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SHOWN TO THE RIGHT, ARE THE CONTENTS OF THE 11/27/12 LETTER SIGNED BY PRIORITY ONE CREDIT UNION PRESIDENT, CHARLES R. WIGGINGTON, SR. IN COMPLIANCE TO THE TERMS OF SETTLEMENT AGREED TO BY THE CREDIT UNION AND A MEMBER WHO SUED THE CREDIT UNION, ALLEGING THEIR WILLFUL VIOLATION OF THE PRIVACY ACT.

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Showing posts with label terminations. Show all posts
Showing posts with label terminations. Show all posts

Saturday, November 7, 2015

Does Character Matter?, Part 1 of 2

Under a Microscope


You may have noticed that some of our earliest posts are being republished. The reason for this is because we've initiated a review to primarily correct formatting issues that occurred when we changed publishing platforms in 2013. At no fault of our own, some of the posts could not be simply updated and required being republished. 

Our review provided an opportunity to reread information we published over the past six years. One unexpected result is having re-discovered incidents that we'd forgotten about and realizing the accuracy of some of our earliest warnings about what might happen if Priority One Credit Union's President, Charles R. Wiggington, Sr.'s behaviors and abuses were not reined in. 

We've also re-discovered that from the date he became President on January 1, 2007, Charles R. Wiggington, Sr. chose to intentionally neglect security protocols designed to protect credit union and member assets. It is this disdain for protocol that we believe culminated in a series of vault thefts of cash at the Los Angeles branch during the years of 2010 through 2012, which totaled more than $1 million

Having spent days and many hours rereading our posts left us even more perplexed as to why the Board of Directors and actually, it's Board Chair, Diedra Harris-Brooks, has fought so fervently to ensure Charles R. Wiggington. Sr. remains President and CEO. What is also evident is that the theft of $1 million in cash would never have occurred had the Supervisory Committee under leadership of its Chair, Cornelia Simmons, chosen to carryout their assigned responsibilities.  The thefts were avoidable and though CUMIS, the insurance carrier, has filed a lawsuit accusing the external auditor, Turner, Warren, Hwang and Conrad of negligent auditing practices that they allege, caused the thefts to go unnoticed, the fact is, if Priority One Credit Union had ensured all security protocols were being performed, the thefts would have been discovered early on. 

What CUMIS and Priority One hope a court will believe is that Turner, Warren, Hwang and Conrad, who were contracted to perform annual audits, failed to discover that thefts were being perpetrated, allegedly, by a single AVP. What they hope to avoid is the responsibility the credit union had to ensure all security protocols were in place and being performed; and draw attention away from the fact that the Supervisory Committee, the Board of Directors, the President, two former COO's, the CFO, and the Accounting Department never noticed a discrepancy between the Los Angeles branch's vault records the Accounting Department's records. 

The credit union has remained unusually quiet about the AVP, who allegedly absconded with $1 million in cash. If security measures were being practiced, then how could one woman enter the vault each week over a 24-month period, and abscond with more than $1 million. We're certain other credit unions would like to know how this was done so that they can implement measures that would deter this from occurring at their organizations. 


THE ALLEGED THIEF

And what has happened with the case against Pearl Lynnette Fortson, the AVP, who allegedly and single-handedly perpetrated the theft of more than $1 million without being observed by any of the tellers, FSR's or receptionist assigned to the Los Angeles branch.

A search of the Superior Court's records show that her bankruptcy filings continues under review. We've yet to find anything indicated that she's being prosecuted or that she was ever arrested. CUMIS has clearly not demonstrated the level of aggressiveness shown against the external auditor, Turner, Warren, Hwang and Conrad who they hold responsible for the thefts despite the conspicuous fact that the external auditor was not involved in the perpetration of any of the thefts that occurred during the years of 2010 through 2012; nor was the external auditor responsible for ensuring security protocols were being maintained. At present, the former AVP is scheduled to attend a status conference regarding her bankruptcy filing. The conference will take place on January 28, 2016, at 8:30 a.m. in department 58 at the Superior Court of Los Angeles, California to 


EMBEZZLEMENT 

According to the credit union and CUMIS' statement to a reporter, the thefts were carefully camouflaged by Ms. Fortson who allegedly altered the vault's ledger. So does Priority One accept in faith the accuracy of everything that is entered into vault ledgers without conducting verification procedures? 

In reviewing past posts, we've rediscovered that during the May 2009 Annual Meeting, the President stated that he was reducing spending, "streamling", and "working smarter." His chronic failures and a series of large thefts occurring at the Los Angeles branch suggest that he knows nothing about "working smarter" and his alleged expense reductions have come at a cost to the workforce who continue to be subjected to a more than five-year wage freeze and who are rarely promoted while the President's so-called efforts are designed not to affect the salaries and benefits paid to credit union executives. Currently, the President continues to receive more than $150,000 per year plus annual bonuses. At Priority One Credit Union, the incompetent Board of Directors rewards incompetency and dishonesty and has gone out of its way to ensure that the man who was found guilty of sexual harassment in 2008, remains President and CEO.



