A SHIFT IN POWER
Priority One has launched its new call center though without fanfare. This actually would have been the perfect opportunity for the President to declare future success, but as is typical with Charles R. Wiggington, Sr., missing the right opportunity seems to be just business as usual at the financially troubled credit union.
President Wiggington's leadership limitations aside, in recent weeks we've noticed a pronounced change of his authority. We noticed subtle changes at the start of August, which became more and more markedly noticeable with each passing month.
We've also observed that COO, Beatrice Walker's authority has conspicuously increased and that she's taken more and more control over sectors of the business once selfishly clung to by the President.
The Board of Directors under leadership of Chair, Diedra Harris-Brooks, recently ordered the President not to interfere with Ms. Walker's plans. He was informed that Ms. Walker's plans as described to the Board, will reverse the financial problems caused by the President's poor business decisions and will introduce effective streams of income which in turn, will produce desperately needed profit. Obviously, Ms. Walker has done more than just win the trust and support of the Board, she's convinced them that the President is incapable of resolving the problems he alone created; and that she considers him a potential deterrent to her plans for success. .She might actually be correct.
However, Priority One's Board has proven to be both immensely inept and equally corrupt. Subsequently, can we trust any decision they make that is supposedly intended to improve business? The Board, unfortunately, is looking for a quick fix irrelevant of the source. And though the Directors oversee the direction of the credit union, under Diedra Harris-Brooks the direction is leading to decline. Can anyone point to another Board in the entire credit union industry who has behaved as irresponsibly or reprehensibly as has Priority One's Board?
The following comment was published in response to our last post and concerns the credit union's Loan Loss Provision:
"Between June 30 and September 30 Wiggy had to move another $500,000 into the Provision for Loan Lose account. They would only do this if they project another 1/2 million dollar lose [loss] or if they charged off that much during the quarter and need to replenish the account. Either way, it's the wrong direction. Now I'm starting to wonder if they will even make it to 2/22."
Since mid-2008, when the effects of reduced business became more evident, the President with the help of the Board Chair has expended tremendous time and energy moving money around including transferring funds from general ledgers and reporting these as profit when no actual profit occurred.
Another reader posted the following comment regarding warnings issued by CFO, Manny Gaitmaitan:
"The CFO has been warning Wiggington for many months that delinquencies are increasing too rapidly and the credit union is spending too much money. Wiggington got mad one of the first times the CFO warned him and later told the Bea and Rodger that the CFO is insubordinate and refuses to follow orders. Wiggington doesn't know the difference between insubordination and wisdom because he wants what he wants no matter who it hurts. Friday he had a meeting with the CFO and warning the CFO. The CFO left work early and didn't come in today. Priority is bleeding money and they are spending too much. They are supposedly a financial fitness center but they can't take care of their own business, how can anyone expect them to take care of member's money?"
Unfortunately, for the CFO, President Wiggington is a man devoid of understanding the nuances that work together to create new business, increase membership, produce profit, reduce losses, etc. He's also not a man who wishes to adhere to ethics and based on his behaviors, laws are something he feels do not apply to him. He shirks challenges, finding them insurmountable but receives immense gratification from constantly violating policies and laws. Subsequently, the CFO's refusal to violate mandated accounting policies are tantamount to insubordination and as a personal attack upon his person.
Another reader posted the following comment concerning the President's rampant spending:
"Employees, members, and readers of this blog can't even imagine how much money the credit union is spending. Its like they know they're sinking but just don't care. I don't get it. Maybe they can provide a comment explaining why they spend the way they do and where they are getting all the money."
The President will never provide an explanation for his confused business practices. Over the past two years, he's implemented a salary freeze that only impacts non-exempt personnel, the sector of employees who earn the least amount of money. And he recently terminated four (4) employees because the credit union desperately needed to reduce spending.
The President next hires a COO who being paid more than $100,000 per year plus benefits. He also purchased a $600,000 phone system and has now opened a new call center. Does anyone else get the impression that Charles R. Wiggington, Sr. is a man who has absolutely no comprehension of the difference between being cost-effective and wild, undisciplined spending?
EVERY PENNY COUNTS
Who would ever have thought that eliminating the purchase of Styrofoam cups would not succeeded in resolving Priority One's financial problems? At the end of October 2009, the amount of losses decreased though the credit union remains embedded in the Red.
Have reduced losses serve as an indicator that the President has finally derived solutions that are succeeding to drive down losses? We doubt it. The credit union's business development efforts continue to falter and there is nothing we can point to- at least not for the moment, that hints at why losses have slowed down. Furthermore, we don't trust President Wiggington.
The rift that has developed between the President and CFO, Manny Gaitmaitan, has spread with COO, Beatrice Walker, beginning to publicly criticize the CFO and like the President, labeling him uncooperative. Also siding with the President and Ms. Walker, is AVP, Rodger Smock, who has stopped speaking to the CFO. Yes, this is probably a dynamic more common in an elementary school yard but one President Wiggington has purposely created in his effort to ostracize Mr. Gaitmaitan. According to the President and COO, Mr. Gaitmaitan constitutes insubordination and is impeding the President's efforts to reverse the credit union's financial problems.
