Former Fresno County FCU CEO said he was fired by the board for pointing out a board violation

FRESNO, Calif. - Rick Leas, former president/CEO of Fresno County FCU here, has filed a wrongful termination lawsuit against the CU's board of directors that alleges the board fired him for blowing the whistle on a board violation of NCUA rules. Leas said despite advising the board that they could not receive the cash equivalent of unused director health benefits, the board voted to begin paying directors for unused health benefits. "We showed them copies of the regulation that prohibited board compensation. Their logic was that since federal credit unions are permitted to provide health insurance to the board, if they aren't using that insurance, they can get the cash equivalent," said Leas. Leas said he was able to convince the supervisory committee to have outside auditors review the board's policy of receiving cash in lieu of health benefits. The board brought in O'Rourke, Sacher & Moulton, which queried NCUA on the issue. In November of 1999 NCUA Associate General Counsel Sheila Albin issued a legal opinion to O'Rourke that essentially said a FCU cannot provide cash compensation for an unused director benefit. "... if an official declines this benefit because such official has health insurance without out-of-pocket expenses, the official may not receive compensation for the benefit's value," stated Albin. Leas said the board had been receiving cash compensation for the benefits for a few months while the auditors were waiting word from NCUA. In his lawsuit, Leas claims that once the board received notice from NCUA that they were in violation of Federal Credit Union regulations the board conducted their first and only review of his performance. One part of the board's review stated that Leas was "moving the credit union forward; credit union is operationally sound; new programs are being developed; assembled a good management team; has a strong commitment to credit union principles; is an advocate for improving the credit union; and is self-confident and enthusiastic on task performance." However the review then went on to state that Leas "lacks acceptance of board's position/role; does not take board's direction well when he is not in agreement; and has not learned how to work or read this board." "I think what they're saying is that they just wanted someone who would agree with them on everything. It would have been impossible to try and satisfy them," said Leas. Leas said he regrets not doing his homework on the board prior to accepting the position because it wasn't until later that he found out that two of the directors were being considered for the CEO position. Leas was hired by the board in March 1998. Prior to that he served as CEO of Stanislaus County FCU for eight years. Leas said he was attracted to the Fresno job because he and his wife grew up there. Leas said under his watch the credit union went from a Camel 3 to a Camel 1; introduced a Visa check card, a Visa platinum card, and a new phone service. He said that assets increased from $153 million to $175 million; loans increased from $82 million to $101 million; and deposits grew from $136 million to $154 million. While the board declined to comment on the lawsuit at this time, a high-ranking member of management said there is another side to this story and that the lawsuit paints the board in an unfair light. The source was unable to get attorney approval to go on record with Credit Union Times. The source said the board is anxious to tell their side of the story after their counsel reviews the lawsuit. "This suit was just filed on June 1. Frankly, we haven't had the time to respond and talk to everyone we need to. We're in the very early stages, but plan to respond soon," said David Petrie, the lawyer representing the credit union. Leas claims he was not given two weeks notice or any type of severance package, and was only paid up until his last day on the job. -pgentile@cutimes.com