Conference 7.286::dcu

    
    I could support the current BoD.  I need help.
    
    I believe that anyone could make a mistake.  Anyone needs
    help/training.  We may have spent $10 million + training this BoD,
    do we really want to pay to educate a new one?
    
    Here's what I need:
    
    1. I believe the BoD needs to acknowledge that they just had their
       training.  They made a mistake.  Right now, I don't think they know
       that a mistake was made.  This means that it was money down the
       drain.
    
    2. Answers to all the issues/allegations that were brought up.
       - about the 1988 election, what was the auditor's opinion.
         was there the ballot mistake as suggested?
         I need more of an answer than 'trust me'.
       - about the suggested low interest loan.  I can see in black and
         white what the figures are.  Tell me how those figures are wrong.
       - others...   whil all these are open, how can there be trust?
    
    3. Open, honest communications.  We're fellow employees of the same
       company.
    
    
    The BoD picked what appears to be an excellent president in Chuck.
    I disagree with some of what he says, but thats ok.  I like a lot of
    other things he says.
    
    If the BoD, or some of the BoD wishes to talk these out, I'm interested 
    and would work with them as hard as I'd work for their removal.  Its
    not too late.
    
    ed
    

    Until today I had not read this notes file.  However, what I see is
    some drastic actions being taken which could cause the complete
    distruction of DCU.  Personnal money is someting that we all guard
    closely.  There are 80,000+ member of DCU, and many of them will do as
    I will if the Nov 12 meeting removes the board.  What is a Credit
    Union without investors?
    
    Here is my letter to the Chairman of the BoD.
    

    

                  I N T E R O F F I C E   M E M O R A N D U M

                                        Date:     22-Oct-1991 04:19pm EDT
                                        From:     DAN ESLINGER @CYO
                                                  ESLINGER.DAN
                                        Dept:     EIS Software Support
                                        Tel No:   513-984-7532

TO:  Remote Addressee                     ( Steinkrauss @picket @vmsmail )


Subject: DCU Special Meeting                                         

Mark,
I received the DCU Notice of Special Meeting letter, and was unclear what the 
situation is.  Item number 2 of section C  ""...removal of all DCU 
Directors..." and Item number 3 of section C ""...new elections...to fill all 
Board of Directors..."  questions the security of DCU members investments.

After talking with Mary Madden, I understand the intent of the petition, and 
this Special Meeting.  If the results of this special meeting, for which 
non-mass. members can not attend, is successful to remove the full management 
and Board of Directors, then DCU is in serious risk.  My course of action will 
then be to remove all investments and deposits from DCU, and cancel all direct 
deposits into DCU.

Any business that has it full management removed is destine for failure.

I propose that the DCU BYlaws be changed so as a larger percentage of the 
members must vote on such issues, and that all members can vote regardless of 
their location.

Dan Eslinger
Cincinnati

P.S. All members in our office are planning to do the same as myself.

    

       Let us know if Mark responds to your letter. He sure doesn't respond
    to anyone else.
       By the way. The Boards past actions already have caused an 8% drop
    in checking accounts. Care to explain how the removal of the board will
    cause such destruction? There is after all an operating committee.
                                   Denny

Dan,

I'm not sure where to put this, but since you wrote here I'll respond
here.

Removing the BOD (should that happen) should have very little impact
if any on DCU management since the BOD is *not* DCU upper management.
It appears from your letter that you are confusing the two.

I also believe (although I don't know for sure) that this is one issue
that the BOD and those who signed the petition agree on:  Should the
BOD be removed and special elections held, DCU will continue to be
financially stable and run normally during this time.  This issue has
been addressed elsewhere in here (although I can't say where).

I hope this helps your concern.  Perhaps Mary Madden will calm your
fears on this issue as well.

Collis Jackson

    
    Re .2:
    
    The objective of the meeting is not to remove the "full management and
    Board of Directors", but simply (simply?!) the Board of Directors.
    
    As pointed out elsewhere in this conference, the daily operations of
    DCU are handled by a (IMO seemingly very competent, new) president and
    management staff. The Special Meeting does not affect those people.
    The Board of Directors, who meet monthly and set the direction of DCU,
    are the only people affected.
    
    If you were really told that the Special meeting could result in the
    removal of the "full management and Board of Directors", you were
    misled. Misleading information is one reason some people are intent on
    removing the Board of Directors.
    

I am interested in reasons to support the BoD.  This stems from a desire to
find something good to look forward to.  My confidence level over getting
them out of office is low, so if my fears that we're stuck with them are
true, I'd like to hear the good parts.  (FWIW, I'll be there, and I'll be
voting against the BoD.  I just don't know that it's going to make any long
term difference.)

As the overall tone of this conference as of late has been rather harsh towards
the BoD (and I'll happily admit that I've contributed to that harshness), I can
see that the people who DO support the BoD and who aren't unhappy with DCU might
be a little hesitant to post anything here in favor of either, for fears of
getting their butts flamed off.

For this reason, could we agree to let people write their reasons of support
without the rest of us picking their reasons apart like legs off flies?  (I
know - I'd be the first to do it, but I promise not to this time.)

Jeez.  Already my reply .6 looks harsh to me.

As a clarification:

I was not accusing any previous replies of wing pulling, just (given the heat
in here) making a preemptive suggestion.

    
    Re: .6
    
    I agree completely, but clarifying wrong information I don't
    see as "wing pulling."  The author of the letter several replies
    back appeared to understand that the intent was to remove
    management as well.  Those who have been following this for some
    time know that isn't the case and clearly could not be done at this
    point since only the specific agenda called for in the petitions
    can be considered.
    
    Steve
    

    
    Sticking more to the topic, there really are only a few notes that
    speak in favor of keeping the BoD.  I appreciate having a note that
    primarily speaks favorably of the BoD.
    