What the President views as efforts to resolve the credit union's financial problems is using deceptive financial reporting practices to create an impression of profits where none exist and reduce reported losses. Mr. Gaitmaitan refuses to follow the President's orders which has now resulted in him being branded and exiled from President Wiggington's inner sanctum. Through a combination of shaming and slander, the President may hope to either force the CFO into submission or driving him out of the credit union. We believe the President is trying to force the CFO's resignation.
Over the past 2 weeks, the credit union has receiving a large number of faxes and telephone calls concerning the "available" CFO position. According to the President who again, can't seem to guard confidentiality, the credit union is seeking a new CFO because Mr. Gaitmaitan has decided to resign.
We recently received two emails regarding a recent visit to the South Pasadena branch by consultant, Loren Lillestrand of Lillestrand and Associates.
On Thursday, November 19th, Mr. Lillestrand met with employees and spoke to them about attitude and perceptions towards their employer. Clearly, Mr. Lillestrand is trying to alter the current negative view employees have the executive sector and though we agree with some of what Mr. Lillestrand said, the fact is the consultant is not an employee of the credit union and in the end, his opinion is based on what he has been told by the President and his "friend", Beatrice Walker.
Ultimately, it is the management of any company that set the tone for the working environment. The President has chosen to slander employees and with the help of Human Resources, has at times created fraudulent evidence and charges used to seal the termination of targeted staff members. Mr. Lillestrand's advice places the burden of change upon employees while circumventing the executive sector's abuses which created the destructive dynamic which has developed at the credit union since Charles R. Wiggington, Sr. began his appointment to President.
Mr. Lillestrand's efforts are clearly guided by an agenda created by the President and the COO. If Mr. Lilllestrand hopes to introduce change, he must address the cause of the problem which is President Charles R. Wiggington, Sr. Since it is the credit union that is paying him, don't expect Mr. Lillestrand to direct his efforts towards any members of the abherrent executive sector. What's more, there is no internal problem that can be resolved in a few visits to any company.
During the credit union's last all-staff quarterly meeting in South Pasadena, employees were asked to provide suggestions on how to reduce spending. One suggestion asked that the executive sector voluntarily agree to reduce their salaries temporarily. AVP, Rodger Smock, and COO, Beatrice Walker, turned from where they sat at the front of the room and simultaneously stared at the employee making the suggestion. If the executive sector doesn't wish to hear suggestions, then don't ask for them!
The decision by some executives to voluntarily and temporarily reduce their salaries is a phenomena that is occurring in many companies throughout the United States. It is a selfless effort to help their employers during difficult economic periods where a company may be experiencing financial losses. The decision not only helps a company reduce spending but may help avoid laying off staff. Not so at Priority One where the greedy executive sector is not about to adopt any change that reduces their salaries or benefits.
The employee has now been targeted by AVP, Rodger Smock, and COO, Beatrice Walker, both of who have ordered her supervisor to scrutinize her work which they suddenly find subpar. Unfortunately, the prudent suggestion has offended the sensibilities of the executive sector who have placed her name on their "enemies list."
FINANCIALS FOR THE MONTH ENDING 10/31/09
The credit union's financials improved during the month of October 2009, though Priority One remains deeply embedded in the negative.
Anticipate 2010 to end in the negative, again. Many of the President's so-called expense reduction measures were only implemented recently and so they will have little impact upon the credit union's economic state through the end of the year.
The financial information shown below is an excerpt obtained from Priority One's Monthly Income Statement for the month ending October 31, 2009. We've annotated in red font those actuarials which we deem important and those we find questionable.
The references to education of senior management, Directors and Supervisors just doesn't make sense because none have participated in anything related to education.
And why does the credit union report spending on Ambassadors when the only payment issued to ambassadors is a $25.00 as reimbursement each time they attend meetings. .
The annual meeting is conducted once a year in South Pasadena and always, in the month of May. Why then, does Priority One continue to report monthly spending on a meeting which took place 6 months ago?
What Priority One most needs is an in-depth audit of all its financials. We believe the suspicious looking entries are just part of the President's way of shuffling around figures, to make the report more palatable to readers. .
MONTHLY INCOME STATEMENT
Less Allowance for Loan Losses
$ 106,778, 903.74
$ 2,468,259. 31
Education Expense - Senior Mgmt
Education Expense - Supvry Comm
Education Expense - Board Directors
Provision for Loan Losses
NCUSIF Stabilization Expense
Annual Meeting Expenses
Board of Directors/Supervisors
Mileage and Reimbursement
The credit union's financials, even when tampered with, prove this is a credit union that has been thrust into a state of failure by Charles R., Wiggington, Sr. When faced with the challenge of forging resolutions for what he created, he instead indulges in launching verbal campaigns asserting Priority One's revitalized business, plotting scathing attacks against employees, and hammering out outrageous stories about all he's accomplished and tall tales about some invisible group of ninja-like employees who driven by jealousy, are out to toppled his empire. It's all delusions of grandeur and a deep-seeded need to play the victim as part of his gambit to deter attention from his failures and abominable personal behaviors.
Wise men don't need advice. Fools won't take it.