Defining What's Normal, Part 1 of 3

Nowadays at Priority One Credit Union, headquartered in South Pasadena, California, "business as normal" has been displaced by fending off lawsuits. Its important to note that this dynamic did not exist at anytime during the 81 years preceding January 1, 2007, the date Charles R. Wiggington, Sr.  began serving as President and CEO of what was then a successful and growing Credit Union. 

Three lawsuits Priority One is currently litigating differ dramatically from those filed and voluntarily settled by the Credit Union during the years of 2010 through 2013. Those cases filed by four former employees and one Member, alleged violations of the Privacy Act, sexual harassment, same-sex sexual harassment, age discrimination, race discrimination, retaliation, and creation of a hostile work environment. The Credit Union paid out monies to avoid costly and potentially embarrassing court trials that would have produced documented records of abuses committed by the Credit Union's highest officers.

Two of the current batch of lawsuits, all filed in 2014, accuse the Credit Union and its President of various contractual related breaches while a third, filed by CUMIS, the Credit Union's insurance carrier, accuses the Credit Union's external auditors, Turner, Warren, Hwang, and Conrad of acting negligibly and failing to perform audits in compliance to established auditing standards. CUMIS also asserts that Turner, Warren, Hwang, and Conrad provided the Supervisory Committee erroneous information which in turn, compromised the integrity of the committee's annual performance assessments. CUMIS insists that the failures perpetrated by Turner, Warren, Hwang, and Conrad included not identifying thefts, perpetrated by Pearl Lynnette Fortson, a former AVP assigned to the Los Angeles branch, resulting in the theft of more than $1 million in cash from that branch's vault. 

As might be expected, CUMIS' allegations circumvent all reference to the Credit Union's and more specifically, the Supervisory Committee's responsibility to safeguard Credit Union and Member assets. Superficially, CUMIS' accusations seem absurd, eliciting questions about the actual theft and why so much responsibility is being placed on Turner, Warren, Hwang, and Conrad. Some of our questions are:  

• How could Turner, Warren, Hwang, and Conrad be held accountable for the physical removal of $1 million in cash from the Los Angeles Branch's safe when the Credit Union's Accounting Department, the Chief Operations Officer, and the Supervisory Committee are responsible for all records documenting money sent to and received from the Credit Union's branches. ?

• Why is CUMIS holding Turner, Warren, Hwang and Conrad responsible for thefts which occurred prior to their audit of the Los Angeles branch's ledgers? 

• Turner, Warren, Hwang an Conrad were hired by the Credit Union to perform audits. The Supervisory Committee and President, delegated instructions to the firm as what records were to be audited. Did the instructions they provided include a request to audit vault cash and general ledgers located at the Los Angeles branch? 

In a few weeks, the Credit Union will serve as a witness in CUMIS' lawsuit. The Credit Union will also be a defendant in a lawsuit filed Turner, Warren, Hwang, and Conrad and in another lawsuit filed by Auto Alliance, one of Priority One's contracted automobile brokers. . Because the President is named a defendant, he will finally have to appear in court and provide testimony concerning the Credit Union's internal controls and answer questions which will almost certainly scrutinize his abilities as President and CEO and possibly even touch upon his ethics. However, we wouldn't be surprised if he stages excuses to try and avoid or prolong, having to, participate in litigation. In the past the wily but cowardly President took refuge behind Board Chair, Diedra Harris-Brooks, who freely approved spending Credit Union monies to hire overpaid and unscrupulous attorneys and useless consultants to create bogus defenses concoct fictitious facades that tried in earnest to depict the President as a victim, incapable of the atrocities described in lawsuits.  

A TREK DOWN MEMORY LANE

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In 2013, a lawsuit was filed by a former Branch Manager, which cited egregious acts committed by and under President Wiggington, former COO, Beatrice Walker, and the entire Human Resources Department. President Wiggington was named a defendant but his attorney at the time, Paul F. Schimley, of Richardson, Harmon and Ober contacted the plaintiff's attorney and told her that if she didn't remove President Wiggington's name as a defendant in the lawsuit, he would have to file a motion with the court informing them that the President was suffering from cancer and undergoing medical treatments that he said would force postponement of the lawsuit for months and possibly years. . 

CUMIS VS TWHC

We;'re intrigued by CUMIS' lawsuit. Though Turner, Warren, Hwang, and Conrad did not perpetrate the actual theft of $1 million in cash from the Los Angeles branch's safe, it is their competency, expertise and reputation will will be dissected in court and which ultimately is a threat to their reputation. 

CUMIS' investigation concluded that Turner, Warren, Hwang, and Conrad are responsible for failing to detect any of the individual thefts during audits conducted in 2010, 2011, and 2012. Due to their gross oversight, eventually the thefts would amount to more than $1 million in cash. In their lawsuit, CUMIS alleges malpractice, a type of violation most often associated with lawsuits filed against attorneys and physicians. Oddly, CUMIS fails to cite an exact date when the thefts started, merely stating that they began in "early" or "late" 2010 and continued through the end of 2012. Why couldn't they provide a more specific date when the thefts occurred? Shouldn't they have merely stated that "the thefts began sometime in 2010?" 

Who is Turner, Warren,Hwang and Conrad? 

We visited Turner, Warren, Hwang and Conrad's webpage and discovered that in 2013, a peer review was performed by Caldwell, Becker, Dervin, Petrick and Company, LLP. and In a letter dated June 30, 2013, and written to shareholders, Caldwell Becker, Dervin, Petrick and Company concluded: 

"In our opinion, the system of quality control for accounting and auditing practice.... for the year ending June 30, 2013, has been suitably designed and completed to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects" and concluding, Turner Warren Hwang an Conrad ACE has received a peer review rating of pass."

Please note that the letter is dated only four months after the theft of $1 million was discovered by the Credit Union. Turner, Warren, Hwang and Conrad's website also contains the following overview of services they offer clients: 

TWHC's financial institutions practice provides a complete suite of services to credit unions of all sizes. Our credit union clients range from over $10 million to over $10 billion in assets. Our staff knows credit unions well. While the national firms we compete with call themselves specialists and the partner may have five or six credit union clients, our partners have in excess of 25 to 30 credit union clients each. 

