TESTAMENT
There is no better testament (and believe us, there are many) of Priority One Credit Union's President, Charles R. Wiggington, Sr. failures than the termination of four employees during the past three weeks.The four employees who were laid-off, were terminated to cut spending.
"This morning there was a message on [the] intranet from Bea [Walker]. It said 5 employees were let go. We are all scared and a lot of us don't know if we are going to have a job next week. Two thing[s] bother me. One is that at the meeting they told us things were improving and nothing was even hinted about a lay off. The other is that Wiggington walked around all day with a big smile on his face. He didn't care about what happened. What's worse is he is the reason they did this. He can't blame the economy because he played in 07 and 08 and even in 09. He never made a plan for bad times and wasted time and money rather than doing what he's paid to do. Its scary."
It's only "scary" if you're not a manager or on the President's list of preferred staff. His constant verbal assurances that business is good is, as we've reported often, a lie undermined by the credit union's Monthly Financial Statements and quarterly Financial Performance Reports. However, not to side with the President, a few weeks ago he mentioned that delinquencies had risen and Net Capital had decline, two pivotal factors used to assess the credit union's actual versus alleged performance. But he has been dishonest enough to deter attention away from the credit union's actual financial state. When meandering through the credit union, he often stops at the desks of supervisors and/or their staffs and loudly declares "business is improving." Superficially, he is sending mixed message completely inconsistent with one another. But the often dull President knows that he can't be held accountable for verbal assurances that claim business is well.
The reason he may have smiled after the memorandum was issued because its evident that he must have been ordered to immediately reduce spending in what has become a frantic effort to raise Net Capital. We also know that auditors visiting the credit union reminded him that the credit union could be taken over by the NCUA if if Net Capital dips to 6%.
However, for those who may not know, one reason why Beatrice Walker was hired was to introduce new streams of income and reduce spending. Shortly after she was hired, the President disclosed that she had the task of identifying what positions in the credit union could be phased out and what employees, terminated. Her assignment was delegated by the Board of Directors who are frantic to reduce spending and want "rebel employees" as they've been labeled by Ms. Walker, identified and terminated.
And though Priority One's executives don't hold a patent on hypocrisy, it would be remiss of us not to point out the hypocritical acts and statements made by the credit union's highest echelon.
SAVE OR SPEND
- Though Ms. Walker is credited with the recent termination of four employees for the purpose of reducing spending, the credit union built a new Training Room a few months ago and is now planning construction of a Call Center. Evidently, reductions in spending are being offset by uncontrolled spending. The President's 2007 mailing fiasco cost the credit union $100,000 to resolve. The President's 2007 refusal to resolve the technical issues affecting the conversion of Inland Counties Credit Union's member records into Priority One's database also cost $100,000 to resolve.
- You can add his 2008 purchase of a $600,000 phone system that has been jarred by unceasing technical problems and the addition of hundreds of dollars being spent each month for the services of telephone technicians who visit the credit union to try and resolve the newest slew of issues impacting the system.
- There is also the monies spent on a 2008 investigation to determine if the President had sexually harassed a former employee. As reported here often, the investigation proved he sexually harassed the employee but Board Chair, Diedra Harris-Brooks, led a small contingent of all-Black officers to vote for his reinstatement.
- In 2008, the President borrowed $20 million from the credit union's line-of-credit forcing the credit union to pay more than $30,000 each month, in interest alone against the principle.
THE WORLD WIDE WEB
While traversing the Internet, we discovered several posts regarding the 2007 mailing fiasco which occurred when ballots were mailed to members in envelopes on whose exterior were printed member account and social security numbers. The completely avoidable debacle proved a public relations nightmares, provoking a large number of employees to call and write to the President, expressing their dissatisfaction over the breach, but President Wiggington chose not to respond to the concerns, He instead, handed a stock of letters and print-out containing member names and phone numbers and ordered a business development representative to contact every person who either called or wrote to the credit union concerning the breach.
When the Board learned about the breach, they demanded that the President terminate the person to caused the error. That person would have been the President, himself, a fact he never admitted to. Instead, he found a victim in the then IT Supervisor who had gathered the information that was sent to the publisher who had been hired to print and mail the ballots. He convinced the ignorant Board that instead of firing the IT Supervisor, that they allow him to be suspended for three days without pay. The Board who never initiated an investigation but who relied entirely on what they were told by the President, agreed to suspend the IT Supervisor.
