Another Dog and Pony Show

SELF-DELUSION

There were several comments in response to Priority One Credit Union's May 27, 2009, Annual Meeting which was conducted at it's main branch in South Pasadena, California.

The meeting was apparently like no previous Annual Meeting and apparently, highly censored by President Charles R. Wiggington, Sr. and Board Chair, Diedra Harris-Brooks, who made certain the entire Board of Directors and entire Supervisory Committee were present along with attorney, William Adler, and two other representatives from his firm and two armed guards. Rather humorously, there were less members in attendance than there were officers and attorneys. It was a spectacle mired in intrigue that could only have been concocted by the chronic exaggerator, President Wiggington, and chronically dense, Board Chair, Diedra Harris-Brooks. The level of histrionics characterizing this year;s annual meeting is unprecedented.   

Another change at this year's meeting is that all attendees were required to sign-in at a table located in the downstairs branch entry. Standing alongside the table where credit union employees sat assisting visitors to sign-in, was an armed guard exhibiting a holstered gun. The meeting could be described as "overkill." So what is the reason for such a heavy handed presentation? It is clear, President Wiggington and Mrs. Harris-Brooks were send a clear message but to whom and why? 

Despite the fact the meeting only last 20 minutes, the President, the Board Chair and two other officers managed to skim over a lot of information, providing only the barest details. The highlights of their presentations included touching ever so slightly on the subject of improvements that will be introduced in the upcoming year, and without going into details, providing a short list of improvements they plan on introducing. 

ATTENDEE RESPONSES

We're not certain what is it that the President and Board Chair were trying to accomplish but based on the hurried presentations, we have to conclude that the goal was to finish up as quickly as possible. Here are comments posted on this blog by some attendees:

"Wiggington's face and bald head were covered with sweat. Gross!"

"I never met Diedra but what an unprofessional. When people asked questions she couldn't answer, she waived her hands at board members, asking they respond to the question. God, it was embarrassing." 

"Diedra asked the credit union's management team to come up and introduce themselves. Charles [Wiggington] stood up and introduced himself and then we waited and waited. Rodger did not come up even though he was just a few feet away standing at the reception desk. It was embarrassing. And no one knew where Manny [Gaitmaitan the CFO] was. We thought the was avoiding being at the meeting."  

"I [now] know Charles is guilty. He had lawyers, the board, the supervisors, a guard with a gun, a friend, he had an army. The guy is a pussy! No one at the office likes him and I am sure members who know him don't like either."  

"Everybody on the board and supervisor Committee is black except for one guy. Why? I know they don't represent me. How could they?" 

"They were so disorganized. Charles read from the annual report. He asked us to look at page 3 then page 2 and then back to page 3 and then back to page 2. It was awful. He tried to fool us. He said the figures were on page 3 or 2 or 4, I don't remember but he never came out and said if we are still in the negative. And then he gave us that bull that all credit unions have the same problems." 

"There was a guard with a gun!"

THE DRAMA QUEEN

So why did the President and Board Chair hire armed guards? The answer lies in statements made made by the President over a period of several weeks prior to the date of the meeting. The comments, more importantly than the hiring of an armed guard or the presence of the entire Board, Supervisory Committee and attorneys, reveal the Charles R. Wiggington, Sr. is both an alarmist and exaggerator and provide psychological insight into his fears, insecurities, and unfettered imagination.

Weeks before the meeting he easily convinced Board Chair, Diedra Harris-Brooks, and the other Directors that an invisible body of armed employees was planning on disrupting the annual meeting. The ignorant Directors were easily persuaded that what the President alleged, must in fact be true. So what evidence did the President provide that solidified his concerns? Not a thing, only because he had nothing to support his outlandish contentions. 

Here are the facts:

• No one ever told the President there was a coup being planned. 

• He concocted his story based on his fear and possibly because he, more than anyone else knows the long record of egregious acts he's committed and the abuses he alone has perpetrated against employee who he victimized.

And though his story was contrived and immensely absurd, the Board believed it at face value and never demanded evidence to support his claims. This is the same Board who rejected evidence proving Charles R. Wiggington, Sr., sexually harassed a former employee. 

The hiring of the guard, the added presence of the entire Board and Supervisory Committee and the attorney and two companions was carried out based only on the fantastic ramblings of Priority One's undisciplined President. Here are other comments posted by attendees of the annual meeting: 

"Diedra [Harris-Brooks] started the meeting. She introduced herself and then had Charles [Wiggington] talk about the finances. He looked awful. Some of the board wore suits but he stood there wearing an old yellow short sleeve shirt and some old pants that we have all seen too often. He pulled out the cheapest looking annual report the company has ever published. It was even stapled at one corner." 