    One thing in their favor is that they appear to have appointed a Prez
    that can play hardball.  He was on his feet within days.  Gotta give
    'em credit for that.
    
    Another is that it is not apparent to me that any of the BoD have been
    involved in any criminal activity.
    
    The current BoD HAS met with some members of the DCU at least twice and
    invited some amount of discussion.
    
    At the last such meeting, Mark Steinkrauss did apologize on behalf of
    the BoD for what happened with the "participation loans".
    
    The BoD claim that they have made changes and worked with the NCUA to
    assure that similar problems won't occur again.  There is no reason to 
    believe that this is not true right now.
    
    Steve

    
    RE: .2
    
    The operational people at DCU (senior management: President, credit
    committe chairperson, director of operations, etc.) are NOT affected by
    the special meeting.  They will remain in place and the business /f the
    credit union will continue as usual should the BoD be removed. 
    Obviously, we are NOT trying to destroy DCU to save it.  Many of us
    believe that leaving the current BoD in place WILL result in severe long
    term damage to DCU.  Their past actions, judgements and current
    policies have adversely affected DCU's financial condition.  Their
    attitude have clearly shown that they think DCU is a bank and we are
    its customers.  If you don't like it, leave.  We aim to change that
    attitude with a new BoD.  All DCU members will elect them.   Hopefully
    we have learned from our current BoD that ex-bankers are not the best
    people to have on the BoD.  There appears to be little appreciation of
    the credit union philosophy on the current BoD.  That needs to change.
    
    The BoD meets once a month for 4-5 hours.  They set policy, priorities,
    direction, etc.  Should they be removed, the current policies,
    priorities and directions will remain in affect until a new BoD sees
    fit to change them.  Removal of the BoD is NOT the end of DCU.  And
    removal of the BoD will NOT cost DCU any money.  As a matter of fact,
    keeping them may deny a $3 million opportunity to recoup damages to DCU
    should a competent case be built against the current BoD for their part
    in the loan fiasco.  That last statement is purely theoretical at this
    point.  But I don't believe the current BoD can be expected to
    objectively pursue this when it would clearly be in the credit unions
    best interest.  DCU is spending thousands of dollars pursuing Mangone. 
    All I'm saying is that all avenues should be examined.

    
    Re: .9
    
    >One thing in their favor is that they appear to have appointed a Prez
    >that can play hardball.  He was on his feet within days.  Gotta give
    >'em credit for that.
    
    Possibly, but if he had a hand in developing the new information
    policy, could it be that he's playing his hardball with us?
    
    Steve
    
    

    re: .12
    
    Absolutely!  Who else does he have to play hardball with?  That's why
    they are so confident about having him visit sites and talk to members.
    It's a political move, and he plays the politics well.  A new prez has
    to be able to play hardball with the members.  And, he IS representing
    the interests of the BoD rather well, I think.  I just happen to
    disagree with those interests.
    
    But, for the purposes of this note, I am interested in bringing up and
    discussing the positive aspects of the current BoD.  There are very few
    notes in this conference that do this.  If I may suggest, rebuttals to
    such points should probably be put in another note.  Perhaps a new note
    could be created for this purpose.
    
    Steve

   [At the request of the moderator, I've edited out portions of this
    reply that strayed from the topic at hand and re-entered it.]
    
    Re .2:
    
>   Item number 2 of section C  ""...removal of all DCU  Directors..."
    
    Actually, the meeting announcement misquoted the actual agenda that was
    on the 1200+ written requests.  That agenda called for consideration of
    "motions to remove the Board of Directors ..."  The intent was that
    separate motions would be offered to remove the directors, which would
    then be considered individually.
    
    The third item is intended to replenish the Board of Directors as soon
    as practical after the Special Meeting.  The election process requires
    75 days for its various phases -- hence the 90 day limit.  If no
    directors are removed, it's moot and will be withdrawn (or the standard
    "Secretary will cast one vote against ..." will apply).
    
>   After talking with Mary Madden, I understand the intent of the
>   petition, and this Special Meeting.
    
    With all due respect, Mary Madden is the official DCU "mouthpiece". 
    You'll get a MUCH better idea of the intent of the petition elsewhere
    in this conference.  The BoD serves at the pleasure of the membership,
    many of whom are NOT pleased.
    
>   If the results of this special meeting, for which non-mass. members can
>   not attend, is successful to remove the full management and Board of
>   Directors, then DCU is in serious risk.  My course of action will then
>   be to remove all investments and deposits from DCU, and cancel all
>   direct deposits into DCU.
    
    Try not to do anything hasty.  The DCU is still financially sound and
    normal operations can continue on "auto-pilot" for MONTHS in the
    absence of a BoD.  The goal of this whole effort is to make the DCU
    back into a CREDIT UNION.  Right now, it's doing a poor imitation of a
    commercial bank.
    
    It's unfortunate that the DCU bylaws (which mirror the NCUA standard
    form in this regard) prohibit proxies at the Special Meeting.  I would
    support an absentee ballot mechanism (in fact all DCU elections are by
    absentee ballot), but actual proxies could easily be used to subvert
    the democratic process.  You'll still get to vote by mail in the next
    elections.  If you want to re-elect the current BoD members (and they
    choose to run again), you'll have that opportunity.

    Ok, I'll write another note and risk my livelyhood and reputation.
    
    The base note says "list reasons to NOT replace the incumbent BoD at
    the special meeting..."
    
    First, I'd like to point out that the meeting will not replace the
    board of directors.  If successful, it merely ousts them from their
    position.  After that there would be elections, and it's not clear to
    me that the "incumbents" would not be elected again.  Or worse yet,
    there is a great likelyhood of most "incumbents" being elected along
    with some new directors.  I'll bet that the board meetings will be
    livelier in this case, but not necessarily better than before.
    
