Columbia Members Narrowly Retain Directors; Raucous Special Meeting Symbolic of Months of Angst

VANCOUVER, Wash. – After an at times ugly and contentious meeting that appeared to pit the employees of Columbia Credit Union against some of its members, the eight directors at risk of recall barely escaped with their seats in tact. Although Columbia had said it would start registering attendees to the special meeting at 1:00 p.m., half the back parking lot of the Hudson Bay High School Gym was already full at noon as credit union employees, other board supporters and the employees of Integrity Voting Systems, the firm Columbia hired to ensure the reliability of its balloting, milled around the facility the credit union had booked for the March 28 event. Most of the $619 million credit union’s employees present wore pro-board buttons or bright pink stickers supporting the board provided by the group Friends of Columbia Credit Union as they worked to both set up the audio visual and other systems for the meeting and to put out pro-board signs and banners. The Integrity Voting Systems employees wore burgundy vests to distinguish themselves from the crowd and busied themselves setting up two banks of computers that they would use to register meeting attendees and issue replacement ballots to the members who wished to change a vote they had previously mailed. Members receiving replacement ballots had their previous votes invalidated from the vote total in favor of the votes they would cast at the meeting. The first credit union members unaffiliated with Friends of Columbia began appearing about 12:30 at the gym’s main entrance, and they included some of the longest standing Columbia members. Lee Espinoza, a credit union member for almost 30 years, said she had come to make sure that the credit union would never become a bank. “It’s appalling what they tried to do,” she said, “Just appalling.” She described how her father had been involved in helping to getting the SP&S Federal Credit Union, Columbia’s predecessor, underway in the 1950′s and said he would have been completely opposed to the credit union becoming a bank. Espinoza referred to a previous fight, in autumn of November 2003, when the credit union membership had also narrowly voted in favor of changing its charter to that of a mutual bank. Although NCUA later invalidated that vote, the agency called it both illegal and unfair, helping to spark the effort to recall the board members who had voted for it. But not everyone shared her opinion. Right after Espinoza went in to register for the meeting, another Columbia member, coming out, expressed a different view. Although he declined to give his name, the member said he had come to drop off his ballot in favor of retaining the board, saying that although he opposed Columbia’s being a bank, he thought getting rid of eight board members in a single election was a bad idea. “We need people who are going to run the place,” he said. He explained he would have been more likely to vote four of the board members out than all eight. As for the meeting, he said he wouldn’t be staying. “We don’t get too many days like today in March,” he said, glancing up at the blue sky and sunshine. A Clear Divide Although there was no way to know how many members had dropped their plans to attend the meeting in favor of doing something outside, it quickly appeared that confirmed partisans for either side of the conflict made up the bulk of the members who came. The members who didn’t care about whether to recall the board seemed to have been the ones with better things to do on a sunny day in March. Because the credit union began registering attendees at 1:00 for a meeting that began at 3:00, many credit union members registered and then came back outside to wait in the sunshine or to run errands. Members of the two groups on opposite sides- Friends of Columbia, made up of supporters of the board, and Save CCU, which was pushing for their ouster – did not mix. Friends greeting each other as they arrived almost always belonged to one group or the other and most often the small knots of members from either side, each individual holding a red AGAINST sign and a green FOR sign with which they would vote on motions from the floor, simply ignored one another. But some attempted to reach out to better understand the other side. Thomas Matica, a Save CCU organizer stood in conversation with Shawna, a supporter of Friends of Columbia, for a long time, each trying to explain to the other why they looked at the controversy differently. Shawna, who would not give her last name for the record, argued that the Save CCU group had taken too negative an interpretation of the events surrounding the conversion vote while Matica maintained that the Board’s actions gave evidence that it no longer wanted to be a credit union board. In the end they agreed they would have to just look at the situation differently and parted amicably, but that was not the case everywhere. On the other side of the building, at the other gym door, Cathryn Chudy, an organizer with Save CCU, said she had handed a piece of the group’s literature to a member arriving to register, only to watch the man rip it up in front of her and throw the pieces on the ground. “I was a little shocked,” Chudy said later, “but I guess people are just really angry about this on both sides.” As the