Conference 7.286::dcu

   Gee, since we all helped pay for his Ferrari, do you think we could take
   turns driving it? 8*)

    Re .0
    
    Interesting. Another 2 good questions to ask Chuck on Wednesday,
    especially the 6.5% interest rate issue. I think I'll also ask if DCU
    makes special deals for the BoD as well as its president.
    
    Dave

    You know, if Chuck tells you he'll get back to you, you can let him
    know that you'll be at the next site visit and he can provide an answer
    then.  That way, everyone can know what the answer is.
    
    Steve

    
    RE: .1
    
    You want to drive around in those old junks?  He's probably got a 1992
    Lamborghini by now.
    
    RE:  .2
    
    Not sure the new Prez will be able to tell you much.  Wonder if any of
    the Directors will be accompanying him?  They would have reviewed and
    approved this.  
    

In today's Boston Globe, September 30, 1991, is an article detailing
how the director of one bank in Boston received a mortgage, in spirit,
that was not available to the public.

This director formed a trust, K&B Trust Co. with his wife as the
trustee.  The bank in turn made the loan to this trust.  Since the
bank was NOT making the loan directly to a director, it was not
in violation of any Federal/State law.  Like the DCU situation,
the mortgage was interest only!  I don't recall if the interest rate was
specified.
                                                                         
Mortgages and perhaps the actual note are recorded at the registry of
deeds.  It would be an interesting exercise to look at the mortgages of
the BOD memobers and see if the terms are "standard" or not (assuming
the property is not held in trust).  Again, these are public documents.  

Some members of the BOD are really doing the DCU and its members a great
service.  Those BOD members should be compensated.  However, the
compensation should be made public.  I apologize in advance if the BOD
members are really performing their duties with absolutely no form of
direct or indirect compensation.


Gim




                                                                       

   I bet  Chuck  will  appear at those meet-the-customer sessions bound and
   gagged  by  the BoD.  At first, before the gag policy from BoD, he might
   have  been  able  to  answer  some interesting questions.  Since the gag
   policy,  I'm sure he will not say anything of interest, tho there should
   be  somebody there to make sure he can't whitewash the BoD.  Anything of
   *real*  interest  will have to be submitted in writing to that office of
   oxymorons, the "communications dept".

   I also  bet  Chuck  will  be  alone.  From my speaking with him, and his
   complete attitude change after the BoD meeting that came up with the new
   policy,  I  bet  Chuck  is  a game player.  He sees the BoD as his boss.
   Anything  they  say,  he'll  do  whether  he  agrees with it or not, and
   whether  it's  against NCUA policy or not.  Gee, I should have asked him
   if  the  BoD made a policy requiring everybody in DCU to come to work in
   their underwear, what he would have done.  8*)

        The matter of "special" loans is one of the questions I asked in
        my "formal written request" that was mailed today.

    RE: .5
    
>This director formed a trust, K&B Trust Co. with his wife as the
>trustee.  The bank in turn made the loan to this trust.  Since the
>bank was NOT making the loan directly to a director, it was not
>in violation of any Federal/State law.  Like the DCU situation,
>the mortgage was interest only!  I don't recall if the interest rate was
>specified.
    
    Must be a "Schemes & Scams Quarterly" where one can get the latest and 
    greatest breaking ideas...  
    
    Thanks for pointing this out.  I'll have to find a copy tonight. 
    Sounds too similar to not check it out.
    

    ...you may wish to expand your activities to the state level...
    
    If memory serves, the Massachusetts State Treasurer (Crane?) received a
    MUCH LOWER-than-market interest rate mortgage from the bank in which
    the Commonwealth deposited significant funds.  It was publicly
    disclosed and not refuted.
    
    The voters reelected and continue to re-elect this man.
    
    What else is new?
    \Gary

    
>    If memory serves, the Massachusetts State Treasurer (Crane?) received a
    
    >    The voters reelected and continue to re-elect this man.
    
