A California court on July 28 ordered Patelco Credit Union to cooperate with an internal probe of alleged management abuses.
San Francisco County Superior Court Judge Stuart Pollak ruled that Edgar Callahan, chief executive of Patelco, must give a sworn statement to the credit union's supervisory committee and turn over some personnel records - two steps he has resisted.
Patelco justified the resistance in part because it claimed that the supervisory committee, which is separate from the credit union's board of directors, was exceeding the scope of its six-month-old investigation, as defined by a March 28 resolution.
The two parties had agreed that the board would pay for an investigation of management misconduct alleged to have occurred during an aborted merger with First Technology Federal Credit Union.
"They asked for personnel records that went back a number of years, far beyond the time the merger was even discussed," said Sharon Chapo of Chapo Communications, which is handling public relations for the San Francisco credit union. "Patelco questioned the necessity of those documents."
Mr. Callahan and his lawyers were unavailable for comment.
Patelco also claimed that turning over the papers could violate privacy rules.
But a lawyer representing the supervisory committee said the March 28 declaration wasn't the final word on the investigation's scope. He pointed out that an April 17 court order required Patelco to ensure that "the committee is authorized to conduct all such reviews and investigations as it shall deem to be necessary or appropriate in this matter."
Among the documents the judge ordered to be turned over:
* Documents relating to allegations of unspecified misconduct raised by three former employees.
* Documents relating to charges of management abuse against Mr. Callahan and Mark Wilbur, a Patelco regional manager.
* All personnel files related to Mr. Callahan.
The judge also ordered Mr. Callahan to make a sworn statement to the supervisory committee, and said the committee could call on other directors and employees to make statements.
Mr. Callahan had refused to make a statement on July 7, arguing that the ground rules for the interview should be laid out before he went on the record.
One unresolved matter is the payment of $108,025.65 in legal bills the supervisory committee incurred in February and March.
The committee contended that the board agreed to pay the bills in the March 28 declaration; the board demanded to see itemized receipts before paying, claiming it wanted to make sure expenses were related to the scope of the investigation.
The supervisory committee refused to grant such access to its records and asked the judge to order Patelco to pay the bills. Instead, Judge Pollak said he would determine whether the costs were justified.
In a June 28 letter to California credit union officials, Mr. Callahan complained about the committee's legal fees. But in its own brief the committee attributed nearly half of the costs to "obstructionist board tactics and the board's refusal to allow the investigation to proceed."