We have a strong foundation built on our credit union practice. Our partners have worked for or with credit unions for over 20 years. We did not stumble onto credit unions or use them as filler time. We are dedicated to credit unions and have been from he beginning which is why we are ranked among the top five services providers to credit unions in the U.S. and are number one collectively in the states west of Arizona. 

:Source: https://www.twhc.com/about-twhc/peer-review/

Due to the length of CUMIS' lawsuit, we have decided to publish excerpts of only those allegations and statements we deem most important.  

As "subrogee", CUMIS has assumed the legal right to try and collect the monies paid out against the claim filed by the Credit Union. 

Former AVP, Pearl Lynnett Fortson, allegedly embezzled "at least $1,000,000" in cash, to wit, the amount was more than $1 million. She accomplished the thefts by allegedly "falsifying 'Daily Recaps", but how could the AVP, with or without accomplices, embezzle more than $1 million without detection by the Credit Union? Why did Priority One's internal controls designed to protect Credit Union assets fail to detect the thefts?

During the years of 2010 through 2012, Ms. Fortson's direct supervisors were COO, Beatrice Walker and later, CLO, Cindy Garvin, and finally, current Vice President of Operations, Yvonne Boutte. Over an approximate twenty-four period, why didn't any of the three overpaid and evidently, unqualified executives ever notice any of the several incidents during which money was embezzled? 

Turner, Warren, Hwang and Conrad's attorney may have told a reporter of the CU Times that Priority One never "expressed" disappointment with the services and decisions made by his client but the Credit Union's Supervisory Committee and CUMIS found sufficient evidence to conclude that Turner, Warren, Hwang and Conrad violated laws and provided fraudulent data that in turn caused the Supervisory Committee to derive erroneous conclusions about the Credit Union's actual performance. Since the Supervisory Committee is a governing body of Priority One Credit Union and because CUMIS' is the subrogee of the Credit Union, it appears Priority One was indeed, extremely disappointed with Turner, Warren, Hwang and Conrad's "actions." 

 

Under #19, CUMIS states that Priority One's Supervisory Committee is appointed by the Credit Union's Board of Directors and "tasked with the responsibility of obtaining an audit of the Credit Union's financials using an independent external auditor. But is the report provided from an "independent audit" the only source used by the Supervisory Committee to assess the Credit Union's performance and to gauge its ability to protect Member and Credit Union assets. 

Under #29, above, CUMIS states that during the years of 2011-2012, the Supervisory Committee was the recipient of Turner, Warren, Hwang, and Conrad's reports which provided findings obtained from audits; and similarly, Turner, Warren, Hwang and Conrad "expected" the Supervisory Committee to "rely on the thoroughness, accuracy, integrity, independence and overall professional caliber of audits it performed. Wouldn't it seem reasonable that a firm providing services to numerous Credit Union's and whose peer review cites an adherence to industry standards, make every effort to ensure the information provided to the Supervisory Committee was accurate and obtained from a thorough review of Priority One's records? 

Many past employees of the Credit Union can testify that documentation presented to auditors was always first reviewed by Executive Vice President, Rodger Smock, who was seen pulling out documents he did not wish presented to auditors. His censorship was intended to obstruct the disclosure of any information which could reveal breaches in procedure. 

CUMIS has chosen to accuse Turner, Warren, Hwang and Conrad of violating professional auditing and ethical standards and alleges the firm failed to properly examine Credit Union "books, records, and general ledgers." We expect the accounting firm to provide more than statements from the Credit Union that supports their accusations including providing lists of what documents the President and Supervisory Committee ordered to be included in any number of audits. Because as CUMIS asserts, Turner, Warren, Hwang and Conrad were hired by the Credit Union and paid to perform a service, was the accounting and auditing firm ever instructed not to audit certain credit union records?  Ultimately, it was the Credit Union who retained full control over what should and what should not be audited.  

It's seems more than a tad hypocritical that since Charles R. Wiggington, Sr. was appointed President on January 1, 2007, that the Credit Union has been sued several times and accused of egregious violations of state and federal laws, yet CUMIS and the Credit Union have no problem leveling accusations impugning the accounting and auditing firm and accusing them of violating "their professional auditing and ethical standards by failing to ever review or test the cash accounts at" the Los Angeles Branch.

In December 2009, then CFO, Manny Gaitmaitan, resigned but before leaving, confided to some members of his staff that he had been ostracized by President Wiggington; COO, Beatrice Walker; and then Senior Vice President, Rodger Smock, for his refusal to manipulate financial reporting." We hope that CUMIS is prepared to address questions regarding the Credit Union's reporting practices. 

 

In late 2009, TWHC conducted a three-week audit at the Los Angeles Branch and found that more than $60,000 had been stolen by a former receptionist. During the entire three-week audit conducted in a back office at the branch, AVP, Lynnette Fortson sat alongside auditor, Terry Nabors, while he examined Member and branch records. At the time, we found her inclusion in the audit both a conflict of interest and inappropriate but President Wiggington took absolutely no issue with her involvement. Could it be she sat alongside the auditor because she was concerned that he might uncover incidents that would reveal she was involved in the thefts of money? 

CUMIS accuses Turner, Warren, Hwang and Conrad of failing to count vault cash. Had they counted vault cash and reconciled those amounts with what was recorded in the vault's general ledger or reviewed the balancing sheets prepared by AVP, Fortson, they would have discovered the "fraud and embezzlement" committed by the AVP. Priority One has an internal auditor- Diane Huffman who should have been sent to each of the Credit Union's three remaining branches to audit records and count vault cash. Why wan't this done? And what about the responsibility the President, the COO, and the Accounting Department have to reconcile ledgers, balance sheets and cash records? 

CUMIS chose to pay out more than $980,000 against the $1 million claim filed by the Credit Union in 2013. We assume they agreed to pay the claim because their investigation proved that the Credit Union following all security protocols, yet this was the second large theft to occur at the Los Angeles Branch within a three-year period.  