PERSECUTION

Our recent review of past posts has rediscovered a large amount of information regarding past incidents occurring in the years since Charles R. Wiggington, Sr. was appointed President. Some of the incidents relate directly to Priority One Credit Union's security protocols and reveal that since January 1, 2007, President Wiggington has often refused to abide to credit union policies created to ensure the safety of assets and other incidents reveal the abuses perpetrated against employees who discovered that some of the credit union's officers had not adhered to required state and federal protocols and standards. 

The following account occurred at Priority One Credit Union's Van Nuys branch in 2007, the same year Charles R. Wiggington. Sr. began his appointment as President. 

The account consists of several incidents involving a new hired Branch Manager who was to oversee management of the Van Nuys branch. 

At the time the Branch Manager was hired, AVP, Rodger Smock, who is also the Director of Human Resources, issued fliers to all employees announcing the hiring of the new Branch Manager and descried him as a highly experienced and knowledgeable officer who would contribute to the success of the Van Nuys branch. 

Unfortunately, the highly competent manager would soon become a victim of President Wiggington's treacherous political system. What the following account reveals is that President Wiggington does not tolerate anyone who discovers that he and his staff have violated the credit union's own policies and state and federal laws laws. What the account also shows is that at Priority One Credit Union, dishonesty and incompetence are awarded and even protected as we witnessed in 2008, when evidence that the President sexually harassed a former employee, was squashed by the Board of Directors and the President's employment, retained. Here is the account: 

The Spider's Lair, Part 1, February 25, 2009



PUNISHING COMPETENCY
 Slander and Harassment 

In February 2007, Priority One Credit Union hired D. Centeno to replace former Van Nuys Branch Manager, Sylvia Perez, who had been promoted to Assistant Vice President ("AVP") and transferred to the Burbank branch. 

Director of Human Resources, AVP, Rodger Smock, produced and distributed fliers to all branches announcing the hiring of Mr. Centeno who according to Mr. Smock, possessed extensive banking experience and qualities which the credit union believed would contribute to increasing new business throughout the San Fernando Valley. Those who came to know Mr. Centeno described him as the consummate professional, possessing tremendous knowledge of banking procedures.

Under Priority One's procedures and policies, all new managers and before they can begin working at their assigned branch, must attend classes conducted at the main branch in South Pasadena. The classes orientate managers to the credit union's philosophy, mission, policies and procedures. Because of training, Mr. Centeno did not report to work at the Van Nuys branch for approximately 2 weeks. 

When Mr. Centeno did finally report to the Van Nuys branch, he almost immediately experienced difficulties with the branches two most senior employees, Neelam Verma, the Assistant Branch Manager, and Lillian Valladares, an FSR. 

The relationship between Mr. Centeno and the two employees grew strained when he discovered they were not following state mandated banking procedures and violating state law. What's more, they were leaving the credit union vulnerable to potential losses. 

Mr. Centeno also discovered that Mrs. Valladares was arbitrarily reversing NSF fees without first obtaining authorization from her supervisor. He also discovered that Mrs. Valladares had frequently failed to review mandated ATM and NSF reports. 

The two employees contacted Mrs. Perez who they had worked under for several years, and accused Mr. Centeno of being unduly difficult. Mrs. Perez grew irate because the issues Mr. Centeno discovered were all attributable to her. While serving as Branch Manager, she never taught her staff proper, state-mandated procedures. What's more,  she had allowed them to violate credit union banking policies. 

After Mrs. Valladares and Mrs. Verma complained to Mrs. Perez, the AVP drove to the Van Nuys office and during her meeting with Mr. Centeno, informed him that "the knowledge your brought from your former corporate environment will not be tolerated." 

Fueled by anger and we suspect, a fear that the credit union would discover that she failed to implement to provide her staff with the proper training and knowledge needed to carryout their assigned responsibilities. Mrs. Perez next launched a scathing attack against Mr. Centeno, fabricating accusations which disparaged his abilities and which AVP, Rodger Smock, allowed her to use in sealing Mr. Centeno's ouster. 

Mrs. Perez has established a well-earned reputation for having little self-control. She is known to be hyper, nervous, emotionally volatile, aggressive, impatient and highly vindictive. She also likes to declare that she is highly religious bit her alleged religiosity is not attested to by her behaviors. 


 BAMBOOZLED 

Despite the irrational response by Mrs. Valladares and Mrs. Verman, Mr. Centeno tried to resolve the differences with the two women but they refused, remaining uncooperative with their new supervisor. 

