As Seen On TV! An Early Glimpse Of Life Under The TARP
You've seen it a hundred times on various TV news shows and, admit it, you loved it. It was painful and embarrassing and you sometimes found yourself squirming as much as the guy you're watching, and still, you couldn't pull yourself away.
You know what I'm talking about, somebody guilty of illegal or just crass behavior (lately it's been Wall Street CEOs) confronted on a street or as they ran from their car to their front door by a news crew brandishing a hand-held video camera and a microphone demanding to know how so-and-so could ever have done such-and-such!
Would never happen to credit unions, right? After all, CUs are the white-hat-wearing antithesis to those guys, right? Don't be so sure.
One group of credit unions just found themselves being swept up in some of the media scrutiny focused on publicly traded companies that have been accepted federal "bailout" funds and then planned or went on expensive junkets. But in at least one case the coverage - which has yet to air - may be based on an incorrect assumption about credit unions and government TARP money. During a Credit Union Executives Society (CUES) meeting a few weeks back in St. Kitts, CEO Fred Johnson was confronted by an ABC News crew demanding to know how credit unions could accept money from the Treasury and then hold a meeting at a Caribbean resort. Johnson said he immediately made it clear to the reporter, identified as Justin Rood of Brian Ross' Investigative Unit, that CUs have not accepted any TARP funds.
"He stumbled after that" response, Johnson said, adding that the interview then went on for approximately 15 minutes. Johnson wasn't given any notice that ABC News was on-site, although he had noticed a crew using a mini-cam and dressed as tourists for several days shooting the CUES Symposium 2009: A CEO/Chairman Exchange at the Marriott hotel. The crew had asked whether they might go along on some of the afternoon excursions that were planned, including the golf tournament. Without knowing who they were, CUES turned down the request. The meeting format, in place for 17 years, calls for meetings between CEOs and their chairman in the morning, with outside events in the afternoon. Coincidentally, the meeting was going on at the same time NCUA was floating its multi-billion-dollar plan to resusitate U.S. Central, which dominated much of the discussion, Johnson said.
The ABC news crew is the same one that has broken or reported on a number of other high-profile stories on how major corporations that needed to be bailed out continue to be anything but frugal with the perks, such as the million-dollar-plus redecorating of the office of a now-resigned Merrill Lynch CEO, John Thain, whose interview on why he just couldn't work without a $4,000 office trash can was priceless.
Johnson, who said he stressed during the interview that "no taxpayer dollars were used to fund this event," said he has no idea when or if ABC News plans to use the footage, but is concerned that if credit unions gain access to TARP funds it will be used afterward and give the appearance that he had "lied."
Johnson said he didn't like to use the word but he said the interview clearly felt like an "ambush." He told the reporter that not a dime of taxpayer money has ever been used to help credit unions, and that overall credit unions are well-capitalized, but obviously has no idea if any of his comments will be used.
CUES booked the St. Kitts Marriott for the event three years ago. Approximately 150 CU CEOs and chairmen were on hand.
Whether credit unions should be in the Carribbean or any other resorts is an intra-credit union issue, and one that certainly deserves debate. I've also written before that all board/CEO travel should be disclosed to the membership in the newsletter and online. If you're not willing to tell the members/owners where they're paying to send folks, then perhaps you shouldn't go.
One other note: the ABC news crew may have been in the wrong place. About the same time as the CUES meeting, Credit Union Journal received a press release from NCUA Board Member Rodney Hood showing him presenting an award to an employee of United Nations FCU with the Vice Chairman's Award for Distinguished Service. The presentation took place in Switzerland - at the same time NCUA was rolling out its corporoate rescue plan and serious questions were being raised by some CUs over where the regulators have been.
Maybe Mr. Hood was investigating whether corporates had any secret Swiss bank accounts.
Frank J. Diekmann can be reached at email@example.com.