• How did the Credit Union respond following the discovery in 2009, that a former receptionist absconded with more than $60,000 from the Los Angeles branch?

• What changes did Priority One introduce to its security procedures following discovery that more than $60,000 had been stolen by a former receptionist? 

We have to question CUMIS' wisdom. Why didn't the insurance company provide a more exact date when the theft of $1 million in cash began? According to their complaint, the thefts started either in "early" or "late 2010". Why not just state that the thefts began sometime in 2010?  We hope Turner, Warren, Hwang and Conrad have retained records showing what they were asked to audit. 

CUMIS requests the courts order Turner, Warren, Hwang, and Conrad to pay damages and all costs spent to file and litigate the lawsuit and any additional monetary relief deemed just and proper by the court.  

In his article, Strong Internal Controls Reduce Employee Dishonesty, dated August 20, 2014, Theran Colwell writes:

 "When a credit union catches an employee embezzling funds or committing other fraud, it must investigate and implement procedures to close the security breach."

Again, what changes did the Credit Union introduce following the discovery that more than $60,000 had been stolen by a former receptionist sometime in early 2009?

More importantly, why did the changes the Credit Union should have introduced fail to deter the series of thefts that started in "early" or "late" 2010 and continued, unnoticed, through late 2012?

In his article, Mr. Colwell also states: 

• Lead from the top with a written policy
• Create a system of checks and balances, including a clear segregation of duties
• Review cash-handling procedures and refresh staff training

Source: http://news.cuna.org/articles/39429-strong-internal-controls-reduce-employee-dishonesty

REVISITING THE 2013
SUPERVISORY COMMITTEE'S ADDRESS 

We are once again revisiting the Supervisory Committee's address which appeared int he 2013 Annual Report. The report was first distributed to attendees of the Annual Meeting which took place at Priority One's main branch in South Pasadena, California on May 27, 2014. 

The Supervisory Committee's Chair composed her address in 2014, approximately one year after Priority One discovered the theft of $1 million from the Los Angeles branch's vault. And though the series of thefts took place during the years of 2010 through 2012, the Supervisory Chair included the name of Turner, Warren, Hwang, and Conrad in her address published in the 2013 Annual Report which was first distributed on May 27, 2014. 

Why would Ms. Simmons make reference to the firm if she knew that CUMIS had concluded that Turner, Warren, Hwang, and Conrad had been remiss in their audits and allegedly caused the Credit Union to lose $1 million in cash? 

In her address, Ms. Simmons states, "The Supervisory Committee has the responsibility of overseeing the internal and external auditors of the Credit Union", adding, "The external audit firm of Turner, Warren, Hwang & Conrad Certified Public Accountants and Consultants conducts a comprehensive annual financial audit with verification of member accounts each year." 

Three conspicuous facts standout:

#1: In February 2013, Priority One's Internal Auditor discovered that $1 million had been embezzled from the Los Angeles Branch's vault. 

#2: CUMIS filed its lawsuit against Turner, Warren, Hwang and Conrad in April 2014. 

#3: Ms. Simmons address to Members was published in the annual report first distributed in May 2014, one month after CUMIS filed its lawsuit.  

We've also reviewed several of the Credit Union's annual reports for the years preceding 2013 and failed to locate a single address signed by Ms. Simmons and which alludes to Turner, Warren, Hwang and Conrad or any other external auditing firm hired by Priority One. 

So why did Ms. Simmons reference Turner, Warren, Hwang and Conrad's name in the 2013 Annual Report? Ms. Simmons is clearly stating that her Committee relies on whatever findings are provided by Turner, Warren, Hwang and Conrad. Is her disclosure a feeble and all too transparent attempt to free the Supervisory Committee of all culpability in the theft of $1 million?

Priority One may be a state-chartered Credit Union but its assets are federally insured by the NCUA. We obtained the following excerpt Cornell University Law School's Legal Information Institute, describing the role of a credit union's Supervisory Committee. 

12 CFR 715.3- General Responsibilities of the Supervisory Committee

§ 715.3 General Responsibilities of the Supervisory Committee

(a) Basic. The Supervisory Committee is responsible for ensuring that the Board of Directors and management of the Credit Union-

(1) Meet required reporting objectives; and 

(2) Establish practices and procedures sufficient to safeguard member assets.

(b) Specific. To carry the responsibilities set forth in paragraph of this section, the Supervisory Committee must determine whether:

(1) Internal controls are established and and effectively maintained to achieve the credit union's financial reporting objectives which must be sufficient to satisfy the requirements of the Supervisory audit, verification of Member accounts and additional responsiblities. 

(2) The Credit Union's accounting records and financial reports are promptly prepared and accurately reflect operations and results: 

(3) The relevant plans, policies, and control procedures are established by the Board of Directors are properly administered; and

(4) Polices and control procedures are sufficient to safeguard against error, conflict of interest, selfing dealing and fraud. 

CUMIS' lawsuit places responsibility for the theft of $1 million on Turner, Warren, Hwang and Conrad even though it is the Supervisory Committee who is ultimately responsible for the implementation of internal controls that effectively protect Credit Union and Member assets. 

• So what corrective measures did the Supervisory Committee implement in response to the 2009 theft of more than $60,000 perpetrated at the Los Angeles branch by a former receptionist? 

• Why did the Credit Union's internal controls fail to identify any of several thefts perpetrated over the years of 2010 through 2012? 

• And how often does the Supervisory Committee convene and what records can they provide of the topics discussed during each meeting and the actions taken to improve Priority One's internal controls? 

On a side note, it's important to note in 2008, Cornelia Simmons along with Board Directors, Diedra Harris-Brooks; O. Glen Saffold; and Thomas Gathers, voted and won reinstatement of President Wiggington despite overwhelming evidence that he sexually harassed a former employee and following urging by the investigator that the President be terminated. .These attest to her ethics and ability to hone decisions based on a fair and impartial assessment of evidence. 