Mr. Centeno contacted Mrs. Perez and asked if she could schedule to meet with him, Mrs. Valladares, and Mrs. Verma in what he described as an effort to resolve the personnel problems he was experiencing. He also asked if the President and Mr. Smock could be present. Mrs. Perez told him she would contact the President and Mr. Smock and would call him back with a date and time when they could all meet. 

The following day, Mrs. Perez called Mr. Centeno and advised him that the meeting he requested would take place at the main branch in South Pasadena on June 18, 2007.

On June 18, 2007, Mr. Centeno arrived at the South  Pasadena branch and asked to go to the office of Rodger Smock. When he arrived in Mr. Smock's office, only Sylvia Perez was present. Mr. Centeno was informed that the President, Mrs. Valladares and Mrs. Verma were unable to attend. Mr. Centeno was informed by Mr. Smock that it had been decided by President Wiggington to end his employment immediately. He was handed a Warning Notice containing a list of allegations lodged against him by the credit union. This included an accusation that he failed to issue a performance evaluation in a timely manner for an employee named Lourdes. The notice, written by Mrs. Perez, stated that the evaluation was submitted 4 weeks late. On May 12, 2007, Mr. Perez allegedly ordered Mr. Centeno to produce a performance evaluation. The evaluation was completed on June 5, 2007, which is less than 4 weeks and thus not late. 

What's more, Mr. Centeno had been employed by the credit union for more than 90-days and under the credit union's procedures, he was to have received a performance evaluation no later than the 90th day of his employment. Obviously, Mrs. Perez was late and violated the same policy she was enforcing. What's more, Rodger Smock allowed Mrs. Perez to document allegations that were clearly untrue and failed to address Mrs. Perez's own violation. In a memorandum dated, January 8, 2008, issued by Vice President of Operations, Rodger Smock, and issued to "All Members of management and Staff", he stated: 
All performance reviews must be completed within a reasonable time frame following the end of the review period. Reasonable time frame is defined as 1-2 pay periods following the end of the review date. Completed is defined as performance review has been discussed, signed and original sent to Human Resources (copy should be given to respective employee).
Mr. Centeno did not violate the credit union's policy though Mrs. Perez clearly failed to complete her evaluation of Mr. Centeno in a timely manner. Furthermore, the credit union's own records prove that many managers issue performance evaluations long after the 4-week timeframe has passed.  Records show that often, evaluations are completed six to twelve months after they are due. 

Mrs. Perez's Warning Notice also accused Mr. Centeno of failing to respond in a timely manner to a complaint filed by a member who alleged her $200 deposit had never been credited to her checking account. 

The complaint was filed immediately after Mr. Centeno was hired and while he was in training in South Pasadena. He could not have been aware of the member's complaint. What's more, the complaint should have been responded to by either the Assistant Branch Manager, Neelam Verma, or AVP, Sylvia Perez. 

Mrs. Perez purposely alleged a violation of policy that Mr. Centeno never committed. What's more, Mr. Smock chose not to address the apparent distortions of facts presented by Mrs. Perez and suggesting that he was involved in a plot to terminate Mr. Centeno. 

This is not the first time the President and his cronies have conducted a sham meeting to persecute employees. The plot forged against Mr. Centeno is typical of President Wiggington's mode of administration which resorts to the use of unscrupulous and unethical tactics intended to disparage and wound employee reputations. 

President Wiggington has stripped away the dignity that once characterized the credit union and has transformed its former business environment into a soap opera saturated with intrigue and far flung backstabbing. 

MORE TROUBLE

Following Mr. Centeno's departure, an audit of the Van Nuys branch disclosed that Assistant Branch Manager, Neelam Verma approved five loans, all of which became delinquent and were referred to collections and some which were eventually, charged-off. The total amount of losses incurred from the bad loans approved by Mrs. Verma, approximated $45,000. 

Its important to remember that Mrs. Verma had been trained by AVP, Sylvia Perez, in the years while Mrs. Perez served as Branch Manager of the Van Nuys office. 

Mrs. Verma was assigned high loan limits by then Vice President of Operations, Charles R. Wiggington, Sr. It was Mr. Wiggington who never ordered training to Mrs. Verma so that she could understand the principles governing loan processing. Not only was she not trained to process loans, there was nothing in her experience or training that qualified her to serve as a Loan Officer.  The loans she approved were not properly screened to determine risk factors for each loan applicant. Furthermore, Mrs. Verma failed to perform federally-mandated processes as required under the Patriot Act.

When the problems with the loans approved by Mrs. Verma were discovered, President Wiggington and AVP, Aaron Cavazos, drove to the Van Nuys branch.

Though the mistake was Mrs. Verma's, the President found a scapegoat in a temporary employee named A. Gant. Mrs. Verma reviewed the loan applications and then ordered A. Gant to fund the loans. Because he was a temporary employee, his experience in loan funding was extremely limited. 