Fun fact. When accused of sexually harassing a former employee, which by the way is a federal offense, the Board suspended the President with pay.
The President denies all involvement in the breach, however, we spoke to the IT Supervisor, prior to his resignation, who provided us with the following account:
When the Board learned about the breach, they demanded that the President terminate the person to caused the error. That person would have been the President, himself, a fact he never admitted to. Instead, he found a victim in the then IT Supervisor who had gathered the information that was sent to the publisher who had been hired to print and mail the ballots. He convinced the ignorant Board that instead of firing the IT Supervisor, that they allow him to be suspended for three days without pay. The Board who never initiated an investigation but who relied entirely on what they were told by the President, agreed to suspend the IT Supervisor.
Fun fact. When accused of sexually harassing a former employee, which by the way is a federal offense, the Board suspended the President with pay.
The President denies all involvement in the breach, however, we spoke to the IT Supervisor, prior to his resignation, who provided us with the following account:
THE IT SUPERVISOR'S ACCOUNT
The 2007 Mailing Fiasco
"As you know, I was just promoted to IT Supervisor. Before I was promoted, Rose used to create the discs containing member information that was sent to the printing company so they could create the ballots and letter that they mailed to members.
Charles [Wiggington] asked me to download member information for only active members in good standing on to a disc and that I send this to the printing company. Because I was never involved in doing this, I took the disc with all the information to the President and asked if he could review the contents to make sure the information that was being sent to the printer was correct. He told me, "I don't have to check it, just send it to the printer." So the disc was sent which to the printing company. I was told by people who used to be involved in this project that the printing company would provide a sample batch of ballots that we could check to see if there were any errors.
When the batch arrived [at the South Pasadena branch] it was delivered to Charles but he refused to check it because he's the President and that's not his job. He said, "Just mail it."
After the breach came out to the open, Charles came to me and told me that Board decided I was at fault for the mailing and that they told him to fire me but he interceded and convinced them I should only be suspended. It was't my fault. I took it to Charles to check. I just don't know why the Board thinks I'm at fault."
We of course informed the then IT Supervisor that the Board never conducted an investigation which led them to conclude that it was the IT Supervisor who caused the breach of security. The Directors are just not that motivated or bright. It was President Wiggington who told them the IT Supervisor was at fault never disclosing that it was he, alone, who breached security. At stake, was the President's employment and he wasn't about to exercise courage and admit what he'd done. Furthermore, he had just escaped being held accountable when an investigation revealed that his hand-picked AVP, Liz Campos, had violated federal law when she knowingly kited.
INTERNET COMMENTARIES
From: Ron Simmons (ron.simmons gmail.com)
Date: Wed May 30 2007 - 10:36:13 CDT
Tuesday, May 29, 2007 5:15 PM PT Posted by Steve Bass
“I'm watching my credit union account like a hawk. That's because Priority One Credit Union -- the one I use -- had a security breach that was stunning. They recently sent election ballots to members. Printed on the outside of the envelope were some numbers. The first was our account number. That might not have been enough to help with anyone intent on identity theft, so they also printed my social security number on the envelope. I received a letter of apology the other day. They told me they deeply regretted the inconvenience.”
THE PRESIDENT'S RESPONSE
Mr. Simmons post also provides the following excerpt of the letter issued by President Wiggington and intended to placate members:
Dear Members:
Dear Members:
During the last week, we mailed our election ballots to members. Unfortunately, an error occurred during the distribution of this ballot, and personal information was inadvertently included above your address on the envelope. This information was not printed in a format that would be immediately recognizable, and we have no indication your personal information has been accessed or misused in any way.”
Dataloss Mailing List (dataloss attrition.org)
"Unfortunately an error occurred during the distribution of this ballot." Yes, that error was President Wiggington who refused to perform security procedures before the ballots were mailed to members. When asked to check the mailing before it was sent to members, he stated, "I don't do that. I'm the President." His refusal cost the credit union $100,000.
In trying to lessen the impact of an undeniable breach in security, the President adds, "This information was not printed in a format that wold be immediately recognizable." Whether or not the error was immediately recognizable is certainly not the point, is it? The fact that confidential member information was printed on the exterior of the envelope constitutes a breach of security. And what is the format the President is alluding to but failed to describe? Well, we've seen a few of the envelopes and here is an example of how member social security numbers were formatted:
The omission of hyphens in a social security number is inconsequential because the issue is that member credit union account and social security numbers were printed on the exterior of the envelopes sent to members.