    I believe Joe Malone is the new state teasurer.  Problem solved.  I
    wish they were all this easy... ;-)
    
    But just because sleazy politicians do this, do you suggest we should
    stand for it in our credit union?  I, personally, do not accept the
    premise that positions of authority carry certain undisclosed
    privileges which result in greater personal wealth for the person
    holding the position of authority.
    
    But I wonder, was this lovely arrangement part of Mr. Mangone's
    employment contract?

    Re .9:
    
>   If memory serves, the Massachusetts State Treasurer (Crane?) received a
>   MUCH LOWER-than-market interest rate mortgage from the bank in which
>   the Commonwealth deposited significant funds.  It was publicly
>   disclosed and not refuted.
    
    I wouldn't want to cast any unwarranted aspersions upon Mr. Crane's
    name, but it was clear that his regime's mode of operation wouldn't
    stand close scrutiny.  I'd like to think that DCU members hold their
    leadership to a higher standard than the Massachusetts electorate has.
    
>   The voters reelected and continue to re-elect this man.
    
    Happily, Bob Crane chose not to run for re-election in 1990.  (Perhaps
    he heard footsteps approaching from behind.)  Joe Malone is something
    of a "loose cannon", but he's certainly been a breath of fresh air in
    the Massachusetts Treasurer's office.
              

    Re:  .10, .11   
    
    Thanks for the update!  That's good news!  
    
    re: .10
    
    >>>    But just because sleazy politicians do this, do you suggest we
    >>>    should stand for it in our credit union?  
    
    Of course not.  Did you think I was suggesting that?   [rhetorical
    question] 	I was just pointing out the similarity.....
    
    \Gary

    According to Chuck at the 2-oct meeting, loans to members, officers,
    and directors at a different rate are illegal.  Chuck didn't seem to
    know about this loan.  It worries me if it were in court documents and
    he doesn't know.
    
    If this loan was indeed illegal, who approved it?  The BoD must have
    seen it?
    
    Who is probing this matter?
    
    ARE we REALLY sure about the 6.5%  can we get verification.  How did we
    determine this number?
    ed
    

re: .13

I'm unsure of the accuracy of the 6.5% figure.  I saw the document that
showed the figures.  "Ballpark" the number looks around 6.5%, assuming that
there are no sliding interest scales, balloon interests, annual fees, etc.
Based on the amount of the principal, and the amount of the interest payment,
it looks kinda low.

    
    RE: .13.
    
    The mortgage balance on 4-30-91 was 790348.82.
    
    A mortgage payment of $4200 was made 5-30-91.  All paid to interest.
    
    The mortgage balance on 5-31-91 was 790348.82.
    
    
    Rough calculation:
    
    ($790,348.82 * .0638) /12 = $4202.02
    
    

    Re .13:
    
>   According to Chuck at the 2-oct meeting, loans to members, officers,
>   and directors at a different rate are illegal.  Chuck didn't seem to
>   know about this loan.  It worries me if it were in court documents and
>   he doesn't know.

    In fairness to Chuck, he's not part of the legal mess between the BoD
    and Richard Mangone.  I can easily believe he's trying to stay as far
    away from all that as he can.  (I would.)
    
>   If this loan was indeed illegal, who approved it?  The BoD must have
>   seen it?

    The BoD is responsible either way.  If it "slipped through" without
    their approval, then a direct violation of the bylaws has occurred and
    the BoD should have "called" the loan as soon as it became known.  If
    they approved it, then it had BETTER be at the same terms that any
    other member could have received.
    
>   Who is probing this matter?

    Phil. 8^)  Seriously, I don't know that anyone is.
    
>   ARE we REALLY sure about the 6.5%  can we get verification.  How did we
>   determine this number?
    
    Good question.

    Careful on the 6.5% figure.   The assumption, if I read this correctly,
    is that that $4000 payment was a whole payment.  It may only have been
    a particle payment.  Hold your guns until you have more information?
    ed
    

    
    Fixed a typo in the original....
    