"Diedra said someone was going to give the treasurer's report but its like she caught herself and changed the subject. She must think we are as stupid as Wiggington!" 

"After Wiggington finished speaking Deedra said she forgot to tell us about the question and answer session which was to follow the meeting. She told us we could only ask questions that had to do with what the meeting is about. That made a lot of us feel we couldn't ask questions like why is Charles still president or why did they allow him to take a members car or why are we in the negative. She controlled the meeting."  

"Why were the attorneys really there. She said they were there to answer questions but don't Diedra or anyone on the board or supervisory committee able to answer questions."

"Rodger was hiding from Charles earlier in the day. I heard him say Charles was tiring him out. Isn't that his friend?" 

"Charles wore the same old short-sleeved shirt. All he was missing was the pen holder. He wore some beige pants but no coat. Some of the board members actually wore coats."   

"They passed out the annual report. It is horrible. It was a few pages stapled at the corner. What is happening to the credit union?" 

"Diedra and Charles are connected at the woo woo. Forget Charles, how do we get her out!" 

"In the afternoon these people dressed in suits all showed up. Charles, who was not smiling, led them to the board room where they met with the board of directors and supervisory committee. The door closed and they stayed there about an hour."

The comments suggest that the President and Board Chair chose to create drama versus conducting a well-executed business meeting. The comments reveal that the two officers chose to control every aspect of the meeting and inarguably, did not want to listen to questions that could pose an inconvenience to their respective agendas. Were they afraid that someone might ask why the President hasn't been fired following the decline of millions of dollars in net income or why they opted to circumvent evidence proving he sexually harassed a former employee and decided he was worth retaining as President and CEO of a declining credit union? 

It's also interesting that attendees were distracted by the President's inappropriate attire. President Wiggington is not your traditional CEO. Since being appointed President, he usually wears short sleeved shirts, often without a tie. He does have suits though many worn and he often doesn't wear the coat. He is definitely not trying to project a professional appearance and clearly, he's not preoccupied with impressing anyone. Then again, for those who have met, seen, or know him, is there anything about him that suggests he possesses business acumen?  

Other officers attending the meeting included Senior Vice President, Rodger Smock, who was ordered to stand by the reception desk and guard stacks of neatly piled documents and copies of the 2008 Annual Report. Based on one attendees comments, the Vice President had spent a part of the day avoiding the President. 

IMPRESSIONS

There was an apparently nervous Board Chair who was apparently in a hurry to start and finish the proceedings. The President who was inappropriately dressed and who disclosed little of any importance. And then there's the presence of an armed guard.  The impression made by this year's proceedings was a meeting that the Board Chair possibly wished had never taken place. The President was so disinterested that he chose not to dress for the occasion. The armed guards are the finishing touch. Nothing says, "This is your credit union. Welcome!" as do armed guards. 

Maybe a better choice would have been that Mrs. Harris-Brooks choose to be forthright. She could have explained why she and the Board chose to defend the many egregious and illegal acts perpetrated by the President, including why Mrs. Harris-Brooks chose to lead a contingent of four officers to vote for President Wiggington's reinstatement. 

PLANS FOR 2009

The President spoke ever so briefly about the credit union's current financial state and stated that he is currently focusing his attention on "trying to save money" and that he is busily "streamlining" and finding ways to "work smarter." We don't believe he knows how to streamline spending and we certainly know he doesn't work and knows anything about working smarter. The evidence is found in more than 2 years of failed decisions, a drastic decline of Net Income, declining sales, and increasing overhead. 

He also said, "This is going to be confusing but open the report [Annual Report] and go to page 3." Why would the information contained in the report be confusing? 