In trying to lessen the impact of an undeniable breach in security, the President adds, "This information was not printed in a format that wold be immediately recognizable." Whether or not the error was immediately recognizable is certainly not the point, is it? The fact that confidential member information was printed on the exterior of the envelope constitutes a breach of security. And what is the format the President is alluding to but failed to describe? Well, we've seen a few of the envelopes and here is an example of how member social security numbers were formatted:
555555555
The omission of hyphens in a social security number is inconsequential because the issue is that member credit union account and social security numbers were printed on the exterior of the envelopes sent to members.
AUGUST'S FINANCIALS
Please note, the amount of Net (Loss) Income for the month of July 2009, was reported at a negative $87,774.10. Year-to-date income was reported at -$4,003,555.89.
In August 2009, the amount of Net (Loss) Income reported for the month was
-$184,648.82 while the Year-to-Date total is -$4,188,204.71. The financials confirm Net Income continues to decline and financially, Priority One remains well embedded in the negative. Of course, this brings into question the President's frequent verbalizations made over the past three months, asserting business is improving.
We've edited the lengthy report to show what we believe are the most revealing references affirming the credit union's financial standing. We've also annotated in RED font, those references we deem most important, those we find questionable, and those requiring clarification and in other cases, further investigation.
We've edited the lengthy report to show what we believe are the most revealing references affirming the credit union's financial standing. We've also annotated in RED font, those references we deem most important, those we find questionable, and those requiring clarification and in other cases, further investigation.
Assets/Loans
$111,627.244.04
LESS ALLOWANCE FOR LOSSES
$2,600,000.00
NET LOANS
$109,027,244.04
ACCOUNTS PAYABLE
$3,155,510.89
CASH
$2,643,699.05
INVESTMENTS
$59,066,840.95
INVESTMENTS IN COOP
$40,000.00
INVESTMENT IN FSCC
$24,000.00
NCUA DEPOSIT
$1,284,522.90
ACCRUED INCOME
$1,039.311.45
PREPAID EXPENSES
$471,405.14
ASSETS IN LIQUIDATION
$53,740.53
OTHER ASSETS
$0.00
SUB-TOTAL
$176,806,274.95
B. LIABILITIES AND EQUITY
Accounts Payable
$104,067,43
Notes Payable
$20,000,000.00 (Amount borrowed in 2008)
Accrued Expenses
$405,819.64
Dividends Payable
$28,312.00
Suspense Accounts
$0.00
C. EQUITY
Regular Reserve
$5,128,606.33
$7,391,195.80
Total Equity
$12,519,802.13
Total Liabilities and Equity
$180,138,204.75 (minus the $20 million loan borrowed in mid-2008)
Month-to-Date
$513,588.33
Year-to-Date
$4,396,816.43
Income from Investments
Month-to-Date
$178,498.71
Year-to-Date
$1,171,124.02
Fees and Charges
Month-to-Date
$201,758.81
Year-to-Date
Year-to-Date
$1,673,952.61
Miscellaneous Operating Income
Month-to-Date
Month-to-Date
$30,605.46
Year-to-Date
$184,731.78
Total Operating Income
Month-to-Date
$924,451.31
Year-to-Date
$7,426,624.84
E. OPERATING EXPENSES
Employee Salaries/Bonus
Month-to-Date
Month-to-Date
$314,538.96
Year-to-Date
$2,477,804.01
Branch Lease
Month-to-Date
$12,432.68
Year-to-Date
$123,957.13
Security Expenses
Month-to-Date
$2497.94
Year-to-Date
$19,078.04
Education Expense: Staff
Month-to-Date
$766.83
YTD
$11,307.88
Education Expense: Senior Mgmt
Month-to-Date
$169.00
YTD
$4003.15
Education: Supervisory Committee
Month-to-Date
$0.00
YTD
$9227.26
Education: Board of Directors
Month-to-Date
$0.00
YTD
$960.00
Training Expense
Month-to-Date
$726.76
Year-to-Date
$11,940.58
Advertising Expenses
Month-to-Date
$0.00
YTD
$4451.50
Loan Promotions
Month-to-Date
$5169.55
YTD
$54,146.58
Promotional Items
Month-to-Date
$0.00
YTD
$1964.56
Member Research
Month-to-Date
$0.00
Year-to-Date
$0.00
Business Development Expense
Month-to-Date
$516.74
YTD
$3496.43
Legal Expenses
Month-to-Date
$11,889.05
YTD
$89,191.59
Consultancy Fees
Month-to-Date
$16,576.35
YTD
$49,761.39
Associated Management Company
Month-to-Date
$0.00
YTD
$78,303.66
Shared Branching Expense
Month-to-Date
$5555.73
YTD
$37,998.90
Provision for Loan Losses
Month-to-Date
$184,590.47
YTD
$2,190,551.33
Interest on Borrowed Money
Month-to-Date
$60,513.70
YTD
$474,399.25 (Interest paid against $20 million loan borrowed in mid-2008)
Annual Meeting Expenses
Month-to-Date
$2200.00
YTD
$53,722.40 (Why was this amount spent on the annual meeting?)