    
================================================================================
Note 293.17                 Members, just like us???                    17 of 18
GUFFAW::GRANSEWICZ "Someday, DCU will be a credit u" 31 lines   3-OCT-1991 11:53
--------------------------------------------------------------------------------

>    According to Chuck at the 2-oct meeting, loans to members, officers,
>    and directors at a different rate are illegal.  Chuck didn't seem to
>    know about this loan.  It worries me if it were in court documents and
>    he doesn't know.
    
    This is probably good news because it mean he does NOT have one.  But I
                                                       ^^^
    certainly do wonder if there are any more out there.  This topic was a
    REAL hot button at the "informal discussions" with several of the BoD. 
    They consider all this their business and nobody elses.  I am concerned
    when we have to explain to our BoD why things of this nature are of
    interest to us.
    
>    If this loan was indeed illegal, who approved it?  The BoD must have
>    seen it?
    
    Who knows.  Maybe another "investment"...  ;-)  I'm sure they will call
    it a perk that they must pay any President.  Or it's a standard business
    policy, etc...  I'm sure there will be some appropriate rationalization
    forthcoming.    
    
    >Who is probing this matter?
    
    As many people or agencies as we can get interested.
    
>    ARE we REALLY sure about the 6.5%  can we get verification.  How did we
>    determine this number?
    
    I have a copy of Mr. MAngone's DCU monthly statement for May, 1991. 
    It's public record.  Anybody want a copy to file with their complaints?
    
    

    
    RE: .18
    
    Partial payment??  Why?  Do you think it is in default and the $4200
    was all he could afford to pay?
    
    The "assumptions" are based on normal loan payment procedures which are
    evident in the calculation provided.

    The number $4,200 seems too round a figure to be an exact interest
    payment. The balance seemed like an exact number. I would have expected
    the interest payment to be more "random" than 4,200.
    
    What $4,200 exact?
    
    Gim
    

>    The number $4,200 seems too round a figure to be an exact interest
>    payment. The balance seemed like an exact number. I would have expected
>    the interest payment to be more "random" than 4,200.
>    
>    What $4,200 exact?
>    
>    Gim
 
In the case of Digital Employees' Federal Credit Union v. Richard Mangone et al
v Digital Employees Federal Credit Union v Shearson Lehman Bros, Inc, the motion
"DEFENDANT RICHARD MANGONE'S MEMORANDUM IN OPPOSITION TO PLAINTIFF DIGITAL
EMPLOYEES' FEDERAL CREDIT UNION'S MOTION TO REMAND" contains Exhibit A, which
is the Statement of Account for Richard Mangone for the period ending 05-31-91.
In addition to the transactions in question in the motion, concerning DCU's
handling of proceeds from Defendant Mangone's ERISA-covered retirement plans,
there is also the account summary from a mortgage account, entitled "ADJUSTABLE
RATE FIRS Note" which shows the figures exactly as Phil posted them in .15.  
It's all a matter of public record now, since it's all contained in the exhibit.

Again, let's be cautious here people.  There's no such thing as a "normal
mortgage" anymore in these days of creative financing.  We don't know what
kind of points there are, whether there are annual, semi-annual, or payable
on completion balloon interest payments.  Additionally, we don't know how many
years the mortgage has been running, or whether the account balance represents
the principal of the mortgage, or whether it represents some combination of
interest charged but not paid plus principal.

On the face of it, assuming no creative financing and no special terms, it's
quite possible that the loan is in the 6-7% range.  But until someone actually
sees the loan contracts (two possibilities of that: fat & slim), we can't
say for sure what's what.

/Chris

    
    [Caution:  Unsubstantiated information follows.  Attempts will be made
    to validate these allegations.]
    
    I have received anonymous information that this loan is not the only
    loan of its type at DCU.
    
    Also, many who work at DCU are friends or relatives of those in power.
    
    This information comes from somebody who claims to have been on the
    inside at DCU.
    

People....

I did some reading over the weekend, and it seems to me that there is good 
chance that Mangone's loan may be misunderstood.  Before we go ballistic
here, consider the following...

I suspect that what he has is a 30 year adjustable rate mortgage, with a balloon
payment for the principal on the end.  Such mortgages do exist at very favorable
rates and can be had by the Average Joe, with 20% down, for right around 6.5%
currently.  This number might have been lower a few years ago.