    Second, I haven't found any reason to support any other candidates for
    the board.  This is partly because I do not know who they are yet, but
    I can make some guesses.  I guess that I want candidates that
    understand financial concepts, have had experience managing enterprises
    at least as large as DCU, of good reputations, ...  I do not want
    directors to micro-manage the operations, that would consistently
    refuse the advice of the president and the legal counsel, and would
    conduct themselves as an adversary with the president and the rest of
    the board.
    
    Third, I believe that the incumbent board has taken steps to correct
    itself.  The board fired its president, and hired a new one.  Good. 
    They rolled back the fees.  I favor the permanent rescission of the
    fees.  I hope that this question at the special meeting will pass.  I
    recognize that the directors wanted it to be temporary, but a future
    board may also have to consider this problem.

re .45:

>   They rolled back the fees.  I favor the permanent rescission of the
>   fees.  I hope that this question at the special meeting will pass.  I
>   recognize that the directors wanted it to be temporary, but a future
>   board may also have to consider this problem.

If the "rescission" passes, does that mean that DCU can *never* change
its fee structure?  I think not.  What (other than the wrath of the
members) is to prevent this BoD or a future one from instituting similar
fees?  Although I'm against the fees, I don't think it's wise to do
something as "permanent" as changing the bylaws to prohibit monthly
checking fees.

As for throwing the BoD out, I think that even if they're all reelected,
they'll tread very carefully.  I agree that nobody who's been noting here
has inspired me to vote for him should he run.

    
>    First, I'd like to point out that the meeting will not replace the
>    board of directors.  If successful, it merely ousts them from their
>    position.  After that there would be elections, and it's not clear to
>    me that the "incumbents" would not be elected again.  Or worse yet,
>    there is a great likelyhood of most "incumbents" being elected along
>    with some new directors.  I'll bet that the board meetings will be
>    livelier in this case, but not necessarily better than before.
    
    Correct.  There are no guarantees on anything.  There are also no
    guarantees that the current board, if left in place, will conduct
    business any different than they have in the past.  The presumption
    here is that all DCU members will be given a REAL choice of who they
    want to head the credit union (should the BoD be removed).  To make
    that choice all members would be given a reasonable amount of
    information concerning each candidate and his/her philosophies
    concerning the DCU.  We certainly require more than the 100 word
    meaningless blurb we have been getting.  Uncensored of course.
    
>    Second, I haven't found any reason to support any other candidates for
>    the board.  This is partly because I do not know who they are yet, but
>    I can make some guesses.  I guess that I want candidates that
>    understand financial concepts, have had experience managing enterprises
>    at least as large as DCU, of good reputations, ...  I do not want
>    directors to micro-manage the operations, that would consistently
>    refuse the advice of the president and the legal counsel, and would
>    conduct themselves as an adversary with the president and the rest of
>    the board.
    
    You honestly think you are going to get people that have already
    managed a $400 million operation?  That is unrealistic and unnecessary
    in my opinion because the BoD does not manage operations.  They set
    direction, policy and establish priorities.  Implementation is senior
    management's responsibility.  The Board should do more than blindly
    rubber stamp whatever it is presented with.  Otherwise, we will be no
    better off than we were a year ago.
    
>    Third, I believe that the incumbent board has taken steps to correct
>    itself.  The board fired its president, and hired a new one.  Good. 
>    They rolled back the fees.  I favor the permanent rescission of the
>    fees.  I hope that this question at the special meeting will pass.  I
>    recognize that the directors wanted it to be temporary, but a future
>    board may also have to consider this problem.

    Yes, they did fire the old President.  Guess they had to when he was
    implicated in the Barnstable mess.  There are several events that may
    indicate earlier action may have been warranted on the part of the BoD
    concerning Mangone.  About the fees, who do you want to believe?  The
    new Prez says they are delayed.  Mary Madden is telling people they are
    rescinded.  Guess they way we never know what is going on...
    
    Nothing is a given in this whole deal.  But I know what we have now. 
    And I know we can do better with a BoD that better represents the
    average member and is not completely out of touch with the membership.
    And most certainly Directors that understand that this is a credit
    union and NOT a bank.  
    

    
    RE: .16
    
    Nobody that has been noting here is running for the BoD.  Do you think
    some people are trying the throw the BoD out so they can run?  I don't
    understand.  Please clarify.
    

re .18:

Should the BoD be thrown out, I'd be very surprised if no one who's noted here
in the last few months runs.  I consider the people who've been actively noting
to be "DCU activists," and I expect "DCU activists" to be the people to run.

    I'd like to see some "activists" run.  It won't be me.  I'm already on 
    three other boards.  Not enough time nowadays.  But, I'll happily
    support some other good folks that would like to go for it.
    
    Steve

    
    I'd like to urge people to stick to the topic in the base note. 
    
    This is the only note that is serving as a forum for people who 
    believe that the board of directors should be supported, and I would
    like to keep to the subject and not side-track to topics that have been
    already hashed in other notes. Pointers to notes are acceptable as a
    rebuttle.
    
    Sincerely,
    
    Your moderator. 

    re: .17
    
    How do you intend to get more candidate information into the hands of
    members?
    
    I don't think that candidates will sway lots of people by pledging to
    run DCU like a credit union and NOT a bank.  What's that mean to the
    average member?

    
    RE: .22
    
    The arbitrary limit placed on candidate writeups can and should be
    removed.  It is currently about 100 words I've been told.  Let the
    candidates give up to a one page writeup on themselves.  The current
    writeups tell people almost nothing.  If I posted the current BoD
    Chairman's writeup, you'd never believe in a million years he could have
    been hood-winked by the ex-Prez.  But it appears he was.  Seems he's an
    ex-banker and making these types of loans probably didn't strike any
    type of nerve.  But if Mrs. Average DCU_Member was on the Board, I'm
    sure the basic interests of the credit union would have been better
    served.  
    