Nonetheless, President Wiggington informed A. Gant that he was being terminated for funding "bad loans." Mrs. Verma was stripped of her title but retained her employment without a reduction in pay. What is also peculiar is that A. Gant was not an employee of the credit union. He was employed by Stivers Staffing whose offices are located in Pasadena, California and temporarily assigned to Priority One Credit Union. Subsequently, he was not employed by Priority One, yet President Wiggington informed him that he was being terminated when the correct procedure would have been to inform Mr. Gant's actual employers- Stivers Staffing, that his assignment was being ended immediately.


A CHIP  OFF THE OLD BLOCK
THE FORMER BURBANK BRANCH MANAGER

Not surprisingly, Mrs. Verma wasn't the only officer of the credit union who despite little or no training in loan processing, was assigned exorbitant approval rights by Charles R. Wiggington, Sr. Like the incident involving Mrs. Verma, the following incident involves a series of approved loans which quickly became delinquent and were all eventually,charged-off.

In 2009, then Burbank Branch Manager, Linda Nisely, approved 4 automobile loans. Within a few months, the loans were deferred to Credit Resolutions. The department failed to procure the delinquent payments, forcing the credit union to charge-off the unpaid loans. 

The loans were issued to a man who visited the the Burbank branch and informed Mrs. Nisely that he was the owner of a San Fernando Valley dealership and wanted to obtain loan funding for some automobiles. Mrs. Nisely may have seen a wonderful opportunity to clinch a fast sale that would probably impress President Wiggington and so, she approved the loans. 

In the weeks that passed, neither Mrs. Nisely, the Loan Department and eventually, Credit Resolutions, experienced any success in reaching the member at the telephone numbers he provided when he funded the loans. 

Exasperated, Mrs. Nisely drove to the dealership but to her shock and dismay, discovered that the business address the member provided was to a business renting postal mail boxes. 

As in the case of Mrs. Verma, it was President Wiggington who authorized Mrs. Nisely loan limits. He never verified if she was qualified to make loan decisions but nonetheless, provided her with limits that should never have been given to her. His failure to train her, to test her abilities and knowledge and any other measures needed to ensure she was fully qualified to review and approve loan applications contributed to the incidence to even more losses to a credit union that since 2007, has lost millions of dollars in Net Income and lost more than 50% of its branches. 

On a side note, Mrs. Nisely was terminated in 2010, allegedly because the credit union was being forced to reduce spending. 

In October 2010, Mrs. Nisely filed a lawsuit against the credit union in which she alleged she had been subjected to age and race discrimination. She was one of the few White employees at Priority One. At the time, the credit union's attorneys of Richardson, Harman and Ober, informed their client that Mrs. Nisely's case had no merit. The attorneys and credit union began amassing a list of employees who would testify in court that Mrs. Nisely was a racist who hated Latins and who had been insubordinate and refused to participate in business development efforts. 

The case which allegedly had no merit was settled soon after Mrs. Nisely provided a copy of a letter written to Priority One's Human Resources Department by the former Valencia Branch Manager and described in detail that she had been victimized by then COO, Beatrice Walker, who created a hostile work environment, harassed and sexually harassed the Branch Manager and had even stalked her. 

What the letter proved is that the entire Board of Directors, President Wiggington, and AVP, Rodger Smock, and Human Resources "clerk", Esmeralda Sandoval, not only failed to investigate the Branch Manager's allegations but allowed a scathing campaign to ensue which eventually forced the Branch Manager's resignation. As a result of the letter, Mrs. Nisely's case was settled and a monetary settlement paid. Mrs. Nisely never called and thanked the Branch Manager for the letter which enabled her victory. 


To be continued........

. 














Tuesday, December 29, 2009

What does the future hold for Priority One?


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." 

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...

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. 






Sunday, September 20, 2009

Reaping What You Sow

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. 

In January, we warned that the credit union's future looks bleak. President Wiggington's efforts to achieve financial recuperation have come in the form of expense reductions- reductions that impact the financial livelihoods of non-exempt personnel. 

At the end of 2008, Priority One ended the year embedded in the RED. And though the amount of negative Net Income is decreasing, the credit union remains mired in the negative. Evidently, whatever remedial measures are being introduced by the President are insufficient to slow down Priority One's decline and so the chronically inept President has now resorted to desperate measures that are obviously designed to slow and possibly reverse, Priority One's downward momentum.

The credit union's executive and managerial sector has remained quiet, never breaching the subject of the terminations or expressing the slightest regret. Last week, an employee sent us the following message about the terminations:

"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:


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:

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:


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. 

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

Undivided Income
$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) 

D. OPERATING INCOME

Interest on Loans
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
$1,673,952.61

Miscellaneous Operating Income
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
$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

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. 





  
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