Money magazine has a "numbers watch" column that tracks significant numbers.
They look at home mortgages, both adjustable and fixed, credit card interest,
T bills and treasury notes, etc.  Sort of like Barron's Market Laboratory, 
except published monthly and no degree in economics required to see how 
things work.  There are New England area companies currently writing ARMs on
$75,000 at 20% down, no balloon.  I'd easily believe that a big player worth
a few million at the time (like Mangone) could leverage big bucks with a 
balloon on the end - especially several years ago when all of New England
real estate was grotesquely over-valued.

There are still significant questions that must be answered.  We need to insure
that if loans like this were made to officers, that the same or similar terms
were available to credit-qualified members as well.  I don't know a thing 
about DCU mortgage policies, mortgage products, or recent rates as our house
is not financed there.  Anybody have any of this information?  Hmmm, maybe I
should write to Mary Madden and pay $0.25 a page for some DCU home loan
advertising :-).

Given the current open hostilities between the BoD and the membership, and 
the recent activities by the BoD to block requests for reasonable information,
it's easy to see scandal in every corner, and graft in every transaction.  It's
just another indication in the lack of confidence that many of us have in our
employees on the BoD.  But, until some of the curious looking items can be
fully investigated and verified, I would urge caution. Tough as it may seem,
we must presume innocence until guilt can be established.

/Chris

    
    RE: .24
    
    It is my understanding in speaking with the NCUA that loans that are
    not offered to members cannot be offered to officers or directors. 
    Since I have not seen these terms and types of loans in DCU loan
    brochures, why do they exist for Mr. Mangone?
    

On Friday, October 11th, Chuck Cockburn was at HL (Hudson MA).  He said that
ex-president Mangone didn't have a mortgage at a lower than normal rate.  I
thought he said that Mangone didn't have a mortgage at all, but perhaps I
misheard him.  (I'll post as much as I can remember from the meeting with
Chuck in another note.)

That same day, BoD chairman Mark Steinkraus invited me to come talk with him
about the "Mangone loan", among many other topics.  Mark said that Mangone
did have a mortgage, but it definately didn't have a 6% interest rate, it
wasn't a balloon mortgage, and in fact it had a rate and terms that were
the same as those available to any other member.  Further, Mark said that
the NCUA knows about the loan, and they could verify that it is ordinary.

I asked Mark whether he could provide some explanation of the numbers that
Phil reported in note 293.0, to explain why a calculation of a 6.5% interest
rate isn't correct.  Mark cited privacy laws as the reason why he couldn't.
He suggested a couple of possible reasons, though, such as for example that
the $4200 might have been a partial payment.  

One question that I didn't ask is why Mr. Mangone had a >$790K mortgage
balance in the first place.  Hopefully the answer (if it were legal to
give an answer) would be that he had a lot more income than the $140K/year
cited as his 1986 salary.  It still seems like an appallingly large
mortgage -- 1.6% of the whole $50M mortgage pool Chuck mentione, loaned 
to one person.  I wonder if there should be a dollar cap on the amount of
loans available to *any* member of the credit union, including but not
limited to directors and officers.


The remainder of Mark's and my discussion on the subject of Mangone's
mortgage loan revolved around the propriety of Phil entering note 293.0,
and of Phil and others (including me) mentioning it in email messages.

Mark feels that it was extremely improper of Phil to enter note 293.0,
for three reasons.  First, Mark said that it makes the entirely false
accusation that the BoD approved an illegal personal loan to the
ex-president.  Second, Mark suggested that forwarding such information 
in email messages is against corporate policy, so that Phil could get in
trouble by doing so.  Finally, Mark said that it was irresponsible (or some
similar word) to not check with the Board on the facts before publishing.
(Note: this is my summary of what Mark said;  I hope it is accurate.)