    If a person doesn't understand what a credit union is and why
    it exists, then they are proceeding on a shaky foundation.  I think
    the current BoD has lost the concept of a credit union.  Its been so
    long since DCU was a credit union, many of its members will probably
    have to be reminded what a credit union is supposed to be too.  Then
    DCU will have regained the proper direction and policies.  Then nothing
    like the BoD-PP will be needed.  IMO, that policy must be considered the 
    ultimate failure of a credit union.
    

    Reasons to support the BoD?  I'd like to see some.  A member of the
    board uses his position to borrow (read: rip-off) a large /*huge*/
    *HUMUNGOUS* amount of money from the Credit Union.  Should I/we believe
    that this was done without the knowledge of any of the current board
    members?  If that IS the case, should I/we support the current board
    members who missed this minor violation of the CU bylaws?  No alarms
    were flagged?  Nobody knew?  Why not?
    
    Yes...I'd like to see some reasons to support the board members. 

    Re .-1
    
    Mangone was the DCU president ie the top manager of the DCU and a DCU
    employee. He was NOT a board member.
    
    Just correcting some misinformation,
    
    Dave

    RE: .24
    
    Yes, Mangone was NOT a director.  He was the President of DCU and was
    the ONLY DCU senior management person that attended Board meetings.  He
    also appears to be a "loan officer" according to the last DCU Network
    brochure.  This carries other implications since according to the
    Bylaws a loan officer must be appointed by the Credit Committee.  Also,
    a loan officer can grant loans but they must be reported to the Credit
    Committee.  I asked Chuck Cockburn if in any of his previous 3
    positions as President of a credit union, he was allowed to act as a
    loan officer.  The answer was no.
    
    To legitimize this reply under this topic I will add:
    
    If you want more of the same treatment you're getting now, support the
    current BoD.  And also learn how to say, "Thank you Sir may I please
    have another?!"...  ;-)

    
    re: All.
    
    I hate to be picky about this, but:
    
    I still see we are discussing reasons for not supporting the BOD and
    NOT for supporting them. Unless you have something to say in support of
    the BOD, I suggest you refrain from replying, or notes will start to be
    removed.
    
    Your moderator..
    
    

    Ok, I'll try one on the topic.
    
    I don't feel there is enough factual information to summarily indict
    the entire BoD for collusion and conspiracy to loot the DCU, or wrest
    control from the membership.  I do feel that there was ample evidence
    presented to warrant the removal and replacement of the President, and
    that has been accomplished by the current BoD.
    
    I also feel that certain BoD members have behaved in an unacceptable
    fashion since this all came to light, but I do not see that as
    sufficient rationale and justification to summarily remove the whole
    BoD en masse.  The BoD appears to have been snookered by the
    repsentation of false and misleading information re: "investment
    loans", which they went for hook, line and sinker.  To my way of
    thinking, they were duped, and made an ill-advised decision based upon
    doctored information.
    
    Is possible gullibility and victimization a valid reason to summarily
    dismiss a BoD?  With the advantage of 20-20 hindsight, their decision
    to invest in BCU loans looks really stupid, but we should stop and ask
    ourselves, would any rational group of individuals have behaved
    differently AT THAT TIME, given the information presented and the
    general acceptability of higher-risk investments AT THE TIME?
    
    I suggest that we place the alleged "conspiratorial" activities in
    proper context before we bring forth the guillotine.  While I do not
    condone what happened in any way, shape or form, I do have to be fair
    and put myself in their shoes, and ask if I would have behaved any
    differently.  Face it folks, we all make business decisons every day on
    the basis of information supplied to us by many others.  How many of us
    take the time to re-verify and validate every piece of data before
    acting upon it?  Not many, I'd wager.
    
    Now, as to the information protection policy and other recent actions
    by the DCU, that has to be addressed.  But, I'm not convinced that a
    wholesale purge of the BoD would fix that, either.  I would advocate a
    thoughtful surgical removal of certain apparent problem areas, as 
    opposed to radical slash and burn.
    
    Before the more radical members of the conference decide to quote me
    line-for-line and assasinate me for naivete, please remember, I'm only
    suggesting that we place the events in proper context and think with
    our heads instead of other parts of our anatomy.
    
    Dick.

Does a reason to support *some* of the current board members count?


One board member make it clear to me that she feels the concerns that
I brought up to her are simply due to mispercentions on my part, and
stopped talking when I explained why I thought it was more than that.

Another board member told me flat out that I as a member have no right
to even see the independent auditor's report, so presumably he thinks I
have no right to know anything about how they run my credit union.


But that's only two board members.  I don't have a very clear idea of
what the other individual board members think, but some of them may well
be quite reasonable.  


At the second informal meeting, one board member seemed to indicate
via body language that he felt that we as members deserved to be told
more than the board had revealed.  I hope that's actually his viewpoint.

At that meeting, there were at least two board members who seemed reasonable
in that they didn't respond to questions by throwing in doubletalk and 
irrelevancies, or by expressing anger or contempt toward the members who
were present.  Instead, they gave straightforward answers.  I respect that.


I would love to find out more about the positions of the individual board
members.  I haven't sent mail to all of them individually (I've only sent
mail to board members who explicitly invited me to), partly because I've
assumed I would get no answers.  I expressed the same wish in an open
letter to the DCU, and that message received no answers.

Still, perhaps it is worth a try.  I really, truely would like to have
solid reasons to believe that some current board members agree with my
opinion that members have a right to have visibility into the kinds of
investments that the DCU makes and into the policy decisions that the
board makes (and the reasons for them).  I would also like solid reasons 
to believe that some current board members understand that I was upset
about the "choices" brochure because of its deceptive PR-speak nature --
a mode of communication that the board used again in its justifications
for the information protection policy, and which I find unacceptable.

It's my opinion that some current board members agree with me that the
board as a whole should be more open and honest with the members.
Certainly I want to believe that.  I do not know for certain, however,
because mostly the board has communicated as a monolithic entity.