meeting time drew closer, gradually only a small group of reporters and photographers remained standing at the gym’s main door. Columbia had announced that the meeting would be closed to the media, citing obliquely the guidelines it had agreed to with the Washington State Department of Financial Institutions about the meeting procedures. But Scott Kinney, a spokesman for DFI strongly disagreed later that DFI had any intention of not having media attend the meeting. “If anything, we would have been more in favor of media attendance than against it,” Kinney said. Supporters of Save CCU had assured reporters that, at the first opportunity, they would make a motion from the floor to allow the media to come into the meeting provided they could be sequestered somewhere where they could not be considered voters. In the end that is what they did, according to Steve Straub, a key Save CCU organizer and former Columbia CEO. After the meeting debated and approved Straub’s motion to include the media, credit union employees – wearing their pink stickers in support of the board – ushered the reporters and photographers to an upper tier of the gym. A Tense and Sometimes Raucous Meeting Inside the sides remained as divided as they had been outside. Members filled the folding chairs that had been set up on the floor of the facility and almost filled the bleachers on either side. Friends of Columbia supporters gathered mostly on the right side and Save CCU supporters sat mostly on the left, and while there were some pockets of supporters of each side amidst the other, the room appeared divided in almost perfect blocks of uniform opinion. According to Integrity Voting Systems, some 1,100 members were in attendance. The substantive part of the meeting began with each side having 15 minutes to present its formal statement. Tony Ward-Smith, a long-time Columbia member, made the case for recalling the board, painting a somewhat lengthy analogy between the credit union and a school whose leadership had lost its way. Some in the crowd grew impatient with his presentation. “Forget the school, let’s vote!” yelled out one male voice. A couple of other boos and catcalls joined him. Several times over the course of the meeting Jan Stockton, chair of Columbia’s supervisory committee and chair of the meeting, asked the crowd for restraint, reminding the attendees that they were adhering to procedures to which they had agreed previously. At the end of Ward-Smith’s presentation, which had included the line, “let’s have a credit union board that wants to be a credit union board,” the Save CCU side of the room erupted into applause. Three Columbia members and business leaders in the community spoke for the Columbia board, each pointing to different aspects of the board’s leadership in making the credit union the success it had been so far and urging credit union members to “get the complete facts” about the allegations that had been made about the board. They collected applause from the Friends of Columbia side when they finished as well. Bruce Davidson, the only Columbia board member not facing recall since he had not been on the board during the charter conversion decision was the only board member to address the meeting. He put the pending recall of his fellow board members in the context of avoiding mergers, pointing out that in “today’s business environment, companies either succeed or they get gobbled up.” Keeping the board, he argued, is the best chance Columbia credit union members have of making sure that their credit union remains an independent institution, serving Vancouver and Clarke County. The board members facing recall sat in the front row of the Friends of Columbia side of the room, with their backs to the credit union members, rarely turning around. CEO David Doss also sat near the front and declined to speak or take questions from the floor. Colleen Boccia, a spokesperson for Columbia said that she had forwarded a question from Credit Union Times about why no other board members spoke but, as of press time, no response from the board had been forthcoming. The meeting then heard an hour of statements from members, each limited to two minutes, alternating between the two groups. Cathryn Chudy’s statement summed up many of the Save CCU sentiments. “I remind you all that it is in spite of this current board, not because of it, that we remain a credit union today,” she said to scattered applause. “If this board had had its way, we would be First Columbia Bank, as we speak. If this board had had its way, this special meeting would not have happened. It took a regulatory board, a judge, and the dedication and persistence and spirit and heart of many members, to force this board to do the right thing.” For their part, the Columbia employees attending the meeting largely made their presence felt during this particular portion of the program. More than half of the members who rose to speak on behalf of the board identified themselves as Columbia employees. One long time employee praised the board and urged support, arguing that “this board has true compassion for our employees. This board of directors approved the first employee incentive plan that Columbia has ever had,” she said, eliciting wild applause and cheers from the Friends of Columbia side of the room. “We are a family, members and employees and board,” said another Columbia