 | | KOBAL::DICKSON | | Tue Feb 04 1992 16:53 | 2 |
| How many signatures does it take to force a meeting of the stockholders
of a commercial bank?
|
| 1639.242 | | MLTVAX::KRUPINSKI | Congressional Slave | Tue Feb 04 1992 20:19 | 21 |
| re .236, .237:
The DCU is a Digital benefit. It's part of your compensation,
and mine. By walking away, you've thrown away part of your
pay. I work too hard to throw mine away.
re .240:
Truth be told, the term "witch hunt" originally
came from the DCU BoD (have to give credit where it is due)
In my opinion, it was $35,000 of the best spent money in recent DCU
history, and to call it an "adventure" shows you are missing the
point.
re .241:
The question is irrelevant, DCU isn't (or at least shouldn't be) a
commercial bank.
Tom_K
|
| 1639.243 | | DATABS::HETRICK | George C. Hetrick | Tue Feb 04 1992 20:26 | 10 |
| > The DCU is a Digital benefit. It's part of your compensation,
> and mine. By walking away, you've thrown away part of your
> pay. I work too hard to throw mine away.
DEC pays maternity benefits, too, but that hardly means I feel a necessity
to go and impregnate someone :-).
I honestly don't have much hope for a better, gentler, DCU -- I've moved
my savings and checking to another bank (and am getting a significantly better
rate!), and expect to move my credit card and IRA sometime this year.
|
| 1639.244 | | COMET::PERCIVAL | I'm the NRA, USPSA/IPSC, NROI-RO | Tue Feb 04 1992 20:47 | 16 |
| <<< Note 1639.242 by MLTVAX::KRUPINSKI "Congressional Slave" >>>
> The DCU is a Digital benefit. It's part of your compensation,
> and mine. By walking away, you've thrown away part of your
> pay. I work too hard to throw mine away.
Tom, I disagree. DEC and DCU are seperate entities. It "may" be
beneficial to have a DCU account, but only because having a
"bank" where you work is simpler.
I too have, for all intents and purposes, taken my business
elsewhere. Since I get the same service from my new bank
at a lower overall cost I am actually SAVING more of my pay
than when I did business with the DCU.
Jim
|
| 1639.245 | | 25038::DWESSELS | | Tue Feb 04 1992 23:15 | 6 |
| re .242
I think DCU was the real beneficiary in the DEC employees/DCU situation
- they had a semi-captive audience - now we're learning to shop again
for the best deal instead of taking it for granted that DCU is a
benefit to us. I'm saving money by walking away from DCU...
|
| 1639.246 | | KOBAL::DICKSON | | Wed Feb 05 1992 16:54 | 1 |
| What kind of savings are we talking about here?
|
| 1639.247 | | WLDBIL::KILGORE | DCU Elections -- Vote for a change... | Thu Feb 06 1992 12:11 | 20 |
|
re .240:
Yes, someone was on the ball when they made it 25 times harder for
DCU members to exercise their right to call a special meeting; but you
have to wonder whose interests they had in mind.
If an open, more honest DCU had existed in 1986, where people weren't
able to let a rogue president run unchecked, where highly speculative
commercial loans to nonmembers could not be hidden under "investments",
where increased fees to cover losses from those loans could not be
insultingly passed off as "More Choices!", where a small group of
alleged "representatives" could not change the bylaws at whim and without
notice to further disenfranchise their constituents, then DCU members
could quite possibly have been $18 million richer today.
An open, more honest DCU is the point of the upcoming election.
In that light, $35,000 might be considered money well spent.
|
| 1639.248 | NOT AN ELECTION! TRY APPOINTMENT! | IRONIC::PETER | Tricky Woo's gone Flopbot again? | Thu Feb 06 1992 17:02 | 15 |
| >> An open, more honest DCU is the point of the upcoming election.
uh? Excuse me? There is no upcoming election. There is an upcoming
appointment. There are 7 slots to be filled and only nine people running
(two of which are incumbents(sp?) so there are actually only 7 people running
for 7 positions.).
George Bush should have it so easy.
A banker friend of mine (whose wife works for DIGITAL) wants to be placed on
the ballot. He set up an appointment and went on an interview and is not
being allowed on the ballot. Apparently diversity and financial experience
are not wanted by this credit union.
Peter
|
| 1639.249 | | TOMK::KRUPINSKI | Congressional Slave | Thu Feb 06 1992 18:23 | 39 |
| > Apparently diversity and financial experience
> are not wanted by this credit union.
Oh, the credit union wants diversity and financial experience,
but the folks who are currently running the credit union
are apparently out of touch with the membership, it is they
who seem to not want diversity. Hopefully, this will change,
here's why:
Following the report that only 9 people had been nominated
by the DCU nominating committee, a network of volunteers
formed to assist those candidates who still wanted to be
placed on the ballot. We could get a candidate on the ballot by
submitting to the DCU a petition containing the 500 signatures
of DCU members for that candidate. The volunteer network
endeavored to assist candidates in obtaining those 500 signatures.
The good news is that I believe the effort will be successful.
There is an excellent chance that you will see at least 7, possibly
up to 11 additional candidates who will be on the ballot by petition.
The bad news is that the major part of the signature collection
effort is over. I wish your banker friend had known about the effort,
and contacted us, there is a good chance we could have gotten him on
the ballot.
We did try to publicize the effort, but our resources are limited, and
it *is* a volunteer effort. For example, asked the DCU nominating
committee to forward a letter to each candidate, which told about our
effort, and how to get us the information we needed to obtain
signatures on their behalf. But the nominating committee refused to
forward the letters, and that severely restricted our ability to
contact potential candidates.