The Supervisors like the Directors, are ignorant and unable to carryout their state-mandated duties. They and the Directors depend on the President to interpret financial data contained in the Credit Union's financial reports. Does this at all seem like a conflict of interest and immensely inappropriate? It's time the Supervisors and Directors were administered tests to gauge their competency. And one has to wonder, why procedures developed and/or approved by the Supervisory Committee have continually failed to protect assets administered by the Los Angeles branch.

CONCLUSION

It doesn't take an expert or even an in depth study of Priority One's monthly, quarterly, and annual reports to realize that this Credit Union's issues run deep and are terribly awry. What should be seen as perplexing is that the President, his executive and managerial staff, the Board of Directors and the Supervisory Committee are all apparently so out of touch that they can't understand the relationship that exists between internal conflicts, security breaches, abuses of authority, dishonest business practices, and the Credit Union's struggle to acquire new business and membership.

CUMIS Insurance is hoping to that their accusations against Turner, Warren, Hwang and Conrad will possess sufficient merit and be so compelling that a a jury (which they've requested) will issue a judgment in their favor. 

However, CUMIS will have to contend with questions about the Credit Union's subpar security procedures which failed to stop the theft of $60,000 in 2009 and the theft of $1 million in cash during the years of 2010 through 2012. The looming question we have is how could the Credit Union's allegedly well-developed security procedures fail so miserably? 

Here is a record of some lawsuits filed against or involving Priority One since October 2010? 

1. Lawsuits filed by four former employees during the years of 2010 through 2013, alleged sexual harassment, same-sex sexual harassment, retaliation, age discrimination, and creation of a hostile working environment. 

2. The filing of a lawsuit in 2012 by a former Member which accused the Credit Union of violating the Privacy Act.

3. The 2014 filing of a lawsuit by Alliance Auto, one of Priority One's contracted automobile brokers, alleging a breach in contract. 

4. The 2014 lawsuit filed by CUMIS against Turner, Warren, Hwang, and Conrad and alleging it is the accounting firm's satisfactorily perform its duties compliant to established standards resulted in the loss of $1 million in cash stolen by a former AVP. 

5. The 2014 filing of a lawsuit by Turner, Warren, Hwang and Conrad against Priority One Credit Union.

The lawsuits are all symptoms of a bigger, more serious problem afflicting Priority One and indicative of why the once successful Credit Union is nowadays a smaller, no longer competitive, and disliked Credit Union. The internal turmoil saturating the Credit Union explains in part, why Priority One was forced to close 6 of 9 branches during the period of 2010 through 2014. The Credit Union has spent years, desperately raising its net capital all for the mere purpose of retaining their operation. In 2008, its net capital dropped down to almost 6% and at the time, both the DFI an NCUA informed the President that he had better find an immediate means by which to reduce expenses and raise capital. His closures, however, could not stave-off the continued decline in net income which dropped by approximately $22 million since January 1, 2007.

President Wiggington's business failures are exacerbated by his personal conduct which has been appalling and embarrassing. In 2008, an investigation proved he sexually harassed a former employee though fortunately for the President, his ally, Board Chair, Diedra Harris-Brooks, ignored and suppressed the evidence and led two other Directors and Supervisory Committee Chair, Cornelia Simmons, to vote for his reinstatement despite the fact the investigator urged his termination. 

In the end, a victory in court will be gotten by the attorney who presents the most convincing argument. For CUMIS, this isn't a slam dunk as they have chosen to continue a business relationship with an organization led by a notorious President and corrupt Board of Directors and evidently, ineffective Supervisory Committee. On the other hand, Turner, Warren, Hwang, and Conrad chose to enter into and maintain a business relationship with the infamous Credit Union and as of May 2015, their well-earned reputation in the industry is at stake.  

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THE 2014 ELECTION EDITION, Part 1 of 2

On February 28, 2014, the deadline ended for members of Priority One Credit Union to submit their nominations to run for a seat on either the Board of Directors or Supervisory Committee. Normally, nominees and incumbents hoping to be re-elected, would vie for a seat on either governing body so that they ensure the continued sound and stable operation of the credit union. Of course, the credit union's performance during the past 7 years reveals something is sorely amiss. The annual closure of branches since 2010 coupled by plummeting income and deficient marketing, indicates that qualified and knowledgeable officers are not currently occupying either the Board or Supervisory Committee. 

The credit union's Balance Sheet/Income Statements confirm that fees and charges levied to members now are a key source of income for the credit union while the closure of 6 branches in the past 4 years suggests reducing expenses has become critical to Priority One's survival. And though the credit union's capital remains high, the closure of branches coupled by a loss of more than $24 million in Net Income since January 1, 2007, clearly points to an inability to create a reliable and ongoing streams of income that generate profit, cover the costs of overhead, and which create the prospect for growth. Though Priority One's Board of Directors are the ultimate decision-making authority at the credit union and though they are responsible for directing and controlling the affairs of the credit union needed to ensure effective and efficient management, the current Directors have proven they each lack the competency and education needed to properly maintain the credit union's operation.

Certainly, President R. Wiggington, Sr. is a key cause for the credit union's continued decline which began when he was appointed President on January 1, 2007, however, it would have been impossible for his often horrendous and detrimental decisions to have ever occurred without the abhorrent incompetence of the Directors whose subservience to Chairperson, Diedra Harris-Brooks, has led to Priority One's apparently unstoppable deterioration. After all, its is Mrs. Harris-Brooks who in late 2006, urged the Directors to select Charles R. Wiggington, Sr. as the next President and CEO of the then thriving credit union. It was also Mrs. Harris-Brooks who aggressively pushed and won the reinstatement of President Wiggington following an 8-week suspension during which an investigation uncovered evidence he sexually harassed a former employee. 

It is also important to note that unlike other credit unions, Priority One's Board relies on the President and his executive staff to interpret the financial information they are provided. The Board's ignorance about financials and management and their compromising relationship to the President are critical component to Priority One's decline.  

