$6M Not Paid After Conservatorship

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This is to correct erroneous articles that appear in the July 23, 2009 online edition and the July 27, 2009 online and print editions of the Credit Union Journal. All three articles incorrectly assert that former WesCorp CEO Robert Siravo received a $6-million payout after NCUA placed WesCorp into conservatorship.

The July 23, 2009 online article, entitled "The Tale of Two Corporate Failures: One CEO Got $6 Million, the Other Nothing," states in its lead-in sentence that "Bob Siravo, the former CEO of WesCorp FCU,...received a $6-million payout after he was fired when NCUA took the $34-billion corporate under conservatorship." The article goes on to state that Francis Lee, the CEO of U.S. Central FCU, "was not as lucky and had his entire retirement package repudiated by NCUA under the agency's extraordinary conservatorship powers, the source said."

The July 27, 2009 online and print articles, both entitled "Former WesCorp CEO Paid $6 Million After Corporate Failed," state in the opening sentence that "Credit union executives are angry at the payout of Bob Siravo, the former CEO of WesCorp FCU, who received a $6-million payout after he was fired when NCUA took the $34-billion corporate under conservatorship." Later these articles state that "NCUA noted that the $6 million paid to Siravor wasa earned by him prior to the March 20 conservatorship, and the agency repudiated any additional severance payments he was due to earn." Both articles contain a sentence similar to the July 23 article regarding the repudiation of Francis Lee's contract.

These articles create an impression that NCUA failed to fully repudiate Mr. Siravo's employment contract, thus enabling him to receive an extraordinary amount of money after WesCorp was placed into conservatorship. This simply is not true. Immediately upon placing WesCorp into conservatorship, the Agent for the Conservator repudiated Mr. Siravo's employment contract. That was the same action that was taken by the Agent for the Conservator of U.S. Central with respect to Mr. Lee's contract. The truth is that Mr. Siravo received his payout fromWesCorp almost one year before it was placed into conservatorship. It is patently incorrect to imply that action or inaction by NCUA was responsible for the payout in question to Mr. Siravo. NCUA, in the case of both corporate credit unions, acted responsibly and decisively to conserve the aseets of the two credit unions and to protect the interests of the members. Indeed, those are the principles that continue to guide NCUA as it carries out its responsibilities as conservator of these two institutions.

Robert M. Fenner, General Counsel
NCUA, Alexandria, Va.

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