The financials published on page 3 are shown below:

STATEMENT OF FINANCIAL CONDITION

ASSETS

--------------------------------------

CASH AND EQUIVALENTS

Unaudited for 3/31/09

$6,699,046 

Unaudited for 3/31/08

$6,946.235 

INVESTMENTS

Unaudited for 3/31/09

$55,000,544 

Unaudited for 3/31/08

$47,434.112 

------------------------------

LOANS TO MEMBERS

(Net of the allowance for loan losses)

Unaudited for 3/31/09

$113,031,452 

Audited for 3/31/08

$103,220,080 

-------------------------------------------------

ACCRUED INCOME RECEIVABLE

Unaudited as of 3/31/09

$918,000 

Audited as of 3/31/08

$853,26 

Property and Equipment

Unaudited as of 3/31/09

$3,402.945 

Audited as of 3/31/08

$3,285.557 

-------------------------------------------------------------------

FEDERAL SHARE INSURANCE FUND DEPOSIT

Federal Share Insurance Fund Deposit

 Unaudited as of 3/31/09

$398,202

Audited as of 3/31/08

$ 1,421,796

TOTAL ASSETS

$180,108.351 as of 3/31/09

$166,570,751 as of 3/31/08

------------------------------------------------------

LIABILITIES AND EQUITY

LIABILITIES

Members Shares

$146,443.482 as of 3/31/09

$143,877,378 as of 3/31/08

Borrowed Funds

$20,000,000 as of 3/31/09

$5,000,000 as of 3/31/08

Accrued expenses & other liabilities

$427,297 as of 3/31/09

$363,956 as of 3/31/08

Total Liabilities

$166,870,779 as of 3/31/09

$149,241.334 as of 3/31/08

----------------------------------------------

MEMBERS' EQUITIES

Regular Reserve

$5,128,606 as of 3/31/09

$5,128,606 as of 3/31/08

Undivided Earnings

$8,108,965 as of 3/31/09

$12,200,811 as of 3/31/08

Total Members' Equity

$13,237.571 as of 3/31/09

$17,329.417 as of 3/31/08

Total Liabilities and Members' Equities

$180,108,351 as of 3/31/09

$166,570,751 as of 3/31/08

-------------------------------------------

INTEREST INCOME

I

Interest on Loans to members

$7,013.262 as of 3/31/09

$7,058.298 as of 3/31/08

Interest on investment and cash equivalents

$519,223 as of 3/31/09

$2,531.093 as of 3/31/08

Total Interest Income

$7,532,485 as of 3/31/09

$9,589,391 as of 3/31/08

---------------------------------------------

INTEREST EXPENSE

Dividends on members' shares

$1,854,519 as of 3/31/09

$2,570,540 as of 3/31/08

Interest expense on borrowed funds

$583,448 as of 3/31/09

$174,834 as of 3/31/08

Net Interest Income

$5,094.518 as of 3/31/09

$6,844,017 as of 3/31/08

Provision for Loan Losses

$1,724,915 as of 3/31/09

$494,360 as of 3/31/08

Net Interest Income After Provision for loan losses

$3,369,603 as of 3/31/09

$6,349,657 as of 3/31/08

-------------------------------------------------------

NON-INTEREST INCOME

Fees and Charges

$2,621,624 as of 3/31/09

$2,517,539 as of 3/31/08

Other

$172,431 as of 3/31/09

$167,063 as of 3/31/08

Total Non-Interest Income

$2,794,055 as of 3/31/09

$2,684,602 as of 3/31/08

TOTAL

$6,163,658 as of 3/31/09

$9,034,259 as of 3/31/08

-----------------------------------------------------------------------------------

General and Administrative Expenses

Salaries and benefits

$4,517,329 as of 3/31/09

$4,413,307 as of 3/31/08

Office operations

$2,384,927 as of 3/31/09

$3,054,124 as of 3/31/08

Office Occupancy

$597,564 as of 3/31/09

$569,002 as of 3/31/08

Other

$2,755,685 as of 3/31/09

$599,468 as of 3/31/08

NET INCOME

3/31/09

-

 (Unaudited) as of 3/31/09

$4,091,846

(Audited) as of 3/31/08 

$398,358 

----------------------------------

Instead of taking the opportunity to try and regain trust, the Board and Supervisory Committee chose to conduct a hasty meeting and issued a stipulation prior and during the meeting that no questions would be answered about topics not in the agenda compiled by the President and Mrs. Harris-Brooks. No doubt the two appointed officers conducted themselves more like dictators than members of a cooperative. 

DECEPTION

Attendees informed us that Mrs. Harris-Brooks announced "we will next give you the Treasurer's Report" but stopped suddenly, stuttered and looked around the room in confusion. Her voice shaking, she introduced Supervisory Committee Chair,  Cornelia Simmons. .

