KENSINGTON, Md. -
LFCU Chairman Arnold S. Rosenthal alleged in the published statement that RSM McGladrey, the independent auditor hired to conduct and oversee the membership vote and which had earlier withdrawn its certification of the vote, had made numerous errors, including "miscounted ballots, acceptance of multiple ballots from individuals, multiple and mismatched versions of the vote tally." Rosenthal alleged that McGladrey had not provided proper "oversight" and that the problems were "systemic."
"As best we can tell, of the nearly 16,000 ballots mailed, approximately 2,500 members voted for the proposal and 2,500 voted against," Rosenthal said. "We spoke to many members who had legitimate disagreements with the strategic direction chosen by the board; it is a difficult decision and reasonable people may certainly disagree. However, we spoke to even more members who were swayed by the false and misleading information disseminated by individuals and organizations that do not have the best interests of Lafayette in mind."
Among those organizations, alleged Rosenthal, were the National Center for Member Trust, the group run primarily by Bucky Sebastian, CEO of GTE FCU, and Jim Blaine, CEO of State Employees Credit Union, whom Rosenthal said have "taken it upon themselves to disrupt any proposals. They place more importance on the credit union 'movement' than on the credit union."
Rosenthal also charged that the NCMT was "abetted" by CUNA and the Maryland and District of Columbia Credit Union Association, along with the National Cooperative Business Association, both of which, he said, "publish outrageous falsehoods with impunity."
According to the statement made on the LFCU website by Rosenthal, the strategy of conversion opponents includes:
* Recruit disgruntled former employees and/or board members.
* Hire a former NCUA attorney to produce harassing letters, demanding written responses.
* Co-opt the credit union press and CUNA communication channels.
* Make selective use of any written statement to create negative press and/or petition NCUA for intervention.
* Use CUNA's lobbying channels to seek intervention from public officials.
* Use any level of non-responsiveness to their demands as reason to recall the board, allowing no more than 750 members to disrupt the democratic process of tens of thousands of members.
Rosenthal added that "While pursuing these objectives, they feed the membership a steady stream of misinformation purporting that:
* The board and management are enriching themselves at members' expense and are therefore not to be trusted.
* Members will lose their ownership and rights upon conversion;
* That fees and loan rates will increase while service and dividends decrease.
Rosenthal goes on to explain why the board sought to convert, saying the advantages are "universally recognized." Adding that "We misjudged the level of bitterness that could be generated by the credit union industry," he said the plan is now to focus on improving Lafayette FCU.
Rosenthal did not address an effort by a group of members to hold a special meeting at which a board recall would be voted upon.
RSM McGladrey's Director of Marketing and Communications Rick Hagen told the Credit Union Journal that, "There are some assertions in the statements made by LFCU that we disagree with, but we've not had the time to revue the most recent one before we comment any further."
To read the entire text of the letter, visit www.lfcu.org.