THIS POST

Unless members submitted their nominations by February 28, 2014, Priority One Credit Union may not have an election. This phenomena of disinterest in the credit union by members began in the years after Charles R. Wiggington, Sr. became President though we believe the apathy towards the credit union was begun when Board Chairperson, Diedra Harris-Brooks, decided to interfere with the credit union's electoral process. In this post, we will show how the Chairperson's decisions and unwavering patronization of the President created an opportunity for the many debacles which have negatively impacted Priority One Credit Union since January 2007.  It is well-documented that Mrs. Harris-Brooks has exerted tremendous time, effort and credit union monies to ensure Charles R. Wiggington, Sr. remains President of what is no longer a competitive credit union and all at the cost to business, the internal operation, employee morale, and the credit union's very public reputation. 

To draw a reasonable parallel between the decisions made and actions taken by Mrs. Harris-Brooks and the credit union's ongoing failures, we've decided to publish documents she authored in which she describes her competencies and education and present these alongside facts confirming the credit union's actual performance during the period she has served as Board Chairperson. 

Over the past 7 years, Mrs. Harris-Brooks has ruled over a Board comprised of Directors who lack an understanding of the credit union's financial reports and whose subservience has allowed the Board Chair to exceed the state-mandated perimeters of her position. Here is a summary of some of the decisions authorized, enabled, and sanctioned by the Mrs. Harris-Brooks and her Board:

• In 2007, Mrs. Harris-Brooks also authorized the President to dismantle the credit union’s once prize-winning Marketing Department and it was also Mrs. Harris-Brooks who allowed the President to lay-off the department’s Director and instead, install a Marketing Committee comprised of credit union employees all inexperienced in marketing.

• In mid-2008, Mrs. Harris-Brooks led the Board into authorizing President Wiggington to borrow $20 million from the credit union’s line-of-credit for the mere purpose of plumping up the credit union’s net income which had begun to slip soon after Charles R. Wiggington, Sr. was appointed President.

• In 2008, an investigation of President proved he sexually harassed a former employee, however, Mrs. Harris-Brooks knew she could only continue to exact her control over the credit union if Charles R. Wiggington, Sr. remained in office. Literally suppressing and ignoring the evidence gathered by an investigator from EXTTI, Inc., Mrs. Harris-Brooks led a battalion consisting of Directors, O. Glen Saffold and Thomas Gathers, and Supervisory Committee Chair, Cornelia Simmons, into voting for President Wiggington’s reinstatement. Mrs. Harris-Brooks and her pack held the majority vote and won reinstatement of the guilty President. Charles R. Wiggington, Sr. returned to work and led the credit union into failure, ending 2008, 2009, and 2010 immersed in the negative.

• In early 2009, the President and Mrs. Harris-Brooks decided that there was a group of rebel employees residing within the credit union and that they must be ousted to bring an end to the criticisms regarding how Charles R. Wiggington, Sr. chose to do business. It apparently never occurred to Mrs. Harris-Brooks that acting ethically and focusing on business could have more effectively dispelled criticisms than launching a full fledged and very public witch-hunt. To resolve the issue, Mrs. Harris-Brooks authorized the hiring of Beatrice Walker, to serve as the credit union’s first Chief of Operations ("COO").  Ms. Walker arrived at the credit union on June 1, 2009. allegedly for the purpose of creating new streams of income, however, just prior to her arrival, the President divulged that the new COO would help target and vanquish his enemies. During Mrs. Walker's tumultuous 25-month stay, she wrecked havoc upon business, employee morale, and became the source of vicious gossip slandering numerous employees. However, her undisciplined need to control all things soon created a conflict with the President, the Executive Vice President, and eventually the Board of Directors. In July 2011, she was abruptly terminated for failing to fulfill her assigned responsibilities, for failing to bring an end to the President's detractors, and for defying the President and Board. Ms. Walker exorbitant spending failed to generate the amount of business she said would be reaped if she were allowed to implement changes without interference of the President. The Board eventually tired of her failures and became concerned about rumors regarding her sexuality. They ordered her to submit any proposed changes to policy and procedures or proposed campaigns, to either President Wiggington or Executive Vice President, Rodger Smock. Ms. Walker became incensed and complained that the "uneducated" Board was forcing her to obtain approval from the President and Executive Vice President, both of who she described as intellectually inferior. Unfortunately, for Ms. Walker, her murmurings reached the Board who ordered her ouster. 

• In November 2009, Mrs. Harris-Brooks, President Wiggington, and Director, Bobby Thomas, interfered with the electoral process and manipulated what should have been a fair and democratic process all in an effort to retain the current Board of Directors who pander to Mrs. Harris-Brooks’ every whim. More on this, in April's post.

• Beginning in 2010, Mrs. Harris-Brooks and the Board authorized spending on refurbishing the appearance of the main branch in South Pasadena and the lobby of the now Burbank branch, believing these would draw new business and increase membership.  Two years after the refurbishments were completed, the Burbank branch permanently closed its doors.

• In 2010, Mrs. Harris-Brooks began authorizing the hiring of attorneys to defend the credit union against lawsuits filed by former employees and members. During the years of 2010-2014, the credit union spent more than $500,000 in legal fees.

• Since 2010, Mrs. Harris-Brooks approved the President's plan to implement drastic expense reductions to marketing and business development. 

• Beginning in 2010 and upon the advice of then COO, Beatrice Walker, Mrs. Harris-Brooks and the Board began implementing increased fees and charges to members. Not only has the credit union developed an addictive reliance on fees and charges as a key source of income, but it now resembles a bank more than it does a credit union.

• Since October 2010 and again, under Mrs. Harris-Brooks, Priority One has closed 6 of 9 branches.

• In 2011, Mrs. Harris-Brooks authorized the hiring of CLO, Cindy Garvin, who began working at the credit union on 8/01/11 and would be responsible for developing new  streams of income, jump starting lagging loan development, revamping the business development team, creating effective and cutting edge marketing strategies, and overseeing all of Priority One’s branches. At the time of her arrival, Rodger Smock  issued a memorandum to all employees, praising Ms. Garvin’s extensive past work experience. Despite the fanfare which accompanied her arrival, Ms. Garvin’s employment ended abruptly on 12/28/12, for allegedly failing to fulfill her assigned responsibilities.

