Members Seek To Topple The Board At U.S. Senate FCU

Irate members of U.S. Senate FCU, one of the most prominent credit unions in the country by virtue of its perch atop Capitol Hill, are seeking to recall a majority of the credit union's 13-person board who voted at a special meeting March 27 to expand the board by two seats to accomodate two members who lost reelection bids.

"I, quite frankly, as a member, am outraged at the conduct of this board," said Cathy Nagle, a staffer for Sen. Bob Graham (D-FL). Nagle is spearheading a petition drive aimed at recalling the seven board members.

"They're looking, in essence, to throw out the rascals. It was an effort to subvert the democratic process," said a source close to the situation.

By the end of last week the members had collected more than the 200 signatures needed on a petition aimed at calling a special meeting where they plan to seek the recall of the seven members, including Chairman Donnee Gray.

Credit union bylaws allow for a simple majority of members attending a special meeting to vote on the recall.

Gray, who was bewildered by the recall effort, said last week he believes the board acted properly during the special meeting, when it voted-just 15 minutes before the ballot results were to be announced publicly to expand the panel.

"No, it wasn't improper," said Gray. "The (credit union's) bylaws and regulations allow us to do that. It wasn't improper."

The rare recall initiative is a direct result of a long-simmering feud between the incumbent board members and a group of newcomers who fought them to get on the ballot.

Prior to this year's election United States Senate FCU, which claims as many as 25 U.S. senators and thousands of congressional staffers among its members, had not held a board election for four years, as no challengers had come forward.

Indeed, the very fact that no elections had been held was called into question as well when three outsiders tried to gain access to the ballot.

"There were no ballots mailed, no results, no elections, no effort to recruit new board members," said Judy Rainey, one of the newcomers who was elected to the panel.

Ironically, the fight over the board does not appear to involve any allegations of mismanagement or disagreements over the direction of the credit union, just the inaction on board recruitment and elections-and eventually, the way the past board worked to "save itself" at this year's election (CUJ April 8).

When it became apparent that three newcomers were about to be elected to the panel and three incumbents were to be defeated, the board members called a special meeting to expand the size of the panel in order to save the seats for their defeated colleagues.

Two past board members, rather than be part of the newly expanded board, opted to step down. anthony zagami, a 12-year board member who finished fifth in the balloting, declined to be named because of the controversy, as did the sixth-place finisher.

Incumbents Russell Jackson and Normandie chose to retain their seats (CUJ April 8).

The controversy has spread through the halls of Congress just as lawmakers are finishing up debate on reform of congressional election processes, spurred by the close presidential elections of 2000.

Nagle, friends with at least one of the newly elected directors, said her anger is shared by hundreds of credit union members who have volunteered their signatures to the petition drive.

"I just know that we are all appalled. That's why we're doing it," she said.

Late last week the endangered board members were trying to broker a compromise deal to convince the peitioners to drop their latest initiative.

But an offer from the petitioners, that the two incumbents added by the special board vote resign, was rejected out of hand by the incumbents.

A reduction in the board back to its previous size is prohibited by the credit union's bylaws.

If the insurgents are successful in toppling the board majority, then it would be up to the surviving board members to name new directors because a new board election would not be held until next March.