I told Mark Steinkraus that I can't agree with him on these points.
I know nothing about how or whether Phil tried to verify loan information,
but I told Mark that if he didn't, it was because the Board had taught 
Phil that they wouldn't answer such questions.  Mark feels that claim is
unjustified and unreasonable.  And yet, if public statements in this notes
file are correct, Phil and others have indeed tried to have other issues
(e.g. the election forms) resolved privately before posting information
here.  To the best of my knowledge, those questions remain unanswered to
this day.  So I don't see that it is fair to blame Phil for posting 293.0
without first asking the Board about it, if he indeed did not ask them.

As for the propriety of using email messages to publicize concerns about
the DCU BoD, I grant that it is very important to try to be as accurate 
as possible in any messages that are sent out, since one never knows how
far they will go.  But the same is true for factual claims made in notes.
I forwarded my own email summary of notes 293-296, and I used words
that made it clear (to those who read carefully) that I wasn't claiming
that it *was* a 6.5% interest rate, but rather that it looked like one --
and that I felt the Board ought to explain this.  And thus, I feel that
my message was perfectly reasonable.  I interpreted 293.0 in the same light.

Is the sort of message I sent a violation of Digital policy?  Maybe, I
don't know.  I do know that I would be allowed to say such things over my 
office phone, that my using email to say them didn't materially reduce the
availability of computer resources for business purposes, and that the 
company explicitly allows the existence of the notes files in which such
things can be said.  Further, and perhaps more to the point, I know that 
my managers don't object to this sort of activity.  I was threatened last
winter by someone who wanted to get me in trouble because of some messages
I sent out about a new Lotus product that I felt threatened my privacy,
but I checked with my managers and concluded that the threat was toothless.

So speaking for myself, I feel that the messages I have sent out are 
unlikely to cause me any employment trouble and are also ethically
appropriate -- provided, of course, that I equally publicize any other
pertinent facts that come to my attention.  Mark's and Chuck's flat
statement that this loan is completely ordinary is certainly pertinent,
even if it doesn't answer everything I'd wish to know about that loan.


Two final points.  The first is that, however much people are are angry or
frustrated, I think it is very important to try to enter notes and send
messages as professionally as possible.  Before entering a note, or making
a comment (especially when dissecting an earlier note), please stop to
think whether the comment is gratuitously offensive or emotional, and if 
it is, leave it out.  I don't think that means that we need to be entirely
dispassionate in notes -- I have myself posted some pretty graphic phrases
(more on that elsewhere).  However, my purpose was not to offend, but
rather to make my meaning and feelings very clear.  It does no good to
write a note so cautiously that no one understand what is meant.

And now my last point.  Mark Steinkraus assured me that, if anyone comes
up with information such as that in note 293.0, that he and/or the board
*will* provide an explanation if asked, or at least a response.  I asked 
if people should mail such questions to his personal email address, and 
he agreed that that would be appropriate.  ELF lists his email address as
PICKET::STEINKRAUSS.  I feel that we should take Mark at his word, and
invite his explanations of any other mysteries that anyone comes up with.
HOWEVER, I think we need to be careful to use this particular channel
sparingly -- I don't want anyone on the board to be able to claim that
there are a few people making repetitive requests, which was one excuse
offered for the "information protection policy".

	Enjoy,
	Larry

PS -- In the interests of speed, I did not check my recollection of 
meeting with Mark.  Mark, if I've misrepresented you in any way, please
post a correction, or send me a mail message.  Thanks, LS

    A search of this notes conference for any note authored by STEINKRAUSS
    turns up no notes at all. Yet we know that Mr. Steinkrauss has access
    to this notes conference and knows of its existence.  There are many
    notes entered in here asking for information, yet Mr. Steinkrauss
    hasn't responded to any of them.  So much for his willingness to give
    out information.

re .27:

Past communication has apparently all had Mary Madden's name on it.  Mark
told me, as he's said before, that he feels his job is to communicate with
all 88K members of the credit union, not just the subset who read the
notes file.  However, he said that the board plans to start entering notes
in the near future.

I was glad to hear it.  If he hadn't said that, I would have wondered why
he was talking to me one-on-one, if the notes file is too exclusive.  But
hey, different people prefer different modes of communication.  As an
engineer, I like notes and mail a lot, but not everyone feels that way.

