A one-month truce has been called in the fight for Independence Federal Savings Bank in Washington, but don’t expect management and the thrift’s largest shareholder to spend that time looking for a compromise solution.
Each blames the other for the hard times the $178 million-asset, black-owned thrift is going through, and the emergence of a group led by some of the city’s most influential ministers has further inflamed the hostility.
Thomas L. Batties, Independence’s president and chief executive officer, blames investor Morton L. Bender for the $2.1 million loss the company posted in 2004. It would have turned a $900,000 profit if not for legal fees it ran up in courtroom clashes with Mr. Bender, the CEO said.
Mr. Bender, who owns about 20% of the Independence’s outstanding shares, says its losses are the result of poor management. He said he suspects that members of the thrift’s board or management team assisted the minister group, which earlier this week distributed documents harshly critical of him.
Led by Walter E. Fauntroy, Washington’s nonvoting representative in Congress from 1971 to 1991, the Committee to Save Independence Federal Savings Bank says it is working independently to preserve Independence’s status as a black-owned savings bank. It has declared its opposition to Mr. Bender’s effort to get two of his allies on its board.
Mr. Bender is white. His two nominees, Osborne George and John S. Wilson Jr., are black.
On Tuesday the committee held a press conference in front of the Office of Thrift Supervision’s headquarters urging lawmakers and banking regulators to step in and block Mr. Bender, and it followed up by distributing papers to shareholders that accused him of using “minority faces as fronts” to win control of Independence. The documents describe Mr. George and Mr. Wilson as “mere puppets of Bender’s … required to do whatever he tells them.”
The documents went out a day after Mr. Bender sent a sharply worded letter of his own to shareholders.
The OTS indicated that it might fine Mr. Bender for what it said were misleading statements in his shareholder letter. And in a May 10 letter to Mr. Batties, the OTS said that documents from Mr. Fauntroy’s group were rife with “apparent false and misleading statements,” and advised Independence to postpone a vote to fill three open seats on its board of directors to give shareholders time to review “clarifying information.”
The vote was originally to have taken place at Independence’s annual meeting Wednesday but was postponed until June 8.
Mr. Bender called the committee’s charges groundless and said he would keep Independence a minority-run bank if he were able to gain control of the company.
“They’ve made this into a black-white thing, and I’m livid about that,” Mr. Bender said. “I don’t do things like that. Black, white, green, purple, I don’t care. It’s the bottom line I’m concerned about.”
For his part, Mr. Batties said he had no knowledge of the minister group’s activities. Independence is running its own slate for the three open board seats, and Mr. Batties said he is hopeful shareholders will select it, though he declined to speculate about the outcome of the election.
Mr. Batties said the conflict with Mr. Bender has left him with little time to focus on business development.
“Our depositors and our borrowers are nervous, and attracting quality talent has been difficult,” he said. “But I think we’d do fine if we could just quiet all this and concentrate on effectively implementing our business plan.”
Mr. Bender said he remains intent on pressing his challenge and said Mr. George and Mr. Wilson would be on the ballot for the June 8 vote.