Board of Directors/Supervisors
Month-to-Date
$1109.60
YTD
$9311.50
General Expenses
Month-to-Date
$7442.66
YTD
$63,019.55
Branch Expenses
Month-to-Date
$0.00
YTD
$0.00
Other Losses (What specifically are the other losses?)
Month-to-Date
$6824.56
YTD
$54,228.50
Succession/Strategic Planning
Month-to-Date
$3935.39
YTD
$3935.39
Ballot Incident Expense (Why did the President omit the expenses he caused the credit union to incur when he and Board Chair, Diedra Harris-Brooks)
Month-to-Date
$0.00
YTD
$0.00
Total Operating Expenses
Month-to-Date
$990,209.29
YTD
$9,792.552.57
Income (Loss) from Operations
Month-to-Date
-$65,757.98
-$65,757.98
YTD
-$2,365,927.73
Loss (Gain) on Disp of Investment
Month-to-Date
-$135.86
Month-to-Date
-$184,648.82
Year-to-Date
-$4,188.204.71
During the May 2009 annual meeting, President Charles R. Wiggington, Sr. said he had begun reducing spending; was in the process of "streamlining"; and was in his words, "working smarter." As part of his agenda allegedly designed to eventually reverse losses, the President implemented a company-wide wage freeze. Recently, COO, Beatrice Walker, targeted four employees who were terminated because according the President, their positions had been determined to be unnecessary to the credit union's operation. In spite of his alleged efforts, losses increased during the month of August 2009.
A key problem with Mr. Wiggington's current strategies is they are, like so many of his plans, tactically self-serving His current agenda intentionally targets the salaries and benefits paid to non-exempt personnel who are also the sector of employee who earn the least. However, the President and his overpaid executive staff have not been affected by any of his so-called cost reducing strategies. In fact, the President's agenda ensures that he continues to be paid more than $150,000 per year and that he and some of his executive staff continue to be the recipients of annual bonuses and raises. President Wiggington has made certain that his strategies to reduce spending have no adverse financial impact upon him and his executive sector.
The President's efforts are not so much remedial but designed to ensure he lifestyle is in no way inconvenienced and that his salary remain intact, while the salaries of non-exempt personnel remain in a state of suspended animation until he deems it safe to lift the wage freeze. Don't expect President Wiggington to lift the wage freeze to be lifted at anytime soon.
President Wiggington's strategies which are allegedly intended to offset spending and decrease losses, is nothing more than survival of the fittest. He has made certain that he will remain unaffected while the credit union struggles to regain its former secure financial footing and ignoring the fact that the credit union cycle of losses were caused entirely by his horrendous business decisions and abhorrent personal behaviors.
A key problem with Mr. Wiggington's current strategies is they are, like so many of his plans, tactically self-serving His current agenda intentionally targets the salaries and benefits paid to non-exempt personnel who are also the sector of employee who earn the least. However, the President and his overpaid executive staff have not been affected by any of his so-called cost reducing strategies. In fact, the President's agenda ensures that he continues to be paid more than $150,000 per year and that he and some of his executive staff continue to be the recipients of annual bonuses and raises. President Wiggington has made certain that his strategies to reduce spending have no adverse financial impact upon him and his executive sector.
The President's efforts are not so much remedial but designed to ensure he lifestyle is in no way inconvenienced and that his salary remain intact, while the salaries of non-exempt personnel remain in a state of suspended animation until he deems it safe to lift the wage freeze. Don't expect President Wiggington to lift the wage freeze to be lifted at anytime soon.