At the end of the meeting, she pointed to the reception desk where Rodger Smock stood, guarding neatly placed documents. She invited attendees to obtain copies of the Monthly Income Statements that Charles R. Wiggington, Sr. had refused to post in defiance to state law but when attendees got to the reception desk, there were no Monthly Income Statements. Mrs., Harris-Brooks lied.

IS SHE DAFT?

Each year, Mrs. Simmons reads the same old stale report which always ends with the statement that all is well according to the Supervisory Committee. This year she departed, exerting tremendous effort to convince attendees that the Supervisory Committee cares about the concerns of member-owners.  

The 2008 Annual Report, which was distributed to guests when they first entered the branch contains Ms. Simmons report describing the Supervisory Committee's annually issued assessment about Priority One 's performance.  Her report states: 

The Supervisory Committee is pleased to announce that the Credit Union's financial condition and results of operations have been properly disclosed. Our review of recent regulatory and external audits confirms that management is in compliance and has taken measures to ensure effective operational procedures in this economic environment.

She certainly never explains why the credit union is losing millions of dollars in net income. She fails to explain why she ignored evidence in 2008, that proved Charles R. Wiggington, Sr. sexually harassed a former employee. She makes no reference to the fact that since March 2009, President Wiggington has refused to post the credit union's Monthly Income Statements despite he is required to do so under state law. We think Ms. Simmons is not being forthright at all and no amount of diversion is going to deter attention from President Wiggington's amassing failures. 

Mrs. Simmons also described the credit union's performance as "sound." We'd like to know what annual report she was reading because according to the credit union's 2008 financial reports Priority One lost $4,091,846! We'd like Ms. Simmons to explain how a loss of over $4 million can be construed as sound. 

HE SPEAKS 

We were surprised to learn that the usually verbose President, seemed unusually nervous and according to attendees, he sweated profusely causing his short-sleeved shirt to become stained. 

He began by stating that ALL credit unions are losing money due to the national economy. Of course, he failed to provide a single example of another credit union losing money due to the national economy. Though we agree, the national economy has caused challenges, some credit union's are actually led by Presidents who have found ways of reinventing their business models and have actually grown and prospered, but why quibble with facts when at best, Charles R. Wiggington, Sr.'s statements are borne out of his vivid imagination. 

The President pointed out that Priority One's Net Income exceeds $180,000,000 but what he failed to state is that $20 million of that amount represents the loan borrowed in mid-2008. Subsequently, the credit union's real Net Income is actually $160 million. That's a loss of more than $12 million since January 1, 2007, the date he began his appointment as President. 

The day after the annual meeting, the President mocked attendees while speaking to Mrs. Harris-Brooks, exclaiming, "You told them to ask questions and they didn't!" Mr. Wiggington may have struck his head on his way to work because what Diedra Harris-Brooks said during the annual meeting was that only questions could be asked if the topic of the question was referenced in the Board Chair's agenda. Any questions pertaining to topics not on her agenda, would not be answered. 

ROBBING FROM THE POOR TO GIVE TO THE GREEDY

The President recently confided to some staff members at the South Pasadena branch that he is planning to hire a COO who will take-over those responsibilities he is too busy to attend to. And though no announcement has officially been made, we've learned the new unnamed COO will start working at South Pasadena on Monday, June 1st and will occupy an office where the former Training Room was located.  

We have to assume the COO will be paid an executive's salary, possibly in the range of $75,000 to $95,000 per year. During the annual meeting, the President stated he is reducing spending, "streamling", and "working smarter. Is hiring another officer who will be paid an executive's salary an example of streamling? Clearly, the President is spending excess money in installing yet another officer while depriving employees. For examples, employees have been subject to a wage freeze that was implemented months ago. The credit union can no longer afford perks like food for employees on Payday Fridays nor can it afford the annual holiday party. What's more, he recently reduced the amount of gasoline reimbursement from .58.5 cents per mile to .55 cents per mile. 

We think President Wiggington views taking from employees and applying it to executives as an example of "working smarter." No, its working dishonestly and its counter-productive. The President and the Board Chair are now relishing a false victory, believing by suppressing attendees from asking questions that they've come out unscathed. To the contrary, their conduct during the annual meeting revealed that these two sluggards have much to hide and that they will do anything to avoid accountability for their disastrous decisions. The annual meeting may not have been disrupted by the President's imagined gun-wielding rebels but he clearly shot himself in his metaphorical foot. If deception was their plan, it failed because their plot found its way to this blog. Better luck next year, Senor Wiggington. 

More about the annual meeting in our next post.

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