I would welcome feedback from any board member, and I promise to think
carefully about anything you wish to tell me.

	Enjoy,
	Larry

    
    The fantasy of "surgical" removal of Board members is just that,
    fantasy.  They have maintained a single, constant line.  They are "The
    Board".  They speak and act as one.  At the second informal meeting I
    tried to ask questions aimed at each individual Board member to get a
    feel for each one of them individually.  I got absolutely no where. 
    The party line was maintained.
    
    As for acting due to hindsight, wrong.  There are very real questions
    whether the BoD should have even ventured into these "investments" in
    the first place.  Then once they did, did they do it correctly?  Were
    the controls that were in place allowed to function to protect OUR
    money?  When these loans started going under, were the actions they
    took correct and appropriate?  Has the Board actively concealed all of
    this from the membership?  There are MANY more issues, besides "Hey,
    they got snookered."  IMO, if they got snookered then they should
    accept responsibility for it and resign.  Their positions on the Board
    are positions of RESPONSIBILITY.  All I have seen from the Board is a
    willingness to point the finger at Mangone and the membership for their
    actions.
    

    What I'm hoping is that the motion on Tuesday November 12th after being
    carried will give us an opportunity to support SOME of the current
    board of directors.
    
    Once the board has been kicked out each and every one of them can stand
    for reelection. At this point I fully expect them to act as individuals
    and we can evaluate them on an individual by individual basis.
    I strongly suspect that not all board members agree with the 'board'
    position on issues such as 1) Communication 2) Attitude towards the
    bad loans etc.
    
    But to be honest I do think it appropriate that the individual board
    members have remained quiet while the board still sits. In my opinion
    the whole board should have offered their resignation already but
    since they haven't they need to have it forced upon them. But until
    that point it just breeds anarchy to have the board speaking with 'n'
    different voices. I truly hope that there have been some strong
    discussions at the board meetings and that one faction has
    unfortunately lost and done the honourable thing by remaining quiet
    outside the board meeting. My issue is that the communicate attitude
    and actions of the board are totally inappropriate for our credit
    union.
    
    I intend to assess each and every current board member individually
    when they put themselves up for reelection.
    
    Unfortunately the only board members I feel I have any opinion on
    at present are Mark Steinkrauss and Susan Shapiro and unfortunately
    that opinion is very negative.
    
    In Marks case I am not at all happy with his 1987 statement about the
    credit union only making loans to members and investments in federally
    insured funds/institutions when he was well aware of the participation
    loans in Barnstable Credit Union. I am also not at all happy on the
    demeanour he presented at the first informatory meeting. He appeared
    to dodge a lot of questions or let the DCU lawyer answer. In addition
    he point blank refused to offer any apologies to the membership for
    $18M they'd poored down the drain (yes I know some has been recovered
    through bonds and residual value but you get my point).
    
    In Susan Shapiro's case she seemed angry that we even asked her about
    her statement in the 1990 annual report where she said the DCU was just
    doing fine and on target for net income. When in fact net income was
    down 87%. She seemed more interested in trying to point out that she was
    referring to income before the provision for loan losses and totally
    missed the point that the statement was totally misleading to anyone just
    casually reading the report.
    
    In addition of course there is the issue of all the missing notes
    to the annual report since 1985, notes that clearly spell out info on
    the participation loans. Neither Mark nor Susan would give an answer
    satisfactory to me as to why they had been dropped.
    
    So this is one member who won't be voting for Mark or Susan should they
    decide to stand for reelection. The others I don't know, I'll have to
    see how they stack up against any newly announced candidates that
    presumably will come forward after the special meeting if not before.
    
    Dave

    
    Re: .31
    
    Having been a member of a local school board, I have to agree with
    your point that dissenting opinions about board position should not 
    be aired in public.  Whatever their final position on any matter,
    that position is reached via some process of discussion/compromise
    and all should either support it or resign.
    
    Now this is my point, if any of the DCU BoD have serious differences
    with the current policies etc., then I wonder why none have resigned.
    If I couldn't, in conscience, live with what the board had decided,
    that is precisely what I would do AND, once having resigned, actively
    oppose them.
    
    Steve
     

Re: .31

   Good objective point.  However, what happens if, after they are removed,
   they  all  run  again, and each one says, "Well, I didn't agree with the
   policy,  but  kept  an  honorable  silence."  How do you determine which
   (other than the ones you named) are reasonable?

    There is one aspect of this entire controversy which has not been
    aired.  The participation loans were made in the ****80's*****.
    If you recall, this was the era of junk bonds, 25% annual increases
    in real estate, and DEC stock at $200/share.  The feeling of the
    era was that this would never end, and while that was a foolish
    idea, it was also all-encompassing.  Given the context in which
    these decisions were made, it seems to be fairly reasonable for
    the board of directors to make loans at a higher interest rate,
    with what was perceived as only a slightly higher risk.
    
    Every bank in the region was caught up in this type of thing, and
    just because the decision was foolish, the action was not necessarily
    any worse than any of the rest of us would have done at the time.
    
    Yes, there is a need for SIGNIFICANT improvement, but I would say
    that this is more on a societal level than an individual level.
    We have a BoD which has gone through some painful times.  They have
    learned something.  In addition, most of them are very well qualified
    to run a financial institution.   They NEED to learn to communicate
    better, but I don't think that throwing them out is going to benefit
    DCU in the long run.
    
    Bob

    
    RE: .34
    
    So I take it you have no problem with your credit union investing
    your money in real estate speculation in the future?
    
    I'd like to also point out that several of these loans were NOT made
    when real estate was going well on the Cape.  They were made in a down
    market.

    I've created note 337 as a place to post negative responses to notes in
    333.  Nobody asked me to do this, but I think it's necessary so that
    note 333 can stick to the intent of the author.  I invite those that
    have negative responses to move them to note 337.  Thanks!
    