President Wiggington's strategies which are allegedly intended to offset spending and decrease losses, is nothing more than survival of the fittest. He has made certain that he will remain unaffected while the credit union struggles to regain its former secure financial footing and ignoring the fact that the credit union cycle of losses were caused entirely by his horrendous business decisions and abhorrent personal behaviors.
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14 comments:
Wiggy's numbers should look better for September because his employee expense will be reduced...but I'm sure the CU will still be in the red.
What happened with the election? Did staff ever file a letter with the DFI? When was the last time P1 was audited by the DFI? If it's been 12 months or more their day of reckoning isn't far off.
The election ended and they should be announcing who won. This election shows just how much Diedra and Wiggington tried to control this election. Its more proof of their dishonesty. I am wondering if the staff ever contacted the DFI. Im sure the terminations scared a lot of them. Under the law, the DFI audits the cu every year. You would think that would have been done by now. I wonder the scope of an audit and if the records that they review have been tampered with by Wiggington.
Since Priority One Credit Upon open its doors there has never been a lay off even during the great depression. . Never in the history of this credit union has anyone lost their job due to the credit union losing money and the credit union has never lost money in all the time the doors have been open.
Wigg jealousy has destroy us he has such a big ego that all he does is brag and yet he knows that everyone including Rodger hates his guts and that Mr. Harris was well like and respected by the staff and the members, well on the other hand Wigg is H A T E D by everyone.
Wendy has worked there a long time and Wigg used to walk with her and call her his little buddy, and like everyone else she got stab in the back.
Charles you are the biggest ass hole and trust us you will get yours.
Firing 5 people is going to have little impact on P1's losses. Deliquencies are high and loans are low. Not a good combination. They aren't getting enough loans to offset deliquencies. Charles is ignorant about the need to develop members. He thinks getting new members is the answer but that only makes your numbers look good. You need to sell them your products but Charles doesn't know how to do that. He probably hasn't gotten a report on who the good members are and marketed special rates and products just for them. Charles is in the wrong business and that little badge of his with the words just ask, what a stupid idea. Very first grade.
Today Wigg walked around talking on the phone on personal calls with no care in the world. Of course not he's got the coo to do his work and Roger and the staff. What a loser.
This is why he didn't let us post the financials at the branches in April May or June. He knew the credit union is going downhill but he got mad because this blog keeps outting him. He did tell Manny to post the financials sometime in July after a complaint was filed with the dfi. I know for a fact he lied to the dfi about the financials being posted.
Where in the report did Wigg report the money spent to build the training room, buy furniture for the coo's office, and spent on the call center? I don't see it.
Wiggington stale dates delinquencies and reports expenses in categories where they don't go. He's been doing this for years even before he became pres. He does it to hide losses. What they need is a thorough audit by the state instead of auditing a few specially picked files.
How much does Wiggington earn?
Yesterday Diedra had the board meet away from South Pasadena office? Whats she trying to hide now?
Wiggington always used to say that when he made CEO the board would pay him $200, or better that he would not take it for less that with his background and what he had to offer that the board had better pay him that kind of money or he would walk.
He didn't get the $200,000 he thought he was worth and he didn't walk either. Just another big mouth statement from a big moron. Even $50 bucks would have been too much to pay that jack ass.
Its going to be impossible to save P1 without getting rid of wiggington. As long as he stays the credit union will go down. He is lazy and ignorant and wants someone like the COO and everyone else to get results. If you remove him you not only get rid of P1's problems but they will save a whole lot of money. The only thing that stands in the way of doing this is Diedra. That old hag should have been kicked out a long time ago. If she had been the cu might not be in trouble.
I just can't see how getting rid of 4 employees translates into enough money saved to help the credit union. One employee was an auditor and the other took care of the ATM's. Lets say their combined salaries were $90,000 a year. One was the DMV specialist and the other a clerk. Lets say their combined salaries were $75,000. That's $165,000 a year for all 4 salaries. With losses of at least $80,000 a month plus growing delinquencies including home foreclosures, how will saving $165,000 a month reverse all the losses that came from Wiggington's mistakes? It doesn't impace enough. Now if you did fire Wiggington who lets admit, has no purpose, then you cut-back about another $100,000 to $125,000. Now that's a savings and a big one.
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