Mark has a reasonable concern that notes that board members enter will get
picked apart with snide comments.  I've seen complaints about that method
of response in other notes files.  I told him that those of us who use
notes files have to accept that sometimes our notes will get attacked in
ways we consider unreasonable, but that those who read them can decide for
themselves who is being reasonable and who isn't.

There's a bunch of other stuff from my meeting with Mark, but I'll have
to post that stuff somewhere else, later in the week.  I guess I'll just
say here that while I don't know whether increased communication will
change anyone's mind about how to vote at the special meeting, I do hope
that it can help reduce the turmoil, which should help the credit union.

	Enjoy,
	Larry

PS -- If anyone doubts that board members read the notes file, when I went
to see Mark, he had printouts of a bunch of my recent notes, even the one
where I praised the handling of my auto loan!  There's nothing wrong with
that, of course -- I came with printouts of key notes, too. 

    I think that he can absolutely count on BoD notes getting picked apart.
    That will diminish if the notes are forthcoming.  It will increase if
    the notes appear to be disingenuous.

    A wish to communicate with all 88K DCU members is laudable, but since
    that hasn't been done, communicating with the subset that use this
    notes conference is considerably better than essentially nothing. And
    it will establish communication with those who are most interested.

Well, if the information in .0 is from the public record, or based on
computations from numbers found in the public record, how the heck is it
inappropriate to quote it here?

I was left with the distinct impression that the information in .0 are
Court records.

The information regarding the "Mangone Loan" came from a Statement of Account
for Richard Mangone.  This Statement, which was just an ordinary DCU statement
like those we receive each month, is labeled Exhibit A in a document entitled
"DEFENDANT RICHARD MANGONE'S MEMORANDUM IN OPPOSITION TO PLAINTIFF DIGITAL
EMPLOYEES' FEDERAL CREDIT UNION'S MOTION TO REMAND."   This Memorandum was 
one of the documents filed in Civil Action #91-1108-A, "Digital Employees'
Federal Credit Union (Plaintiff) v. Richard Mangone, Phoebe II Realty Trust,
Phoebe III Realty Trust, Mary Kilduff Mangone as Trustee of Phoebe II and III
Realty Trusts, John Does A,B,C, Trusts A,B,C (Defendants) v. Digital Employees'
Federal Credit Union (Trustee) v. Shearson Lehman Brothers, Inc (Reach and
Apply Defendant)."

The information regarding the loan is not part of the discussion in the 
memorandum.  Rather, a series of transactions involving the deposit and 
immediate seizure of Mangone's ERISA-controlled retirement plan.  

The Memorandum is a highly technical legal argument concerning the jurisdiction
of the federal court to rule or hold evidenciary hearings concerning the
seizure.  It also deals with the matter of artful pleading and the use of same
to disguise (the Memo's word) the seizure as an equitable trustee process cause
of action under Mass law.  My belief is that this memo is Mangone's attempt to 
circumvent the seizure of his ERISA-controlled assets by DCU by getting federal 
court intervention into the state Superior Court ruling.

My understanding is that information filed with a Court is in the public domain
unless placed under seal by a judge.  I have always made note posting decisions
based on such a supposition.  

/Chris

    
    Larry, I find this all quite amusing.  Mr. Steinkrauss could have at
    any time communicated with me the same way he chose to communicate with
    you.  Yet, he has chosen not to communicate at all.  The information
    in .0 is indeed part of the public record.  It is therefore entirely
    appropriate to be posted publicly.  I guess they just don't like any
    DCU information getting out that they can't "protect and control". 
    Hence, Mr. Steinkrauss' meeting with you.  I have welcomed and accepted
    EVERY invitation offered to me by DCU to meet with them, just ask Mr.
    Goralnick, DCU's Director of Finance and Operations.  For Mr.
    Steinkrauss to say I should have checked with them first, given their
    current information control policy is ludicrous.  Do they clear their
    glossy brochures through me before sending them out?  Mr. Mangone's
    monthly statement speaks for itself.  People can do whatever
    calculations they wish and make whatever assumptions they want.  But
    when the BoD take actions which result in people having little or no
    trust in them, they have nobody to blame but themselves when people
    assume the worse.
    