    Steve

    re: .34
    
    Exactly the point I was making earlier.  The social climate was MUCH
    different during the timeframe of these alleged offenses.  Folks were
    often ridiculed and scorned for NOT jumping into high-yield junk bonds,
    speculative real estate, etc.  That's where the BIG $$$ was.
    
    re: .35
    
    Please stick to the point.  The discussion in .34 related to the
    history of the situation, not what may or may not happen in the future. 
    If you believe the BoD hasn't learned ANYTHING from this (lack of
    public comment or response directly to you notwithstanding) then they
    are, at best, mindless automatons manipulated by sinister forces
    determined to "get" the members.  Seems just a bit paranoid to me.
    
    A little perspective would help here.  Something really bad has
    happened, and has hit much too close to home, but the emotional
    over-reactions being expressed are, IMHO, not much better than the
    original debacle.  I would hope that reasoned, rational thought would
    prevail, as opposed to the "lynch 'em" mentality.
    
    Dick.

    
    RE: .37
    
    >Please stick to the point.  The discussion in .34 related to the
>    history of the situation, not what may or may not happen in the future. 
    
    I am sticking to the point.  The point being that these loans were pure
    real estate speculation whether you put them in 1987 or 1990.  If you
    believe the Board did nothing wrong by speculating in real estate in
    1987 then you have no right saying they are wrong to do it now or in
    the future.
    
>    If you believe the BoD hasn't learned ANYTHING from this (lack of
>    public comment or response directly to you notwithstanding) then they
>    are, at best, mindless automatons manipulated by sinister forces
>    determined to "get" the members.  Seems just a bit paranoid to me.
    
    Please don't put words in my mouth.  The last last sentences are YOUR
    words.  Not my opinions or beliefs.  As a matter of fact, anyone who
    attended the two informal discussions with the BoD (were you there?)
    has a very good feel for what the Board feels they did wrong.  Nada.
    
>    A little perspective would help here.  Something really bad has
>    happened, and has hit much too close to home, but the emotional
>    over-reactions being expressed are, IMHO, not much better than the
>    original debacle.  I would hope that reasoned, rational thought would
>    prevail, as opposed to the "lynch 'em" mentality.
    
    Surely you're joking!  Asking people in positions of power and
    responsibility to be held accountable for their actions or inactions is
    unreasonable?  They have showed not one shread of evidence that says
    they have learned anything or that they can be trusted should they
    remain in office.  I didn't start out on this adventure thinking the
    BoD needed to be removed.  Everything thing that I have come across has
    convinced me that that is the only viable solution.  
    
    I take offense to your calling it a lynching.  We as DCU members have 
    every right to call a special meeting for the purpose of removing 
    directors.  All proper procedures will be followed.  They will have 
    their chance to respond.  There is no lynching occurring.  People will 
    base their votes on the facts presented.  It will be no more a lynching
    than in a courtroom.  Please try and be a little more unemotional
    yourself.

    
�                                                              Folks were 
�   often ridiculed and scorned for NOT jumping into high-yield junk bon s,
�   speculative real estate, etc.  That's where the BIG $$$ was.
    
    But the DCU claimed themselves that they wouldn't do that sort of
    investing.  I, liking that philosphy, and liking the free checking,
    chose to do my business with them.  Whoops.
    
    "Everybody's doing it" has never been a good excuse imho, but if one's
    going to rely on it, one ought to at least be straightforward about it.  
    And "being straightforward about things" is what the DCU is not doing
    with me.  Some people need for the DCU to commit a crime before ousting
    them, and that's fine.  I only need for them to stop being straightforward
    and start acting sneaky.  See, I have some money in a RI Credit Union I 
    may never see again, and I've learned my lesson.
    
    - Sean

    Also remember that the risk of these loans wasn't completely ignored. 
    A very small percentage of DCU's investments was tied up in real
    estate.

    
    RE: .40
    
    Yes, a small percentage of a VERY large number.  6% of $300 million
    dollars = $18 million.  I might also add that we still have not seen
    the "Participation agreement" that DCU entered into in 1985.  So these
    loans may not have been the total that was going to be lent.  We may
    have "lucked out" and only lost $9+ million.($18 million - $3 million
    current value - $6 million bond + lawyer expenses) 
    
    Also, if we want to make the loans seem even smaller we can express it 
    as a percentage of GNP.  8-)  Then they will seem like nickels and dimes,
    right?  A good percentage to look at is the percentage of our EQUITY
    that has been LOST due to this fiasco.  Last time I looked it was 20%
    over the last year.
    
    I prefer to look at the real number involved....
    
    				$18,000,000
    
    The number of zeroes at the end gives the number the significance it
    deserves.  

    re: last few
    
    I will not get into a point-by-point refutation of the expected attack
    that occurred a few notes prior.  I am not advocating the position that 
    no one did any wrong, or made any errors in judgement, either in the past, 
    present or future.  The attacks on my integrity and judgement are the 
    downside of what one must endure to express an opinion on an
    emotionally-charged subject.  8-).
    
    However, I stand by my assertion that a more reasoned, rational review
    of the facts, *within* the timeframe and context of their occurence, is
    necessary for one to make the "best" decision with respect to how to
    act at the special meeting to achieve the results I think we all want. 
    I am a bit concerned that the agenda of the meeting does not allow for
    informed debate about issues broader than just rescinding the checking
    fees and removing the BoD.  I'm not finding fault with Phil, (et al)
    mind you, who has done a heck of a job exposing this and pulling
    information together, but I wish I could have the opportunity to hear 
    each BoD director stand up and give a 5-10 minute dissertation on his/her
    *personal* position relative to (a) the historical participation loan 
    debacle, (b) the current apparently adversarial policies toward the 
    members, and (c) what said director would personally do differently to 
    prevent both situations from occuring in the future.  At the conclusion 
    of this short presentation, I could support a director-by-director vote 
    re: the appropriateness of their continued tenure on the board.
    
