State Employees Credit Union President/CEO Jim Blaine said he disagrees with the NCUA Office of Inspector General, who said in an investigation report released Tuesday that Jerrie Jay, administrator of the North Carolina Credit Union Division, leaked confidential NCUA documents to SECU officials.
The OIG did not investigate whether Jay leaked the documents, but rather, whether Herb Yolles, NCUA Region III Director, made a false statement when he accused Jay of leaking the documents in a July 2010 letter to her.
Blaine said whether or not Yolles lied is not the issue. Instead, he said he’s concerned the NCUA is “trying to trash Ms. Jay and go after state-chartered credit unions,” and added “the word ‘leak’ is very aggressive.”
The OIG’s investigation revealed that on June 16, 2010, NCUA Principal Examiner Matthew Nixon emailed copies of a draft document of resolution relating to an SECU exam to Kellie Daniel, senior examiner at the NCCUD. Daniel then forwarded the email to Jay, who forwarded it to Mike Lord, SECU senior vice president of finance, according to the OIG report.
Nixon and Daniel’s names were redacted in the OIG’s report, but the information was revealed when the Credit Union Times copied and pasted text from the released PDF document to a Word file.
On July 28, 2010, Yolles, NCUA Region II Associate Regional Director David Hibshman, Jay and Blaine were meeting in Jay’s office to discuss the exam findings, the OIG report said. During that meeting, Yolles said he “noticed that Blaine was reading from an early draft of a DOR” and both Yolles and Hibshman told Jay it was inappropriate for Blaine to have a copy of the document.
Blaine does not dispute the email trail or the fact that he had a copy of the report. However, he said Nixon provided his audit staff with a copy of the report while on site at the $24 billion credit union June 16, and that is how he came into possession of it.
The OIG’s report confirms this fact, saying that Nixon said he also routed the document to Lord.
Furthermore, Blaine said “it’s typical, in every exam” for the NCUA to provide draft DORs to credit unions.
The OIG’s report concluded that because Jay emailed the report to Lord, evidence does not support a finding that Yolles’ statement was false.
The report also addressed whether or not the document Blaine had was the copy provided by Nixon to SECU, or the copy emailed from Jay, which contained identical information but had different formatting.
On March 20, Yolles told the investigator he was “50/50 certain that Blaine was reading from the DOR” forwarded by Jay, the report said. The investigator told Yolles that an identical document was given to SECU by Nixon, and he then asked Yolles if it was possible Blaine was reading from that document, rather than the one routed through Jay.
“Yolles stated he was still pretty certain Blaine was reading from the draft DOR,” the report stated. “Yolles explained further that based on an inquiry his office conducted, he concluded that no one at NCUA provided the draft DOR to SECU; rather, the only way SECU could have obtained it would have been from someone at the NCCUD.”
Later, on April 10, the investigator re-interviewed Yolles at his request. In that interview, Yolles said after rethinking his earlier statements, “he was now 100% positive that Blaine had the draft DOR in his possession” at the July meeting.
When asked why he changed his statement, the report said Yolles said he had originally answered to “err on the side of caution.” However, after reconsidering, he now had no doubt Blaine possessed the draft DOR that was routed through Jay.