Whistleblower Suit Claims Insider Enrichment At Hawaii Community FCU

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HONOLULU – The former chief financial officer at Hawaii Community FCU filed suit against top executives and the board of the $300 million credit union, claiming she was harassed into quitting after reporting allegations of lavish expenses and unusual deferred compensation paid to top executives.

Renee Inaba, who was hired as CFO in July 2008, is the daughter-in-law of Derek Inaba, one of the 74-year-old credit union’s 10 chartering members, local coffee growers. Derek Inaba was the credit union’s first CEO.

In addition to the whistleblower retaliation she faced, Inaba’s suit alleges that she was the victim of gender discrimination, being paid substantially less than her male counterparts and being denied the same access and opportunities as male vice presidents.

In her suit, filed in state court, Inaba claims she went to the board with complaints that top executives were being reimbursed for lavish expenses at local bars and strip clubs, were contracting with insiders for vendor services, and had that the board had arranged lucrative deferred compensation deals with top executives based not on service or performance, but on age. The suit claims the recently retired CEO of Hawaii Community, Michael Asam, was the biggest beneficiary, walking away with a $1 million package last year.

The suit says Inaba began a cost analysis of credit union expenses soon after taking the job. The new hire found “rampant, endemic corruption financial improprieties, conflicts of interest and breaches of fiduciary duty by managers of HCFCU that she never imagined possible at a federally insured credit union that was supposed to serve the members’ interests and was regulated by NCUA.”

The suit claims Inaba discovered top executives were charging entertainment expenses to the credit union, and booked an expensive management/board retreat in Maui. When she questioned the plans, she claims she was told, “It’s not that bad, it’s not like we have corporate jets like the guys on the mainland.”

“She began to question these things and said ‘this just doesn’t seem right,’” Jim Bickerton, Inaba’s attorney, told Credit Union Journal yesterday.

“At first they expressed interest in her complaints,” he said. “But then she was being harassed and she quit and brought the suit.”

Representatives of the credit union did not return a phone call seeking comment yesterday. The credit union’s attorney also did not respond to a request for comment.

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