    I am not intimately familiar with parliamentary procedure or Robert's
    Rules of Order, and would have no idea about appropriate motions to
    offer, but could this scenario be worked within the framework
    of the special meeting?  I know it would help me to feel that I had all
    the information that I felt I needed before considering the somewhat
    drastic step of summarily removing the entire BoD.  I do not feel that
    I have that information *from both sides* today.
    
    Dick.

        re: .43
        
        The entire BoD is aware of this notes file, and would be more than
        welcome to tell "the other side of the story" here. It has been
        their decision to remain silent, and furthermore to institute
        policies to prevent the truth from being revealed on many topics.
        
        I'm sorry I even started this note. I did not want a pissing
        contest to be started here. I did want to make as clear an
        invitation as possible for the BoD to respond to the many charges
        against them.  Unfortunately this has not happened.

Re: last few...

   I was  expecting  the BoD to give their side at the special meeting.  It
   sounds  very  appropriate too me, as well as the opposing side should be
   allowed to say something.

   How much  time  should be allotted? There are 7 of them? If 10 min or so
   apiece,  that  would  be  well  over an hour for the BoD.  I think there
   should  be  a  limit  to  how  much time they get so we're not there all
   night though.

   I don't  buy  the  BoD  not posting notes because of the emotion of this
   file.   The  BoD  has  *never* to my knowledge ever posted anything even
   back in the days that only a note or 2 was posted per month by anybody.

    
>                 -< Name-calling won't resolve the issues... >-
    
	Huh?  Must have missed this...
    
>   The attacks on my integrity and judgement are the 
>    downside of what one must endure to express an opinion on an
>    emotionally-charged subject.  8-).
    
    Where has this occurred?  Using emotionally charged words such as
    "lynching" goes a long way towards encouraging what you say you are
    trying to avoid.
    
>    However, I stand by my assertion that a more reasoned, rational review
>    of the facts, *within* the timeframe and context of their occurence, is
>    necessary for one to make the "best" decision with respect to how to
>    act at the special meeting to achieve the results I think we all want. 
    
    I guess many other people have responded to the context of these loans. 
    But the fact that these loans were concealed from the membership for
    nearly 6 years is amazing.  Even when they started going bad, they were
    kept under wraps.  The entire concealment and glossing over of the
    losses I want disturbs me more than anything in this entire thing.  If
    the BoD felt these were such a good investment, why were they a tightly
    held secret for so long.
    
>    I am a bit concerned that the agenda of the meeting does not allow for
>    informed debate about issues broader than just rescinding the checking
>    fees and removing the BoD.  I'm not finding fault with Phil, (et al)
>    mind you, who has done a heck of a job exposing this and pulling
>    information together, but I wish I could have the opportunity to hear 
>    each BoD director stand up and give a 5-10 minute dissertation on his/her
>    *personal* position relative to (a) the historical participation loan 
>    debacle, (b) the current apparently adversarial policies toward the 
>    members, and (c) what said director would personally do differently to 
>    prevent both situations from occuring in the future.  At the conclusion 
>    of this short presentation, I could support a director-by-director vote 
>    re: the appropriateness of their continued tenure on the board.
    
    Each director has a right to speak before a vote is taken for their
    removal.  Like I said, this will all be done according to the book if
    the person running the meeting will allow it.  Hopefully everybody will
    get to say their piece because there will be many people there that
    aren't DEC employees and have not heard much of anything about this.
    
>    I am not intimately familiar with parliamentary procedure or Robert's
>    Rules of Order, and would have no idea about appropriate motions to
>    offer, but could this scenario be worked within the framework
>    of the special meeting?  I know it would help me to feel that I had all
>    the information that I felt I needed before considering the somewhat
>    drastic step of summarily removing the entire BoD.  I do not feel that
>    I have that information *from both sides* today.
   
    Well, the BoD has been using DCU communications vehicles to publish its
    version of events.  Have you seen the latest Network brochure?  They
    had a one page writeup.  We've been told the BoD monitors this file. 
    Maybe if you post your questions they can adequately prepared for the
    special meeting.

    Re .43:
>                      ...but I wish I could have the opportunity to hear 
>   each BoD director stand up and give a 5-10 minute dissertation on his/her
>   *personal* position relative to (a) the historical participation loan 
>   debacle, (b) the current apparently adversarial policies toward the 
>   members, and (c) what said director would personally do differently to 
>   prevent both situations from occuring in the future.  At the conclusion 
>   of this short presentation, I could support a director-by-director vote 
>   re: the appropriateness of their continued tenure on the board.
>   
>   I am not intimately familiar with parliamentary procedure or Robert's
>   Rules of Order, and would have no idea about appropriate motions to
>   offer, but could this scenario be worked within the framework
>   of the special meeting?...
    
    As I understand it, after the question of whether to vote out the Board
    of Directors is raised, you can move to amend the question by dividing it
    into as many questions as are appropriate. You should have your amendment
    in writing to avoid confusion. You can do this at any point during debate
    on the main question, once you have obtained the floor. If the motion to
    amend by division is moved and seconded, it takes precedent over the main
    question and is then debated and voted; a simple majority will carry the
    motion. If it carries, the main question then becomes the individual
    questions as specified by your amendment; during the debate of each, you
    could ask the relevant director for the information you need to decide on
    their removal.
    
    It's important to have people with a wide variety of viewpoints at the
    meeting, not just "They've-learned-so-give-them-another-chance" and
    "They're-all-pond-scum-so-throw-them-all-out".  Diverse viewpoints can be
    expressed in a number of motions to the main questions; I'm sure such a
    diversity will extend the length of the meeting, but it will also yield
    a greater probability that the "right thing" will be done.
    

    
    Re: the context of the times
    
    Perhaps there is another way to look at this.
    
