A routine National Credit Union Administration board meeting became a nearly four-hour brawl last week.
The Sept. 17 meeting started with board member Yolanda T. Wheat demanding that the three-member body discuss a government report critical of the agency's hiring practices.
It culminated in Chairman Norman E. D'Amours' storming out of the room while his colleagues continued the meeting, refusing to heed his call for a recess.
The spectacle floored observers, including some credit union executives who had traveled from Oregon and Florida, and it reinforced the NCUA's reputation as a dysfunctional agency.
The report that sparked the furor came from the U.S. Office of Personnel Management, which said that the NCUA had intentionally manipulated government rules for competitive hiring so that preselected candidates got jobs as examiners.
The agency's auditors found that NCUA had hired 16 people to fill vacancies but assigned them to work in other cities. The agency then blamed budget cuts and restructuring as reasons that the posted vacancies remained unfilled, the report said.
In addition, according to the report, NCUA hired at least 40 white examiners under a program intended to promote minority hiring.
"The fact that documentation which served to obscure the improper hiring activities was prepared and maintained suggests that the activity was willful and performed with knowledge of its impropriety," the agency's report said.
As a result, the agency must approve all NCUA hirings, and it said veterans and downsized federal workers who were passed over unfairly for the NCUA jobs must get a second chance. An agency spokesman said the matter has been referred to government lawyers for possible prosecution.
"This is a truly shocking report," said Rep. Spencer Bachus, R-Ala., a persistent NCUA critic. "We don't know yet if this was some diversity program run amok or just plain old-fashioned political cronyism. At a minimum, it shows abuse of power and misuse of funds."
"We are taking it very seriously" and cooperating with the U.S. Office of Personnel Management, Mr. D'Amours said in an interview Friday.
A General Accounting Office report this spring found that Mr. D'Amours tightly controlled NCUA meeting agendas and that an atmosphere of "distrust and animosity" existed among board members.
Ms. Wheat and fellow board member Shirlee P. Bowne said they were forced to make a scene at the meeting because Mr. D'Amours had refused to grant their request to add the report to the meeting's agenda. "Staff is moving ahead without board direction" on how to respond to the report, Ms. Bowne said.
Mr. D'Amours, who ruled the request out of order, said Ms. Wheat was retaliating against his decision to vote on a proposal designed to prevent credit unions with expanded charters from siphoning off the members of small credit unions.
Denying that charge, Ms. Wheat said she needed more time to prepare for the vote. u