• It is also Mrs. Harris-Brooks and the Board who have continually authorized the hiring of expensive consultants over the past 7 years and whose expensive strategies have failed to improve business. The changes suggested by consultants included administering tests in 2009 to determine the likes, strengths, and knowledge of all employees so that personnel could be assigned to positions where they would best serve the credit union. After more than $30,000, none of the findings were used for staff development. In 2012. upon the advise of consultants, the credit union revamped its webpage, introduced an app for smartphones and saturated the Internet with copies of President Wiggington's and Executive Vice President, Rodger Smock's biographies. The webpage, app and inaccurate biographies have evidently not helped bolster business. 

Clearly, Mrs. Harris-Brooks has proven to be an adverse influence and can't be excluded as a factor contributing to the credit union's inability to develop new business, increase membership, and service its vast territories. Prior to January 1, 2007, the credit union merged with several smaller credit unions and as a result, incrementally increased its physical size and Net Income. Since Charles R. Wiggington, Sr. became President and under the Board Chair, the credit union has been forced to close branches and is now unable to service its vast territories, prompting them to emphasize home banking services and Shared Branching.  

It is also Mrs. Harris-Brooks who authorized the spending of more than $500,000 on attorney fees during the years of 2010-2014, in an effort to both defend the credit union from prosecution against allegations its officers violate federal and state laws and to cover-up incidents of wrong doing committed by the President, Human Resources, and other members of the executive sector. It is also Mrs. Harris-Brooks who authorized the settlement of 3 lawsuits filed by former employees. In her zeal to retain the horrendous President on payroll, Mrs. Harris-Brooks and the Board compromised the credit union's relationship with the communities it serves along with SEG's, postal employees, chapters, and city chambers. 

How the Board Chair Ruined the Electoral Process

In recent years, Board Directors, Thomas Gathers and Janice Irving resigned while the remaining Directors have been in place for more than 7 years, though not because of their devotion to the credit union, competency, or keen intellect. To the contrary, they remain on the Board in spite of their incompetence. . 

In October 2009, Mrs. Harris-Brooks decided it was critical to ensure no one on the Board was voted out during the upcoming 2010 election. Her concern and that of the President was that any change could offset their plans for the credit union. At the time as exists today, the Directors were all subservient to Mrs. Harris-Brooks. At the time, Mrs. Harris-Brooks, President Wiggington, and then COO, Beatrice Walker concocted a scheme to ensure the Board remain unchanged.  

Under state law, the credit union is to inform all members in good-standing, about the impending election and invite them to nominate themselves to run for either a seat on the Board or on the Supervisory Committee. Though ballots had been mailed, the three officers decided to only publish the notice and invitation in the Credit Union's Winter Newsletter which is ONLY mailed to members who have a savings and checking account and thereby excluding the very large number of members who only have a savings account. 

Their plan may have worked had we not discovered it and exposed it on this blog. Though the electoral process had begun, the Board and Supervisory Committee held an emergency meeting in South Pasadena and determined that the failure to have advertised the election and invitation to members compliant to state law could result in sanctions against the credit union. And so, new ballots were printed and money again spent on mailing these to members. The officers not only caused the credit union to spend even more monies to repeat the election but they violated state law somehow believing that their ploy would go unnoticed.

Forced to hold a second electoral process, then COO, Beatrice Walker, and then Credit Resolutions Manager, Yvonne Boutte, told staff assigned to the Member Services and Credit Resolutions Department not to vote for incumbent Director, Janice Irving, whose seat had come up for re-election. In 2008, Mrs. Irving unwittingly provoked the ire of the President and Board Chair when she voted for termination of the President after reviewing evidence proving he sexually harassed a former employee. Upon his reinstatement, Mrs. Harris-Brooks informed the President that Mrs. Irving had been one of two dissenting votes. In response, the President declared, "I'm going to make sure she get out of here!" Unfortunately, for the President, Mrs. Harris-Brooks, Ms. Walker, Mrs. Boutte and the others, Mrs. Irving was not only one of the winners in the election but she tallied the highest number of votes amongst all the contenders. 

Another reason why Mrs. Harris-Brooks tampered with the electoral process is that at the time, she received a nomination from a former White Board Director. The former Director had been branded the enemy by Mrs. Harris-Brooks and the President in 2007 while he served on the Board. At the time, the Director, a White male, received an anonymous letter at his home exposing then AVP, Liz Campos, of kiting. The Director delivered the letter in person, to the office of then credit union attorney, William Adler. Mr. Adler contacted the President and Mrs. Harris-Brooks and ordered an investigation of the AVP's bank records. The investigation revealed more than 24 separate incidents in which she overdrew her Priority One checking account. The investigation also showed that she was not charged the customary and required non-sufficient fund fee. It was also discovered that she had been writing checks in amounts exceeding her balances drawn from accounts at two other institutions. At the time, President Wiggington adamantly denied all knowledge of the more than 24 separate incidents despite the fact that the abuses occurred while he served as Vice President of Operations. Evidently, he lied.

Mrs. Campos was terminated for violating federal law and the incensed President expressed his furor against the Director who delivered the anonymous letter to the credit union's attorney. The the termination was performed accordance to policy, the childish and obtuse President was incensed because he had hand-picked Mrs. Campos for promotion to AVP despite her well-documented abuses to her checking account. 

What's more, Mrs. Harris-Brooks joined the fray, calling the Director who exposed the incident into a meeting and chastising him in the presence of other Directors, for not delivering the letter to her instead of the credit union's legal counsel. She warned the Director that should he ever circumvent the Board again, he would be removed from the Board. Evidently, the delusional Mrs. Harris-Brooks forgot that she is not an attorney nor is she qualified to investigate allegations that federal laws have been violated. What's more, she lacks the objectivity or ethics required to conduct an impartial investigation. 

