A DARK FUTURE
January 1st will mark the one-year anniversary Priority One Credit Union entered the RED all the result of President Charles R. Wiggington, Sr.'s incompetence and avarice.
The efforts to reverse the cycle of decline caused by the President have done little to resolve the far flung damages he's caused the once thriving organization. A $600,000 telephone system which he boasted would dispel the need for a call center and would in his words, "push the credit union into the 22nd century" have failed. The current plans for a call center have not only added another financial burden to the credit union but is being planned without an actual study being undertaken to determine if this will benefit or again, undermine the credit union.
His hiring of COO, Beatrice Walker, who is paid more than $100,000 per year, has yet to translate into growth and profit. Though one of her fortes, touted by the AVP, Rodger Smock, is that she possesses the ability to develop new streams of highly profitable income, we've yet to see anything that hints at sudden surges of new income. Furthermore, there is a stark inconsistency between what President says he is doing and what he actually does. His alleged expense reductions target in great part, employee salaries and benefits and a few weeks ago resulted in the termination of four employees. What's more, his "streamling" efforts are offset by increased spending. His projects which he always verbally guarantees, will succeed, have been implemented without first conducting research needed to determine their viability and as a result, have often proven unsuccessful.
A NEW ICE AGE
Even the ignorant Board has grown sufficiently concerned that they've issued a directive to the President, that he not interfere with COO, Beatrice Walker's plans to create profit.
They've made it clear that their faith lies in the COO and not in Charles R. Wiggington, Sr. The Board's orders have caused the President to withdraw and become more quiet though "more quiet" is not synonymous with completely quiet. He still talks too much. It's also been observed that he and the COO rarely speak to one another and that he quickly exits any department she enters and that he spends more and more hours in the confines of his office. In the meantime, a smiling Ms. Walker walks through the South Pasadena branch several times each day with Director of Credit Resolutions, Yvonne Boutte, in tow, gossiping loudly about the changes she intends to introduce to the credit union.
LOSING COUNT
Over the past year, the President has also tried to minimize the fact that account closures have increased while loan funding has decreased by blaming the national economy and unemployment rate. But not everyone is buying into his jive. A reader recently posted a comment which states that Priority One's Monthly Income Statement for the month of November 2009 provided erroneous and possibly even, misleading information. The comment states that losses incurred during the month of November were $100,000 higher than actually reported and allegedly, the President ordered the figures altered to reduce the impact of the credit union's immense losses.
WE SAW IT COMING
After more than 16 years of employment, CFO, Manny Gaitmaitan, has submitted his letter of resignation.
As we've reported in previous posts, his relationship with the President deteriorated to the point they barely spoke to one another. What's more, the CFO found himself ostracized and ignored by the entire executive body. So has Mr. Gaitmaitan said anything that could confirm rumors of why he'd leaving? As a matter of fact, he has. Here is some of the disclosures made to his loyal staff in the Account Department:
"Charles [Wiggington] wanted me to alter reporting. He wanted me to lower losses and increase profits. I can't do that. That's illegal."
"That woman [Beatrice Walker] wants me to break the law."
"Charles and Rodger don't talk to me anymore. I need to go."
Mr. Gaitmaitan's resignation recently prompted Board Chair, Diedra Harris-Brooks to exclaim during a Board Meeting that "He [Manny Gaitmaitan] doesn't want to be here anymore."
As we've reported in previous posts, his relationship with the President deteriorated to the point they barely spoke to one another. What's more, the CFO found himself ostracized and ignored by the entire executive body. So has Mr. Gaitmaitan said anything that could confirm rumors of why he'd leaving? As a matter of fact, he has. Here is some of the disclosures made to his loyal staff in the Account Department:
"Charles [Wiggington] wanted me to alter reporting. He wanted me to lower losses and increase profits. I can't do that. That's illegal."
"That woman [Beatrice Walker] wants me to break the law."
"Charles and Rodger don't talk to me anymore. I need to go."