    In my 2 informal discussions with the BoD and their trusty lawyer, it
    has become very clear they do not wish to speak with people who have a
    reasonable amount of facts under their belt.  Quite simply, if you have
    facts, you're much tougher to BS.  Saying the loan is appropriate and
    then offering nothing FACTUAL to prove it, is more of the same "trust
    me" baloney.  Sorry, but that went out the door when Mr. Steinkrauss
    stated in 1987 that DCU wasn't investing in "speculative" investments.
    Mr. Mangone's statement will be included in written complaints to the
    NCUA and DCU will have an opportunity to provide the facts to them.
    
    If there has been one absolutely, consistent comment being made through
    ALL of this mess, it has been that something unusual couldn't possibly
    exist because the NCUA reviews this or that.  Or the independent
    auditors review this or that.  And you know, they are all MUCH sharper
    and more knowledgeable than any of us.  As a matter of fact, Mr.
    Mangone used statements along this line in an interview just months 
    before the NCUA shut down Barnstable.  If this were true, then the 
    NCUA would have seen something was wrong back in 1987 when Barnstable's 
    loaning practices were brought to its attention.  We must all review 
    and evaluate THE FACTS people.  Let's not make the same mistake our 
    BoD claims to have made by just blindly trusting others.  Too bad the 
    flow facts and information from our credit union has now been "controlled".
    

    So, Mangone didn't have a 6.5% loan because those monthly payments were
    partial payments.  And, this was a loan that any DCU member can get.
    You gotta love it.  Where's the line where you can get those regular
    loans at 10% which you only have to make partial payments on so I can
    hop in ...   half-;^)
    
    Steve

I agree 100% with everything you said, Phil -- except that I don't find it 
at all amusing.  Sad, ironic, depressing, tense, but not amusing.

Seriously, folks, I hope nobody thinks I was endorsing what Mark said.
I do think it's news and worth reporting that he told me that there is
absolutely nothing about the Mangone mortgage loan that differs from 
loans that ordinary members could get.  I'm trusting that the people who
read this file will apply commonsense and an appropriate degree of
skepticism to all statements (including mine).  

Now, Mark, it's your turn -- post a note here saying in your own words
whatever you feel you can say about the Mangone loan.  I know you will
read this -- answering will take less than 5 minutes.  Naturally, people
will question your words, as they question everyone else's.  Are you
prepared to accept that?  If not, that carries its own message, which I'm
sure everyone here is competent to interpret.

	Larry

PS -- In case there's doubt about my opinion on Mark's suggestion that
some of those who use email to attack the Board may find themselves in 
big trouble with Digital, let me put it this way:  that is a childish
way for the board to avoid accountability.  If they think there's false
data in the notes file, the notes file is the place to correct it.  

    
>I agree 100% with everything you said, Phil -- except that I don't find it 
>at all amusing.  Sad, ironic, depressing, tense, but not amusing.
    
    I refuse to let it get me down so I let my sense of humor prevail.  
    
    I don't find this whole mess amuzing but the obvious contradictions of
    these people is getting to be downright hilarious IMO.  Mr. Cockburn
    states he wants to communicate.  Mr. Steinkrauss says just call or
    write him.  And this at the same time they won't freely distribute
    information.  They seem to only want to communicate when they have to
    tell us something.  If we have questions, we are "inundating" them 
    with requests and sticking our noses where they don't belong.
    Sorry, communication is a two way street.  

> That same day, BoD chairman Mark Steinkraus invited me to come talk with him
> about the "Mangone loan", among many other topics.  Mark said that Mangone
> did have a mortgage, but it definately didn't have a 6% interest rate, it
> wasn't a balloon mortgage, and in fact it had a rate and terms that were
> the same as those available to any other member.  Further, Mark said that
> the NCUA knows about the loan, and they could verify that it is ordinary.