In 2008, attorney William Adler received a letter from a former employee, informing him she had been sexually harassed by the President for many years prior while he served as Vice President of Operations. Mr. Adler ordered an investigation during which the President was placed on suspension. During his 8-week absence, Mrs. Harris-Brooks ordered the President be paid his salary. Historically, all other employees of Priority One who have been suspended are suspended without pay. 

At the conclusion of the investigation conducted by EXTTI, Inc., the investigator submitted evidence proving the President sexually harassed the former employee and recommended Mr. Wiggington's termination. Mrs. Harris-Brooks fought the recommendation and along with Supervisory Committee Chair, Cornelia Simmons, and Directors, O. Glen Saffold and Thomas Gathers, voted and won reinstatement of the President despite the fact he violated federal law. 

It was also Mrs. Harris-Brooks who signed a letter to the former employee who filed the complaint and advised her that according to the Board's "understanding" of what defines sexual harassment, the President had not violated federal law, adding that the information compiled suggested that the employee had not only participated the sexualized gestures and comments from the President, but provoked him into sexualized exchanges. Mrs. Harris-Brooks not only squashed the evidence, she violated credit union policy which quite specifically calls for the termination of ANYONE found to have committed sexual harassment. What's more, Mrs. Harris-Brooks vilified the former female employee by insinuating that Mr. Wiggington's illegal actions were somehow encouraged by the former employee.  Mrs. Harris-Brooks' determination in the matter, actually her manipulation and distortion of the facts were a travesty though quite revealing of her actual character. 

Following his reinstatement, President Wiggington decided to avenge himself against those who had caused him to be suspended. He decided to install a Financial Planner at the main branch in South Pasadena. Not-so-coincidentally, the Director who delivered the letter to Attorney, William Adler, was also a Financial Planner employed by CUSO. The President hired the Director to serve as the credit union's first Financial Planner. Because the Director could not work at the credit union while serving as a member of the Board, the Director resigned his position. Two months after being hired, the Director was abruptly terminated for unsatisfactory performance. 

In 2010, following receipt of the former Director’s application, Mrs. Harris-Brooks immediately conferred with President Wiggington  and it was decided that they must impede the Director from being reinstated on the Board. Director, Bobby Thomas, offered to induct a postal carrier who would run for a seat on the board. Because Mr. Thomas was an officer of the National Letter Carriers Association, Branch 24 in Los Angeles, he assured Mrs. Harris-Brooks and the President that he would make sure postal carriers voted for his nominee and thus lessen the amount of votes that might otherwise be cast for the former Director. 

The scheme almost failed when Mr. Thomas' nominee failed to submit his application to run in the election, though the deadline was quickly approaching.  Concerned, Mrs. Harris-Brooks mailed a letter to the postal carrier reminding him of the deadline, an act she had never committed for any other potential candidate.  A few days following the deadline, the postal carrier arrived at the main branch and asked to speak to the President. The President who never meets with members, sent his administrative assistant to meet with the carrier. His assistant was handed a packet containing the member's application even though the deadline to submit the application had already expired. 

The application was handed to the President who giddily exclaimed, “I’ve been expecting this!” He immediately called Mrs. Harris-Brooks to inform her the application had finally been received despite it having been received  late.  

Mrs. Harris-Brooks, the President and Director, Bobby Thomas succeeded in disrupting the election. Though the former Director did not win a seat on the Board, neither did Mr. Thomas' nominee. However, their intent was to defer as many votes from the former Director to their candidate and in this they did succeed. However, the three never considered the ramifications their actions might have upon future elections. The President, the Board Chair, and Director Thomas, transformed what had traditionally been a democratic and unbiased electoral process into a joke. 

To identify Diedra Harris-Brooks' accomplishments and contributions requires first reading what she says about her competencies and education. Then all one has to do is simply compare what she writes about herself with what is documented in credit union reports. 

During the 2010 election, Mrs. Harris-Brooks' seat came up for re-election. At the time, she submitted the following biography, which we originally published on this blog on November 28, 2011 and written in the third person, describing her abilities, education, and hopes. 

“She has held the position [Board Director] for the past six years and is dedicated to her responsibilities as a volunteer.”

Mrs. Harris-Brooks alleged dedication to her responsibilities is certainly arguable. We've no doubt of her dedication but not for the well-being of the credit union or its members but to ensuring her whims are satiated and her continued control. guaranteed. As is well documented, Mrs. Harris-Brooks has far over-extended her authority exceeded what is defined under state law. She doesn't oversee the credit union's operation to ensure its sound performance, she is the one who decides what will be implemented and what will not. In fact, in 2007, prior to his suspension from the credit union, the President complained to Executive Vice President, Rodger Smock, that Mrs. Harris-Brooks was in his words "pushy" and "over-extending her authority." 

Beginning in 2008, Mrs. Harris-Brooks ordered that all advertising be presented to her and the Board for approval. At the time, she asserted that she as a former expert in marketing was most qualified to decide what promotions were acceptable for publication. 

Based on the credit union's lackluster performance as attested to by 6 branch closures is sufficient to draw a relationship between the credit union's ongoing failures and the Board of Directors who clearly don't comprehend the credit union's financials or management principles. A key deficiency of the Board is its blind subserviency to Mrs. Harris-Brooks and President Wiggington. This is certainly a reason why in 2007, President Wiggington described the Board as "not very smart" and why former COO, Beatrice Walker," labeled them "ignorant and uneducated."  

Furthermore, Mrs. Harris-Brooks' alleged dedication to the credit union was not attested to in 2008 when she suppressed evidence presented by an investigator from EXTTI, Inc. proving Charles R. Wiggington, Sr. sexually harassed a former employee. It was also not attested to in 2009, when it became public that the President ordered the repossession of a member's BMW and then transferred ownership of the vehicle to himself. At the time of the repossession, he circumvented credit union procedures and even helped create sham documentation to create the appearance had been sent to auction when in fact, he acquired it in defiance to ethics and credit union policy. Mrs. Harris-Brooks' interference with the electoral process in 2010 certainly dispels her assertion that she is dedicated to the credit union and her authorization allowing more than $500,000 to be spent on legal fees to protect the unethical President, corrupt Human Resources Department, and former COO, Beatrice Walker, from prosecution when they each violated state and federal laws, serves to discredit any claim by the Chairperson that she is genuinely concerned for Priority One's well being. 

