War! What War? White House Addresses NCUA

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In local parlance, someone who exhibits political muscle in the Capital and gets things done is known to have "juice."

And that's what NCUA Chairman Dennis Dollar and his representatives have proven to have in recent weeks, most significantly in the firing of NCUA Board Member Yolanda Wheat by the White House.

Dollar and his people don't like to talk about it. After all, these kind of political machinations are best conducted behind closed doors and are much more effective that way. But it is exceedingly likely the White House would not have acted to fire Wheat-who rejected their request to step aside-if they had not been prodded by someone. Believe me, with the war on terrorism, the disappearance of the federal budget surplus, the ongoing recession, and a few other imminent crises, the succession at NCUA was not among those issues on which the White House is focused. So how else would they get involved, first in asking Wheat to end her status as a holdover, then pushing her out the door?

A Stormy Tenure

Wheat's tenure on the NCUA board was a stormy one. Her appointment to the three-person panel in 1995 was accompanied by much optimism by a credit union movement frustrated by an imperious NCUA Chairman, Norm D'Amours. Even though the two Democrats came from the same political background they clashed immediately. While observers attributed this to D'Amours' obstinacy, it became clear as time went on that Wheat herself was a very difficult person to deal with. The personal conflicts between the two, which were laughable at times, made it difficult for the NCUA board to get things done, even when the two agreed on matters.

Take the so-called Community Action Plan, or CAP. Both D'Amours and Wheat agreed they wanted some mechanism to compel the drove of new community charters to document their service to low-income communities. They each said so on numerous occasions. But Wheat's antipathy towards D'Amours compelled her to reject D'Amours' proposal, which would later germinate as CAP. Wheat so disliked D'Amours that an hour after telling the Congressional Black Caucus, natural allies for this African-American regulator, of her support for efforts to reach out to low-income communities, she voted down D'Amours' Community Reinvestment Act-like proposal.

That, of course, was not their first public clash. In September 1997, the two went at it during an open board meeting over a report condemning NCUA's skirting of civil service rules to boost its female and minority hiring. D'Amours, who, at the least, gave his implied consent to the practice, wanted the report discussed behind closed doors. Wheat, in an obvious effort to embarrass D'Amours, insisted it be debated before the public. D'Amours always denied any involvement in the scheme, which would cost then NCUA Executive Director Karl Hoyle his job and resulted in the suspension of six senior staffers, including three regional directors. And it was clear that even if D'Amours did not know about the scheme he certainly encouraged its goals.

That incident did not go without its ironies, either. Here was Wheat, an African-American woman, denouncing an NCUA practice that had resulted in the promotion to prominent federal positions of other African-American women. Wheat took no small pleasure in condemning the practice in public, and then before a congressional hearing. Observers had to wonder if Wheat would have adopted the same stance if D'Amours had not been implicated in the scheme.

Wheat's own NCUA tenure finally peaked last January after more than a year of backroom dealing. She succeeded in convincing the Clinton administration to designate her chairman of the board, only after D'Amours himself had overstayed his welcome and was kicked out. But her chairmanship became an embarrassment when she immediately packed her office with four highly paid Democratic operatives suddenly looking for work as a Republican administration beckoned. Within weeks, the new administration, which would normally bury NCUA way down on its list of priorities, removed Wheat and named Dollar the new NCUA chair. It was a swift and most public denouncement for Wheat, less than a month after reaching the pinnacle of her political career.

More important than the public clashes was what went on behind closed doors at the agency during the Wheat tenure. Top agency staffers were constantly griping how Wheat was imperious and difficult to deal with. On a regular basis she embarrassed staffers with public criticism during open board meetings. As a result, there were few tears among career NCUA employees when she fled the agency last month. One top staffer advised Wheat's representatives not to hold a going away party, because few, if any, NCUA executives would be interested in attending.

Some of the misdeeds perpetrated by Wheat have been erased. Upon being named chairman last year, Dollar immediately obtained the resignations of the four Clinton operatives hired by Wheat. And last year, the NCUA board voted, with Wheat objecting, to appoint Jane Walters, one of the regional directors targeted by Wheat in the hiring scandal, as director of southwest Region Five.

Just last month, Kent Buckham, another executive targeted by Wheat in the hiring scandal, was named, also over Wheat's objections, as director of the Office of Corporate Credit Unions.

Lobbyists and other observers in the credit union movement will always wonder about Wheat. Was she shaped by her antipathy to D'Amours and thus, backed into a corner?

She is a smart lawyer, as she exhibited during her final debate at the December NCUA board meeting over the repeal of CAP. But this is Washington, the political capital of the world. And smarts can only get you so far.

On numerous occasions it was obvious that Wheat was over-matched politically.

Wheat may be remembered for the way she left town. Not that she moved to Kansas City with her family last fall to perform her $120,000-a-year job by telephone and fax. But when she was asked by the President to step aside and make room for a successor, she refused. So they fired her.

Readers can reach Ed Roberts at robertscuj aol.com.

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