Perhaps enough of these petition candidates will be elected
so that next year's nominating committee will be comprised
of folks who are a little more broad-minded.
Tom_K
|
| 1639.250 | | TOMK::KRUPINSKI | Congressional Slave | Thu Feb 06 1992 19:50 | 18 |
| George,
I know what you mean, but I think it is more analogous to say that
DEC pays maternity benefits, but I shouldn't allow a small group
of folks to jack up the price of delivery at the most convenient
hospital, as long as I am a stockholder of that hospital.
Jim, George, DWESSELS,
I've also moved money from DCU, consistent with what is in the
best financial interest of Tom Krupinski. But I've left $5.00
(actually more...) and been active in the reform campaign.
Leaving $5.00 in the DCU and taking a few minutes to vote in
the upcoming election is a small investment to make for the
return of reclaiming a valuable benefit. It's folks who won't
do that small amount that I refer to when I say, "walk away..."
Tom_K
|
| 1639.251 | Strength in numbers | SMAUG::GARROD | An Englishman's mind works best when it is almost too late | Thu Feb 06 1992 21:33 | 22 |
| Regarding the person that said there will be only 9 people on the DCU
ballot.
I can assure that that will not be the case. The petition signature
drive has been a rousing success. There are many candidates who now
have well over 500 signatures gathered for them. They now also have the
option of appearing on the ballot.
Stay tuned for further details. The fight to reform the DCU from the
top down and get it to actually have a board that truly represents the
wishes of the majority of the membership is only just beginning. You
haven't see anything yet. The special meeting and the petition drive were
just the opening shots.
Regarding the board appointment committee (sorry I should have said
nominating committee) I have nothing but contempt for them and the
process they followed. 9 people for 7 slots (2 of which were incumbents)
does not a choice make. As those of you who saw the petition gathering
tables know the slogan on them was a "More Choices" logo with the "More"
crossed out and "Real" substituted.
Dave
|
| 1639.252 | thanx | MRKTNG::SILVERBERG | Mark Silverberg DTN 264-2269 TTB1-5/B3 | Fri Feb 07 1992 10:13 | 7 |
| Just a note of thanks to the volunteers who did the cafeteria route
with the petition signature papers. Here in TTB, I had the opportunity
to support a few folks I know and believe would do an outstanding job
for us members.
Mark
|
| 1639.253 | | SQM::MACDONALD | | Fri Feb 07 1992 11:14 | 15 |
|
Re: the election.
Can the list of names of petitioners who make it onto the ballet
be posted before the election in case when ballots arrive by mail
that it doesn't distinguish between them. My impression is that the
seven who aren't incumbents may as well be because I suspect they
were carefully chosen to ensure continuation of the current board's
policies. I intend to vote only for candidates who appear on the
ballot by petition. That may not be logical, but it's a safe bet
that those among that group have interests in the DCU more closely
matched to mine.
Steve
|
| 1639.254 | Permission and indirection | TLE::AMARTIN | Alan H. Martin | Fri Feb 07 1992 12:56 | 13 |
| Re .253:
Wait until the DCU issues an official listing of the successful petition
candidates in BEIRUT::DCU (q.v.) (which should contain permission to copy) and
then copy or reference the crucial facts here.
Note that you're effectively concerned about whether John Sims will object to
dissemination of information which originates under the direction of Mark
Steinkrauss, and which will presumably appear in the lobby of many Digital
facilities on Live Wire. One would like to think the heads of Investor
Relations and Strategic Resources can come to mutual agreement on this issue
sometime before the names are counted.
/AHM
|
| 1639.255 | | TOMK::KRUPINSKI | DCU Election: Vote for REAL Choices | Tue Mar 10 1992 19:34 | 25 |
| Following, is, as best as I can determine, a listing of all of the
candidates:
Nominated by Comments
Charles Boutcher Membership Petition Independent candidate
Tanya Dawkins Membership Petition "Real Choices" candidate
Christopher Gillett Membership Petition "Real Choices" candidate
Deepak Goyal DCU Nominating Committee
Phil Gransewicz Membership Petition "Real Choices" candidate
Abhijit Gupta Membership Petition "Real Choices" candidate
Gim Hom Membership Petition "Real Choices" candidate
Paul Kinzelman Membership Petition "Real Choices" candidate
Richard Luciano Membership Petition "Real Choices" candidate
Gail Mann DCU Nominating Committee
Tom McEachin DCU Nominating Committee
Paul Milbury DCU Nominating Committee
Claire Muhm DCU Nominating Committee
Lisa Demauro Ross Membership Petition "Real Choices" candidate
Rick Sample DCU Nominating Committee
Ray Schmalz DCU Nominating Committee
Susan Shapiro DCU Nominating Committee Incumbent
Alfred Thompson Membership Petition "Real Choices" candidate
Jay Tredwell Membership Petition Independent candidate
Abbott Weiss DCU Nominating Committee Incumbent
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| 1639.256 | A new promo organization? | CNTROL::MCKEON | I'm no angel~ | Wed Mar 11 1992 10:34 | 4 |
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What's a "Real Choices" candidate?
Dan
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| 1639.257 | | WLDBIL::KILGORE | DCU -- vote for REAL CHOICES | Wed Mar 11 1992 11:56 | 6 |
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Re .256: See note 1790
"REAL CHOICES" candidates are loosely united under a number of
member-advocate committments listed in that note.
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