While serving as Board Chair, the credit union's business has declined steadily year after year while the credit union integrity as an employer compromised and its public reputation, tarnished. Of course, nothing attests more to her dedication than does the closure of 6 branches since October 2010 and the more than $24 million drop of Net Income since January 1, 2007. Clearly, Mrs. Harris-Brooks needs to acquaint herself with what defines dedication. 

“Mrs. Harris-Brooks attended the University of Phoenix where she completed Business Management and Marketing courses holding a 3.5 GPA. Her knowledge in Marketing and computer skills has proven to be an asset to Priority One.”

If Mrs. Harris-Brooks achieved a 3.5 GPA in Business Management and Marketing Courses its certainly not attested to in the credit union's lackluster performance.. And one might have assumed that an alleged expert in business management would understand the harm that would be caused by eliminating business development, compromising marketing and member service, and by closing branches.  

She also fails to provide an example as to how her “knowledge in Marketing and computer skills has proven to be an asset to Priority One.” Priority One has been in a downward spiral since 2007 and as attested to by branch closures and the immense drop of its Net Income. Clearly her alleged knowledge in Marketing is highly suspect. And what computer skills is she referring to? Is she referring to Microsoft Word, Excel, PowerPoint, Access or Publisher? If so, how has her knowledge in any of these proven to be an "asset" to the credit union? We know the board room at the South Pasadena branch does not have a computer. We also know she doesn't have an office or desk at the main branch. We know she's never been seen using a computer when visiting the main branch. So we can safely conclude she isn't utilizing her computer skills while visiting the main branch. We also know that all Directors and Supervisors have free access to the Internet because President Wiggington authorized remote access to the credit union's network from their homes. We doubt Mrs. Harris-Brooks is working while at home, using her computer to access the credit union's network. If she is, then what is it that she does?   

“She began her career as a clerk in 1969 at the Inglewood Mail Processing Center. Promoted to management in 1985, she left a 20-year legacy of exceptional managerial service and earned the respect of her employees. Her promotions included Manager of Consumer Affairs, Business Center and Retail and was assigned detailed positions to Manager, Marketing and Manager Administrative Services.”

She omitted all evidence of her "legacy of exceptional managerial service" or proof she "earned the respect of her employees." With that said, we will either have to take her word on this or chalk it up to just more conjecture from a Board Chair who has not only manipulated credit union policies but has done all in her authority to cover-up wrong doing and business failures committed by Charles R. Wiggington, Sr.  

“Diedra continues to expand her knowledge of the operations of this credit union and is looking forward to continuing her voluntary services to the Board of Directors, Priority One Executive staff, employees and members.” 

The closures of the Valencia and Redlands branches in 2010, closure of the Riverside branch in 2011, closure of the Burbank branch in 2012, the closure of the Airport branch in 2013, and closure of the Santa Clarita branch in 2014, are conspicuously inconsistent to Mrs. Harris-Brooks statement that she is continuing to expand her knowledge of operations at the credit union. Its quite evident, she has not! Not only hasn't she learned anything from her many mistakes but she's exerted tremendous time, energy, and credit union money to hide the blunders she and the board sanctioned, though evidently her costly efforts to hide the truth failed. 

Mrs. Harris-Brooks' 2010 biography is riddled with generalizations.  Mrs. Harris-Brooks knows all too well that probably most members never read candidate biographies. Her statements about her competencies and education are not only unimpressive but lack any specificity that could show how her alleged qualifications relate to the post of Director and Board Chair and whatever it is she's accomplished. The fact stands, that irrelevant of what she wrote about herself, the credit union's current state and its myriad of operational issues more than suffice to prove she is ill-qualified to serve on the Board, either as a Director or as its Chairperson. 

In early 2012, the President proudly announced that a petition had been filed with the state of California to grant Priority One Credit Union a charter to do business in the city of South Pasadena, California.  The request was eventually approved and membership to Priority One Credit Union is now open to people living, working, and worshiping in the city of South Pasadena. 

Though Priority One is headquartered in South Pasadena, they have been unable to offer membership to people in that lovely city for many years. Prior to receiving approval to do business in South Pasadena, the credit union could only grant membership to employees of the United States Postal Service and employees of contracted SEG's and of course, their families. 

First of all, South Pasadena is a lovely city. It is also an old and up scale community where stately old homes stand amidst beautifully tree-lined streets. With exception of three supermarkets- Vons, Pavilions, and Bristol Farms, South Pasadena is the home of many businesses- mostly small, privately owned shops. The credit union's main branch stands alongside apartment complexes with no other business immediately near it for at least two blocks. Years ago, the credit union failed in a bid to install and ATM machine because citizens of the city thought the ATM could potentially attract crime to what is a very safe city. 

It must be noted that before President Wiggington could request a charter for the city of South Pasadena, his request had to be reviewed and approved by the Board of Directors. The President convinced them that an affluent city like South Pasadena would be wonderful source of desperately needed income. The Board Chair concurred, believing that South Pasadena might provide a rich source for new business despite the fact that the community has, as we stated previously, many small privately owned businesses. Vons and Pavilions are affiliates and they have their own credit union, disqualifying them as a source for new memberships. Bristol Farms is an upscale store but it has a small contingent of employees and is hardly a source for either new business or memberships. 

Despite limited resources from which to obtain new business and new members, Mrs. Harris-Brooks and the Board found it prudent to approve the President's request seeking a charter in the city of South Pasadena. Its nothing short of incredible, that President Wiggington believes South Pasadena will provide a wonderful source for new business. And if the President is no longer able to provide service to the Santa Clarita Valley, in the city of Burbank and its surrounding communities, in the many cities located around the Los Angeles International Airport and in all of Riverside County, then how can he believe the credit union can service the city of South Pasadena and generate the level of service needed to produce sorely needed income and profit?