UTCU Still Under Conservator's Authority

ROCKY RIVER, Ohio-It is premature to say when United Telephone Credit Union will be returned to its membership or merged with another credit union, the Ohio Department of Commerce’s Division of Financial Institutions spokesman Dennis Ginty said. American Share Insurance was appointed the conservator of the credit union in February following the discovery of inappropriate activities by the former management team. The Division of Financial Institutions uncovered last year that the credit union’s 1978 investment in shares of Fahey Banking Company in Marion were sold to a director of the credit union for $220,475-nearly $2 million less than its recently appraised value. Fahey Bank is operated by former United Telephone CEO Martin Hughes’ wife’s family. Hughes, his wife, and another relative also served on the former five-member board of the credit union. Other problems at the credit union included expense reimbursement, check writing, loan policies and other matters which had not been corrected. Hughes had been involved in previous legal entanglements, including a 1987 conviction for falsifying Communications Workers of America’s logs to permit the union to make political contributions far exceeding the legal limits. As a demonstration of his strong political ties, Hughes was among those pardoned in the wave at the end of President Bill Clinton’s administration. United Telephone has approximately 5,800 members and $15 million in assets. -