Court Overturns Patelco Director's Ouster at Election

The director of a management-abuse probe at Patelco Credit Union received a last-minute reprieve Nov. 22 when a California judge overturned an election that would have ousted him.

Ruling for the San Francisco County Superior Court, Judge Stuart R. Pollak said the credit union failed to provide members adequate information for its Nov. 13 supervisory committee election.

In the vote, which was decided by special proxies, supervisory committee chairman Miles Mochizuki and another panel member were tossed out of office.

For nearly a year the supervisory committee has been investigating charges of management abuses levied at management and directors. Lawyers representing the panel charged that Patelco leaders were trying to derail the probe.

But Patelco doesn't plan on giving up.

"They believe the election is valid and they're going to appeal the ruling," said Sharon Chapo, president of San Diego-based Chapo Marketing, a firm that represents $1.1 billion-asset Patelco.

Patelco members submitted 8,778 special proxies, of which 947 were to be used at the board's discretion. A majority of members voted out Mr. Mochizuki, but the board used the discretionary proxies to oust another panel membner.

Representing the panel, lawyers from the San Francisco firm Sheppard, Mullen, Richter & Hampton argued that the board had poisoned the atmosphere earlier by sending the members tracts that denounced the investigation.

Further, they argued that Patelco demonstrated bad faith by attempting to hold an illegal election earlier in the year that was stopped by the Department of Corporations.

The two sides also argued over technicalities concerning the proxies.

Lawyers from Pilsbury Madison & Sutro, representing Patelco, argued that the committee members had agreed to the terms of the election.

In the panel's view, "the only fair election is one they win," said a Nov. 16 brief filed by Patelco.

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