A part-time employee of Independence Federal Savings Bank in Washington and a public relations firm Independence had retained were behind a letter from a supposedly independent group criticizing a dissident shareholder's efforts to take over the thrift.
As first reported in Wednesday's Washington Post, U.S. District Judge Rosemary M. Collyer found that a May 4, 2005, letter from the "Committee to Save Independence Federal Bank," which was purportedly signed by a two African-American clergy members in Washington, had actually come from Christopher Chambers, a lawyer and part-time employee, and an official at Impact Strategies, a public relations firm that had been retained by the $170 million-asset thrift.
Judge Collyer issued the July 21 opinion on a lawsuit brought by Morton Bender, Independence's largest shareholder. Mr. Bender claims that the thrift's senior management broke securities laws and bylaws in the run-up to its October 2005 shareholders meeting.
Thomas L. Batties, who was Independence Federal's chief executive officer then, said shortly after the letter was drafted that the Committee to Save Independence Federal Bank was an independent organization and that the thrift had no involvement with the letter.
But Judge Collyer called Independence's witnesses "evasive, nonresponsive, and intentionally contradictory. It is an understatement to say that the court has a difficult time crediting much of their testimony."
Mr. Bender, who is white, has been involved in a protracted battle for control of the African-American-owned thrift. In June the Office of Thrift Supervision ordered the thrift to conduct a thorough review of its operations and said it should consider selling itself if it does not have the resources to turn itself around.
Independence has lost about $4 million over the past four years and has not turned a profit since 2001.