One has to be very careful on this one.  A definition of "ordinary"
could be one whereby a person of similar financials means requesting the
same loan would get similar terms.  In the extreme case, every person
making $140+ K and getting 6.5% loans could be construed as "the same as
those available to any other member".


I ran through some quick ratios.  Assumptions:

1. Person makes $140K per year.
2. Person can allocated 33% of pre-tax for mortgage.
3. Rate is 8% for 30 years.

Using these assumptions, the highest mortgage a person would qualify
for is $529K. Of course, the former president must have had other
sources of income.

At this point, the statement "the same as those available to any other
member" is meaningless without more details.

Gim

    
    Yes, words mean different things to different people.  Some would call
    this a loan, some would call it an investment.  ;-)
    
    We can go by what we have found on this statement.  I certainly don't
    expect DCU to disclose individual financial documents.  I was very
    surprised to find Mr. Mangone's statement in public records.  It at
    least raises many questions.  Now whether DCU or our BoD will answer
    them is an entirely different matter.
    
    Mr. Steinkrauss has told Larry that they wish I had consulted them 
    first before posting it.  I stand ready, willing and able to meet with
    any DCU management or BoD to discuss this and will gladly correct any
    incorrect information concerning this loan.  HOWEVER, they must also
    agree to meet without an attorney and to answer other questions related
    to this loan.  I want to make sure we know all there is to know about
    this and not just what they want us to know.
    
    

    If the much talked about payment was a partial payment, then why was
    the following month ballance identical to the previous month's
    ballance?
    

    Partial balancing?  ;^)
    
    Steve

        I quote the following from a letter from Mary Madden dated October
        7th 1991 in response to my written request for information [I will
        post my original letter, her response, and my comments elsewhere,
        once I don my asbestos gloves]:
        
        "12. No current or former Board member or employee has been
        granted loans on terms more favorable than available to the
        general membership."
        
        As much as I'm against what is currently happening within the DCU,
        I think that this statement of fact should close this matter for
        now. We also have Chuck's statement that any such loan would be
        illegal.
        
        The only remaining issue in this area is to replace the BoD, bring
        in a new auditor who understands credit union, and have them do a
        top-to-bottom audit of the entire DCU for the past several years.
        I think that it goes without question that anyone found to be in
        violation of the law, or mis-stating facts to DCU members should
        be fired and prosecuted as a result of that audit.

I would be very surprised if the loans were made at more favorable
rates to employees or board members.

However, the wrong question was asked.

>         "12. No current or former Board member or employee has been
>         granted loans on terms more favorable than available to the
>         general membership."
>         

Loans made to trusts and other legal entities are not considered loans
to individuals.  Hence, the DCU could  make loans to a trust controlled
by a BOD's wife, for example, at a very low rate and still answer
question 12 in the above manner.  This exact situation occurred with
Coolidge Trust where  a loan was made to a trust controlled by a
a BOD member's wife  for interest only.

The a more definitive question would be:


   Were/are any loans made to trust or other legal entities controlled in
   part or in whole by
           1.  current or former Board of Directors or their spouse
           2.  current or former officiers or their spouse
           3.  current or former employees or their spouse
   
   on terms more favorable than available to the general membership?

I would expect the answer to either  
1. No loans were made or 
2. There is will be a charge to research the answer to the above question.


Gim

    
    If we took DCU's "word" for everything, we wouldn't have any reason to
    be asking for information.
    
    I have offered to correct any mis-understandings or mis-interpretations 
    of this loan provided that I was given actual proof of the correct
    information.  I do not accept DCU statements in a letter as facts.  Too
    bad we can't trust the word of an institution to which we trust our
    dollars.
    

    
    Gee, I wonder if this "mortgage" is a loan to "Phoebe Realty Trust"
    that has been named in DCU's suit?  Mary Mangone was the trustee of
    that trust.  Time will tell.  It'll make an interesting question for
    Mr. Cockburn next Monday in TAY.  I also have several other interesting 
    questions for him.  See you there Chuck!