Former NJ League CEO Shaughnessy Being Investigated for Potential Embezzlement from League

HIGHTSTOWN, N.J. – Seven months after it fired Tom Shaughnessy as its president/CEO for undisclosed reasons, the New Jersey Credit Union League is dealing with an investigation of its former leader for possible embezzlement. An official from the Mercer County prosecutor’s office confirmed the former League president/CEO is being investigated for possible embezzlement of $125,000 from the League coffers. When asked to confirm whether Shaughnessy was being investigated for the possible theft and if the League had filed a claim with its insurer CUNA Mutual Group for the loss, NJCUL Sharon Dilling, director of communications said the League had issued the following statement: “By a unanimous decision of the New Jersey Credit Union League Board of Directors, a voluntary group of 15 representatives from credit unions across the state, Thomas Shaughnessy was terminated on October 25, 2004 from his position as President/CEO of the Central New Jersey-based nonprofit. The New Jersey Credit Union League has undergone an independent audit, and has subsequently filed a bond claim with its insurance company. We are unable to provide any additional information at this time.” As if that wasn’t enough, an article in the May 13th edition of The Trenton Times stated that Shaughnessy has filed a lawsuit in Superior Court in Monmouth County claiming the League and board should have paid him a severance package when he was fired. In his lawsuit Shaughnessy further contends that the League’s board “have defamed him by allegedly making false statements with “reckless disregard of the truth” and “have damaged his ability to find a new job.” The Mercer County prosecutor’s office said Shaughnessy has not been arrested or charged with any crime yet. Shaughnessy could not be reached for comment about the investigation or allegations. Shaughnessy was appointed president of the League in April 2003 after serving for two months as interim president when the NJCUL Board decided not to renew the contract of its then-president/CEO Russell Clark. Shaughnessy worked as Chief Operating officer under Clark. Shaughnessy was terminated as League president in October 2004. At the time, League Chairman John DiNofrio, treasurer, FAA Technical Center FCU, Northfield, N.J. notified affiliated-CUs of Shaughnessy’s termination by sending each a letter, preceeded by a fax, that stated the board’s action “was a difficult decision and it was not made easily, nor was it made in haste. After lengthy and thoughtful discussions, the board came to the only solution that we could.” Shaughnessy was in Hawaii at the time attending CUNA’s Future Forum when he learned of the board’s decision. League Vice President Mary Lee Kleinkauf has served as Acting President/CEO since Shaughnessy’s termination, and while she’s stated she’s not interested in the permanent spot, credit unions that Credit Union Times spoke with expressed confidence in her “professionalism” and said she’s “extremely competent and doing an outstanding job.” For that reason, say the credit unions, they’re not too concerned the League missed its target date of the end of April to find a new president. In January, NJCUL selected HRValue Group to conduct a national search for the organization’s new leader. “The League board has the responsibility to find the right person for president, and I trust the board is doing whatever is necessary to do their job,” said Robert Anderson, president/CEO, Pinnacle FCU in Edison. “I expect them to take all the time they need to find the right person. I wouldn’t want them to rush things just because they set an April date.” Anderson also isn’t concerned the League hasn’t been forthcoming with information concerning the circumstances surrounding Shaughnessy’s termination, saying, “When you terminate someone you have to be particularly careful what you put out because of liability.” But Anderson wasn’t as forgiving about the news concerning Shaughnessy being investigated for possible theft, although he said his feeling had nothing to do with the League. “My reaction to the news about Shaughnessy is natural, I’m shocked and disappointed,” he said. Tom Buker, president/CEO, Postal Employees CU of Trenton agreed with Anderson that “finding the right person for the president’s spot isn’t something you want to rush. I know the acting president is a very capable person and is a quality executive.” Buker said he was confident “the board acted properly” when it terminated Shaughnessy and stressed its decision “is no reflection on the League nor its board.” Mark Vogel, president/CEO, Rutgers FCU, New Brunswick said he wasn’t too familiar with the details concerning the Shaughnessy investigation and added that “it’s very unfortunate” if the allegations are true. As for the League’s search for finding a new president, Vogel agreed with the other New Jersey credit union presidents’ assessments. “They’re taking a careful and deliberate approach,” he said. He hopes that whoever is hired to sit in the corner office continues to address the issues covered in the state’s recently enacted credit union modernization act, as well as the banker and taxation issues. Vogel opined it’s less important for the new president to have credit union experience – “they can learn the industry” – and prefers they have experience and understand what it takes to run an association. While he’s disappointed Kleinkauf doesn’t want the permanent position – “she’s a super person” – he understands her not throwing her name in the hat for the spot. “Being League president is a very difficult and demanding job,” he said. -