Mr. Gaitmaitan's resignation recently prompted Board Chair, Diedra Harris-Brooks to exclaim during a Board Meeting that "He [Manny Gaitmaitan] doesn't want to be here anymore."
DELINQUENCIES
The following comment was posted on December 7, 2009, and concerns the credit union's increasing delinquencies:
ATTENTION ALL EMPLOYEES - UPDATE YOUR RESUME NOW...
ATTENTION ALL EMPLOYEES - UPDATE YOUR RESUME NOW...
So by the end of June, total DQs [delinquencies] were $4.7 million and they broke down like this;
30 days $1.2m
60 -180 days $3.4m
180 -365 days $1.3m
Fast forward to the end of September:
Total DQ is $5.2m ( a half mil jump in 90 days!)
30 days $1.4m (Hmmmm...)
60 -180 days $4.2m (bummer...)
180 -365 days $1m (probably dropped cause they charged it off)
If Wiggy says it's getting better, he'd be smokin some mighty fine stuff......
December 7, 2009 11:40 AM
We can only wait to see if the President's cut-backs will have sufficient effect to reverse increases losses.
FORM 9900
The following notice was recently published by the Credit Union League of California and Nevada on their web site regarding IRS Form 9900. Because credit unions are not-for-profits, information in their tax filings is available for inspection including executive salaries.
December 3, 2009
TO: CEOs of CA/NV League Member Credit Unions
FROM: Henry Kertman, Vice President of Public Affairs
SUBJECT: Media Talking Points Regarding IRS Form 990
Following recent revisions to IRS Form 990, group filings by state regulators have been discontinued and state chartered credit unions must now file individual forms. As part of the new revisions, state chartered credit unions are required to report information about CEO compensation and certain other executive staff. This information may generate interest from news media, and the League has developed the set of talking points below to help credit unions prepare for inquiries they may receive. As always, please feel free to contact me at hkertman@ccul.org for assistance with media inquiries.
Additionally, credit unions may wish to click here for the League TIPS Bulletin #09-58 on Form 990 Public Disclosure Compliance. League Director of Research and Information Rita Fillingane is available at ritaf@ccul.org to provide assistance with compliance issues.
I thought the following information interesting as it serves to drive the point home that the amount of compensation awarded a CEO is based on merit, accomplishment, ability, and what is deserved. These are suggested by the CCUL of how credit unions should respond to questions posed on Form 9900 by the IRS.
END OF AN AGE
It is unlikely that Priority One will ever return to the state of success it enjoyed under it's last competent President, William E. Harris. The cause to the credit union's decline lies in President Charles R. Wiggington, Sr. and Board Chair, Diedra Harris-Brooks, both of who have abused their authority and treated Priority One like their own personal business and piggy bank.
The reason why Charles R. Wiggington. Sr. was appointed President was skin color. At the time it was decided he would succeed Mr. Harris, Board Directors, O. Glen Saffold, Thomas Gathers, and Janice Irving all said "What Priority One needs is a Black President." Clearly, competency, a document record of achievements, and personal decorum were never factors considered by the Directors when deciding Charles R. Wiggington, Sr. was a perfect successor to Mr. Harris. .
Based on the credit union's performance over the past two-years, Priority One will end 2009, deeply immersed in the RED, attesting further to the gross ineptitude of the President and the entire Board of Directors. The President has proven to be just too deficient to hone strategies that generate sufficient business needed to amass profit and which are needed to offset burgeoning overhead. In spite of the fact, Priority One lies inundated in debt, the credit union continues to tout itself as a financial fitness center. Delusions of grandeur we dare say.
Though we hope the credit union will recuperate and even, regain its former positioning, it is highly unlikely that the cause to its problems- the President and Board Chair, are also going to be source through which solutions are found. The challenge which lies ahead that neither the President or Chair Person have the savvy to resolve are finding effective ways to reduce spending that doesn't tax non-exempt employee salaries, the actually reverses losses, the successfully streamlines spending, that serves to regain member confidence and brings an end to the embarrassing scandals willingly entered into by the President.
