Columbia Fight Over Looming Board Vote Just Gets Uglier; CU Calls the Cops, Members Go Back to Court
VANCOUVER, Wash. - The dispute between the board of the $619 million Columbia Credit Union and some of its members got steadily uglier last week as the credit union tried to have some members arrested and the members went back to court to try to get five board members thrown...
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VANCOUVER, Wash. – The dispute between the board of the $619 million Columbia Credit Union and some of its members got steadily uglier last week as the credit union tried to have some members arrested and the members went back to court to try to get five board members thrown out of their seats. Part of the fight’s most recent phase centered on whether or not Save CCU, the organization of members seeking to oust eight board members at a special meeting on March 28, will be allowed to leaflet and campaign in favor of the recall at Columbia branches. The other part of the fight centered on Save CCU’s allegations that five of the board’s members are seated there in violation of the credit union’s bylaws and that the credit union board is violating its fiduciary responsibility by spending Columbia’s money on trying to retain their seats. The March 28 meeting is scheduled for 3:00 p.m. at the Hudson Bay High School gym, a facility which should hold about 4,000 members. Save CCU said the credit union laid the groundwork for the campaigning fight when it refused its request to send information about both retaining and removing the eight board members with the ballot. Ballots already mailed to members contain only a letter from the board explaining the procedure and the ballot itself, a card which lists the eight members by name with ovals next to them indicating whether the board member should be retained or removed. “The credit union has already spent thousands of dollars on advertisements in the local media supporting the board,” said Steve Straub, a key organizer of Save CCU and a former CEO of the credit union. “We felt credit union members should have had information from both sides with them when they filled out their ballots,” he added. On March 11, Columbia and the Washington State Department of Financial Institutions signed an agreement in which DFI promised not to oppose the credit union’s policy of preventing Save CCU from campaigning in front of its branches as long as the credit union did not campaign in mailings to members. According to the letter, DFI expected that Columbia will allow Save CCU equal access to Columbia members. If the credit union does not, and if it campaigns in favor of retaining the eight board members, DFI will take steps to require the credit union to allow Save CCU to conduct informational pickets at its branches, the agreement held. “What we really wanted to do was to try to ensure an equal playing field,” said Scott Kinney, DFI’s director of communications. But Cathryn Chudy, another organizer with Save CCU, said the agreement attempted to lock Columbia’s advantage into place. “They are the ones who have been spending money like water,” Chudy said. “Of course they want to cut off the campaigning when they are ahead.” The conflict over campaigning came to a head on March 13, a Saturday, when Columbia management at The Heights branch called the Vancouver police to arrest Save CCU members who were campaigning in front of the branch. According to Chudy and other Save CCU supporters, at one point as many as five Vancouver police cruisers were on the scene at the branch but the police determined that none of the members had broken any law and declined to arrest anyone. Columbia did not comment on the incident at the branch, but in a statement on its Web site said that the credit union and DFI had “agreed that for the privacy, security and safety of our members and our employees, board election campaigning is prohibited at credit union facilities. Our board is committed to upholding the policy. However, a group of campaigners attempting to takeover your credit union ignored the policy and have aggressively campaigned at Columbia branches.” But the actual letter signed by the DFI said nothing about “privacy, security and safety” of Columbia members, Save CCU noted. SAVE CCU’s Move Save CCU, in turn, took the credit union to court to allege that five of the credit union’s board members are seated on the board in violation of the credit union’s bylaws. In papers filed on March 16, the group pointed to an amendment in the credit union’s bylaws that limited directors to three consecutive three-year terms. The board passed the amendment in 1999 and Save CCU maintained that, under its provisions, five of the credit union’s board members are in violation of the credit union’s bylaws. Columbia has yet to release a statement about the suit. Steve Straub, former CEO of Columbia and a key organizer of Save CCU, said the bylaws do not contain any language absolving the board that passed the amendment from its provisions. The lawsuit also seeks to prevent the board from spending credit union money on campaigning to retain their positions, noting that the board members sit in a fiduciary capacity with the credit union and “may not use their director positions to further their personal advantage and privilege.” Save CCU also alleged in its case that there is no law in Washington State allowing a state chartered credit union to become a state chartered mutual bank. “Washington state law has long allowed a state chartered credit union to switch to a federal mutual bank charter,” said Doug Schafer, Save CCU’s lawyer, “but there is no clearly enabling statute for a state chartered credit union to become a state chartered mutual bank,” he said. Meanwhile the two organizations continued to snipe at each other in advertisements in the local media and on the Internet. For example, a Web site without a clearly identified author or backer mysteriously appeared on March 16 to defend the board. The site claims not to have been endorsed or funded by the credit union but contains no names, email addresses, or phone numbers for its authors or backers. The site was set up through a private firm in San Francisco on March 15. The firm serves as a shield for those who want to establish web sites without revealing their identities or any affiliations they might have. The site (retainourboard.org) urges members to vote for the board in the recall election, presents information in favor of credit union conversions, appears to duplicate the information on board members that Columbia has on its site and presents information on leaders of Save CCU. But Chudy said the site seeks to defend the board members from recall by smearing members who favor the board members’ ouster. “It takes things from their lives and presents them either inaccurately or without their broader context,” said Chudy. “It indicates that the credit union board is willing to play hardball. But we had anticipated things taking this turn and we are not going to back down.” Chudy noted that the site points to a recent article in The Columbian, a local paper, which reported that Straub had lost a suit with the credit union in the wake of his firing as Columbia’s CEO in 1992. But the site fails to point out that the paper has issued a correction to its reporting, since Straub did not lose the suit. “It was settled out of court,” Chudy said. “There were no winners or losers.” -
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