employee during her two minutes, “and the family is under attack.” “They have made this about employees versus members and that is really very unfortunate,” said Lloyd Marbet, a Save CCU organizer. Straub agreed, and argued that the fears employees expressed had to have come from the credit union board and management, since Save CCU has never expressed anything but high regard for the efforts and work of the employees, Straub argued. The assembly’s atmosphere got noticeably uglier and even tenser when it became clear that there were still three people who had been in line to speak when the time ran out and Marbet, along with several other Save CCU supporters tried to get them one more minute apiece to share their opinions. Boos, hisses and catcalls filled the air at the suggestion and several members stood and waved their red AGAINST cards in the air, like they were flagging down taxis. Stockton had to try to several times to bring enough order to the room so that Marbet’s motion could be heard, seconded, and ultimately voted down. Some even on the Save CCU side voted against it as both sides tired of the proceedings. Part of the reason for the meeting’s frustration might have been that the hour-long session of two minute speakers had been interrupted at some length when Al Burnett, an 81-year old speaker for the Save CCU side, returned to his chair after his two minutes and complained of chest pains. An ambulance was called and paramedics carried Burnett out on a stretcher, to a smattering of applause from both sides. Burnett later returned to the meeting, apparently unimpaired. By the time the burgundy clad IVS employees entered the hall carrying their blue ballot boxes, it seemed clear to most in the hall that, whatever the outcome few, if any, minds had been changed by the meeting. Michael Cvek, a credit union member, admitted that he thought the whole thing had likely been a waste of time but said that he had given up the beautiful afternoon of his birthday in the hope of seeing the board lose. “It’s just the entire way they have handled this,” Cvek said. “It just turned me off so much and made me want to see them gone.” After the voting, IVS General Manager David Haines delivered the tallies and Stockton made each official by announcing the board member had been retained. As she reached the end of the list, the hall erupted in sustained cheering and applause from the Friends of Columbia side as people jumped up to their feet and waived their hands wildly and hugged each other. Others mobbed David Doss and the newly retained board members. Despite hopes from members of both groups that the meeting would end the controversy and the fighting, it seems unlikely to do so. In a prepared statement read to reporters after the meeting, Board Chair Karen Martel concluded: “We are an organization of continuous improvement,” Martel said. “And we hope that any members with continued concerns will stay with us and give us an opportunity to show that we are listening to our members and acting in their interests.” But when a reporter asked the board how much money had been spent on the effort to retain their seats, Martel pulled out another prepared statement: “I would like to respond to your question but, unfortunately, a group of disgruntled members have sued Columbia and the board and as a result of that litigation made it impossible for me to respond at this time,” she read, leaving another unanswered question hanging over the entire conflict. As of the end of the meeting it would appear that there are three key areas in the dispute which will need to be resolved in order to bring a measure of peace to the credit union. First, Save CCU still has litigation pending which could invalidate five of the credit union board members on the grounds that they have been on the board for longer than their allowed terms, according to the credit union’s bylaws. Save CCU lawyer Doug Schafer, who Columbia allowed to attend the meeting at the special request of the DFI’s lawyer, has said the group intends to pursue this line of litigation. Second, there is the whole question of money. At some point the board is going to have to reveal, perhaps if only as part of the discovery phase of litigation, how much it spent on retaining the seats of these eight board members. Analysts familiar with these sorts of corporate campaigns have put the costs, conservatively, in the tens of thousands of dollars. Third, the credit union will have to conduct elections for four of its board members whose terms expire this spring and board opponents have made it clear that they will run candidates for those slots. Despite their loss, board opponents have been tantalized by how close they came to unseating the board, especially given the resources the credit union put into this fight. “I’m really energized by this,” said Matica, “when you consider the amount of money spent and the way they manipulated this ballot was this the best they could do?” And Chudy, at the end of her statement at the meeting, seemed to predict the future. “And I pledge to you that regardless of the outcome of today’s vote, Save CCU will continue its effort to address these accountability issues until we have a board of directors whose actions will be both ethical, and accountable, to all voices in the membership,” she said, to strong applause from her side. [email protected]