ODESSA, Texas - A member of First Basin Credit Union is alleging numerous improprieties with the election of board members at the CU’s annual meeting in April.
Karen Howard-Winters joined First Basin CU in 2000. Following the April 15 meeting, during which three incumbent board members–including credit union president and CEO Shem Culpepper–were re-elected, Howard-Winters outlined her objections in a letter to Harold Feeney, commissioner of the Texas CU Department in Austin. Copies of the five-page letter, which was obtained by Credit Union Journal, were sent to Texas Gov. Rick Perry, three Texas State Representatives, one Texas State Senator, two U.S. Senators, two U.S. Representatives, NCUA and CUNA, and other groups.
In her letter, Howard-Winters said members of the CU, as well as members of SaveFirstBasin, a group that opposed a failed attempt by credit union leaders to convert it to a mutual savings bank charter earlier this year, requested a representative of the Texas CU Department attend the April 15 meeting to observe the proceedings. The request was denied by Commissioner Feeney.
For Howard-Winters, the problems with the meeting began with the fact it was delayed 30 days from its originally scheduled date. Then, she said, the postcard invitation did not give notice that three seats on the board of directors would be contested, nor did it provide the names of the directors up for re-election.
“It is my opinion that this omission of this critical information was intentionally withheld from all FB Members in order to assure the current directors would keep their seats by ‘stacking the deck’ with votes from employees, employee spouses and other employee friends and family members,” Howard-Winters wrote.
Howard-Winters told Credit Union Journal she currently has no hard evidence of this allegation, but said she had asked the Texas CU Department to investigate how many new accounts were opened between Jan. 2 and April 15 by friends or family members of the CU’s employees.
“I’d like to see if there were accounts that were opened with minimal amounts of money, like $25, and if there has been any activity on those accounts since the meeting,” she said.
Culpepper did not return a phone call seeking comment by press time.
After the meeting began, members were informed of the names of the three directors up for re-election, and nominations were taken from the floor, Howard-Winters continued. After nominations were closed, ballots were prepared on a printer.
“On that piece of paper, you had to put your account number and name,” Howard-Winters explained. “I had to show my driver’s license to get a wristband, then they wrote my account number on the wristband, which then was stapled to my ballot.
“From what I understand, Roberts Rules of Order states that a contested election requires a secret ballot,” she said. “I understand not wanting to allow people to vote that shouldn’t, but if names and account numbers are on a ballot, it is intimidating if one does not want to vote for an incumbent–especially for employees.”
According to Howard-Winters, only 414 votes were cast at the meeting, which represented just 2% of the membership.
“To me, that is unacceptable,” she declared. “They should have allowed a mail-out ballot like when they tried to do the conversion, not limit it to people at the meeting. I think a re-vote needs to be held with mail ballots so all members are able to participate.”
Asked if she was a member of SaveFirstBasin, Howard-Winters replied: “I guess so, but I was against the conversion before I ever heard of SaveFirstBasin. It is simple, if I wanted a bank I’d go downtown, where there are six banks. I wanted a credit union, that’s why I belong.”
Howard-Winters pointed to an undated letter from Culpepper to members cancelling a Feb. 21 special meeting to vote on the conversion proposal as evidence that another attempt at converting the CU to a bank still is in the works. In his letter, Culpepper wrote: “The board wants to evaluate whether it can reward members for First Basin’s recent success by returning a portion of First Basin’s net worth to you. This would result in a cash payment to all eligible members upon conversion.”
In her letter to the Texas Credit Union Department, Howard-Winters responds: “Now, how much sense does that make? If you can’t get votes for free, you buy them?”
To Credit Union Journal, she said, “In my opinion, watching him at the meeting, Mr. Culpepper is not going to stop until he gets what he wants–when he turns our credit union into a mutual savings bank and then, who knows, turn it into a stock-issuing bank.”
So why did Howard-Winters write her letter?
“It is the unfairness of it all,” she said. “The election was a sham. There were so many deceptions, starting with the way they did notice. People didn’t even know there would be a vote. They didn’t allow the opposition to distribute our concerns about how much of our money was spent on the conversion. They didn’t allow the opposition to speak–people were shouted down by First Basin employees, who were required to attend the meeting.
“There were so many things that went wrong with this election,” she continued. “It took an hour and 45 minutes to count 414 ballots, which were handled by First Basin employees. Everything about it stuns me. I couldn’t believe they could conduct business this way. This is the reason Mr. Feeney was asked to send an examiner to oversee the election. Everything would have had to have been on the up and up, or they would have seen for themselves what took place.
“The Texas Credit Union Department didn’t do [its] job. We asked Mr. Feeney for help and he denied it, and that’s why we are in the mess we’re in now. The election needs to be called back, because the whole thing was a sham. It was ridiculous. Right is right and wrong is wrong, and they shouldn’t have done this to us. I contacted everybody and his brother in hopes somebody can do something and get our credit union back.
“I’m just really disappointed.” (c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved. http://www.cujournal.com http://www.sourcemedia.com
