Poles and Slavs Board Fight Hits the Courts; CU Hopes to Put End to Board Factionalism But Unclear That Will Happen

BROOKLYN, N.Y. – The infighting, which has long dominated and sometimes paralyzed the $1 billion Polish and Slavic Credit Union Board, has at last broken out into the open. Andrew Kaminski, a long-time board member with the credit union whose term does not expire until April 2007, has obtained a temporary restraining order preventing the credit union board from declaring his seat vacant. The restraining order didn’t work. On April 12, the $1 billion Polish and Slavic FCU announced that it had suspended Andrew Kaminski as a director pending the outcome of a court hearing about his temporary restraining order. “Mr. Kaminski has regularly caused disruptions in the orderly operations of the PSFCU throughout his terms on the board since 1996, cost the credit union’s members extensive legal and other costs to remedy the results of his conduct inimical to the credit union and its members, and embarrassed the credit union in the community and in the assessment of the credit union officials by the NCUA,” said Alex Storozynski, Chairman of the CU’s board. “Mr. Kaminski also hurt the credit union’s reputation with his controversial behavior triggering numerous and unnecessary lawsuits. “When I was elected to the board in the fall, the credit union had six lawsuits and the board and I have worked to settle four of these suits. We would like to end all of the lawsuits and focus on improving the financial services that we provide for our members, Storozynski concluded. The CU served Kaminski with a letter on March 30, 2006, charging him with six actions, which, the CU maintained, demonstrated Kaminski failed “to perform any of the duties as a director.” The six charges included, according to court documents: * alleged improper mortgages he obtained as a director in 1996 and 1997; * an alleged conflict of interest arising an $80 million lawsuit his wife, Bozena Kaminski, has filed against the CU; * allegations Kaminski has practiced law without a license; * allegations that Kaminski has failed to perform his duties as a Board Secretary adequately; * allegations that Kaminski has interfered with PSFCU’s relationship with its supervisory committee and NCUA; and * allegations of alleged improper use of CU e-mail. Since there is no issue of Kaminski missing meetings, the CU must prove that he has failed to perform his duties as a credit union director, something Kaminski firmly denies. Fight With A Long History The effort to oust Kaminski from the board and his countering in court are merely the most recent episodes in a turbulent and often nasty fight that has plagued the credit union board for years, according to sources familiar with the credit union who would not speak for the record and court documents. At its heart the fight involved a struggle between a faction of the board that was led by Kaminski and another faction led by a former board member. That fight mostly subsided, according to sources familiar with the credit union, after the departure of the other faction leader and the election of Storozynski to the board and then to the board chairmanship. Storozynski’s effort to reign in what some have characterized as board dysfunction, and reduce and eventually eliminate the number of lawsuits which the CU has been embroiled have only met with partial success, however, as some CU members and outside organizations have continued to allege wrong doing and other impropriety on Kaminski’s part. The straw that informed sources say spurred the board to action was the $80 million lawsuit filed, according to court documents, by Bozena Kaminski, the president of the credit union’s sponsoring organization, the Polish and Slavic Center. Bozena Kaminski’s lawsuit stems itself from an old allegation, dating back to 1996 and 1997 when, critics have long alleged, the Kaminskis obtained fraudulent mortgage loans from the CU. Kaminski and his wife contend that that these mortgages were, in fact, correctly obtained and that any confusion in them arose because of the ambivalence then present in the credit union’s own mortgage application, which was used to let members apply for both commercial and residential mortgages. But as part of the controversy over the mortgages, Bozena Kaminski contends that the CU did not safeguard her personal information adequately, allowing it to be leaked to the Polish language media where it was widely published. Kaminski has since called the $80 million figure “symbolic” and said she was open to negotiation. Sources close to the credit union claimed that the CU tended to view her effort as an attempt at extortion, which is one reason the board has sought to remove her husband from the board. For his part, Kaminski denied all the allegations, which he somewhat cryptically laid at Storozynski’s feet, saying that “everyone knows a fish rots from the head.” He also suggested that in his actions he was standing up for all CU directors who know what it’s like to be railroaded from CU boards because of some political fight. A further hearing on the restraining order is scheduled for May 17, 2006 and sources familiar with the CU expect it to continue until then and that the turmoil will probably continue. The organization Forum Organized to Protect Poles says it has collected enough signatures to call a special meeting of the membership to oust Kaminski, but the CU would not comment on the signatures. When contacted about the matter Darius Michalski, a longtime organizer with FOPP, said only that the best defense is the truth and that the CU only now had begun to see a side of Kaminski that FOPP, which has been involved with many legal disputes with him, has long seen. “Directors tested yesterday the same tactics Kaminski and his wife Bozena would use on us and many of their victims for many years,” Michalski said. [email protected]