PORTLAND, Ore.-A longtime member of St. Helen's Community FCU filed suit against the $160-million credit union last week, claiming the incumbent board and management rigged last year's vote to recall a majority of the board.
"The fix was in," alledged Steven Knebel of the September 2012 recall petition.
The credit union has responded to the suit by calling it "without merit."
Knebel said St. Helen's Community FCU's bylaws barred anyone from voting who did not attend a special meeting called for the recall. Knebel, who says his wife's family has been involved in the credit union for five decades, said he has been trying since the special meeting to get an official vote tally, which credit union officials have never made public. But, he argues, it was clear that a majority of the 200 or so members present at the special meeting favored the recall.
SHCFCU was chartered to serve employees of St. Helen's Pulp and Paper Co. and now serves Columbia County and Sauvie Island, Ore.
CEO Brooke Van Vleet said the credit union had received notice of the lawsuit and "after careful review...wholeheartedly believes it is without merit. We are prepared to vigorously defend our position. We feel this lawsuit is an unnecessary disruption to our No. 1 priority...to serve our members."
Knebel and other members petitioned for the recall of the majority of the seven-member board after the CU announced an agreement to merge with nearby Wauna FCU, even after they were assured during a June 2012 annual meeting there were no mergers being considered.
The then CEO of St. Helen's Community was eventually forced out and the longtime chairman named as interim CEO. Eventually, St. Helen's brought in Van Vleet from California's First Tech FCU as CEO and the proposed merger was terminated.
According to Knebel, the credit union's bylaws state that "only those people present at a special meeting for that purpose (to remove a director)" may vote, thereby voiding mail-in ballots. "There's no provision for a mail-in," Knebel told Credit Union Journal.
'Illegally Solicited'
Knebel charges in his suit that mail-in votes were illegally solicited by the CEO. In a letter to members prior to the special meeting, Van Vleet wrote, "While respecting the members' rights to voice their opinions through this process, I strongly advise you that an unwarranted and impulsive recall at this time will be disruptive to the credit union."
In his suit, Knebel states, "The ineligible votes were illegally solicited and unduly influenced with the specific intent to fix the election outcome with the improper use of membership funds." The suit, filed in district court, claims SHCFCU spent from $75,000 to $110,000 on the recall, including mailing ballots.
After the special meeting, credit union officials announced that 1,431 ballots were cast, but declined to disclose the actual vote count.
Knebel, who owns Oregon Indoor Organics in Rainier, said he doesn't have anything to gain from the lawsuit. He wants to put the matter before a judge to decide. After the Sept. 4, 2012, special meeting, two of the seven directors were defeated for reelection.