    Whatever the context, was it appropriate for a credit-union
    to be getting involved with all this no matter what the times?
    I think not.  I think that no matter what the opportunity, it
    was a serious error in judgement for a credit union to be getting
    involved in what was being done by the financial industry that
    was interested in profits.  To point to what banks and other types
    of financial institutions were doing during the times, in my opinion,
    tends to support the idea that the DCU suffers from a fundamental
    misunderstanding of what its members expect it to be and of why
    they joined and, when you sort through the many opinions written
    in this file, I think that is the most common theme.  Arguing about
    how everyone else did it and some, like the DCU, got caught short
    is just a red herring.
    
    Even if it had not backfired and the DCU had made record setting
    profits, my response would be: "Great, you lucked out and I'm glad
    that WE made money, but don't do it again."
    
    Steve
    
    
    

    More on context:
    
    Any investment or loan entails some degree of risk.  In general
    the rate of return on the investment roughly compensates the investor
    for the risk.  It therefore is sensible to have investments with
    varying degrees of risk.  In the context of the 80's, the higher
    rate of return investments did not look that risky, and in the context
    of the 80's the decisions by the BoD were not as bad as they look
    now in hindsight.  Clearly they were poor judgement, but at the
    time, they did not appear to be so.  There were very few financial
    institutions in the area that did not get burned by bad real estate
    loans in the late 80's and early 90's.  While it would have been
    great if the BoD had forseen this problem and loaned to only VERY
    secure investments, the fact that they did not do so only means
    that they were about average for the times.
    
    For the future, yes, I think more cautious investing is wise, but
    if we swing the pendulum too far the other way, we can be overly
    cautious and significantly reduce the income which the DCU so badly
    needs.  
    
    In short, I would like to retain at least some people with significant
    business experience on the BoD.  Perhaps a combination of very
    experienced people, along with some "normal members" would allow
    for good business decisions as well as good communication with member
    needs.
    
    Bob

    Would you care to list the people you want to keep?
    
    I believe the way to keep some of the people is to:
    
    	1. First remove them all because otherwise we can't get through
    	the special meeting in any reasonable amount of time, then
    
    	2. Re-elect some with the appropriate experience (but not Steinkrauss
    	for other reasons).

re:  .49

I understand the notion of the context in which the loans were made.  There's
a reply in the "Arguments w/333" note in which I go on for probably too long
about the context in which this stuff was done, etc.

Please don't forget, however, that one of the major points that people seem
to come back to (I know I do...) is that the BoD entered into these investment
relationships with BCCU in a confidential and (IMHO) underhanded way.  
Information which would have enabled shareholders to see what was taking place
was withheld from annual reports.  Statements made by the BoD about the types 
of investing that was taking place and where the money was being invested ran
counter to the facts at the time.  

Whether or not the investments/loans seemed wise during the "Everybody's doing
it" fiscal attitudes of the 1980's do not, IMO, forgive that shareholders were
misled and kept in the dark about what was taking place.

Regarding composition of the BoD, you wrote:
>    In short, I would like to retain at least some people with significant
>    business experience on the BoD.  Perhaps a combination of very
>    experienced people, along with some "normal members" would allow
>    for good business decisions as well as good communication with member
>    needs.

I feel that it is reasonable to assume that individuals with significant 
business and financial backgrounds *will* come forward to run for the BoD
if we are successfull at voting down the Board in November.  While I don't
know anybody who is planning to run, it seems to me with the wealth of
experienced management within the Corporation, that there must be somebody
somewhere with a great deal of financial background who is willing to sit on
the BoD.  We've got a lot of talented people in the Corporation with a diverse
set of skills and talents - let's give them a chance too.


/chris

    
    Re: .49
    
    I think you are missing the point that many are making.
    The financial advisability of what the BoD did is a red
    herring.  In my opinion, derived from reading notes written
    here, many DCU members, myself included, believe that the
    BoD did what they did in *violation* of the bylaws and, in
    the aftermath, have been collectively unresponsive and perhaps
    in some cases even comtemptuous of the wishes of the membership.
    
    That's the polite way.
    
    Now for a mildly vernacular version:
    
    It wasn't the BBCU debacle that got them in hot water.  It was
    p****** us off that did it!
    
    Steve
    

.49:  I hope you don't feel picked on, but there's one more point from
your message that I'd like to note:  your suggestion that we should perhaps
retain some current BoD members so that we get a mix of `very experienced 
people, along with some "normal members"'.

The problem I have with this statement is the implicit assumption that the 
only very experienced people among the DCU membership are the current
Board members.  That is certainly what they say, but I believe that there
are many DCU members, not on the board, who have direct experience running
or founding other credit unions.  Also, the experience of the current Board
members (the chairman was once a bank examiner) didn't help them to spot
this fraud -- or perhaps more fairly, didn't help them to see the dangers
of putting essentially no checks on the veracity of Mr. Mangone.  The
list of things they have said they took his word on without independent 
checks is lengthy and appalling.

My conclusion is that I agree wholeheartedly that we need a board that
has a mix of very experienced people along with some normal members.
I differ in that I think there are likely to be plenty of very experienced
candidates without needing to consider anyone currently on the board.

	Enjoy,
	Larry

  I will attend the special meeting, and will vote to not remove the
  BoD.

  I have no love of any BoD member. In fact, I don't know much about any
  of them. I've read a lot of the material in this conference, and am
  disturbed by much of it, especially the lack of forthright statements
  from the BoD. However, I will not vote to remove the BoD until I have
  seen a recommendation to do so from an independent agency which is
  fully competent to conduct a thorough investigation of their alleged
  misdeeds.

  I'm very grateful for, and thoroughly impressed by the efforts of many
  partipants in this conference, but (1) none of them are without vested
  interest, and (2) to my knowledge, none of them are appropriately
  qualified in banking and finance.

  I do not support the BoD. I want a competent, unbiased recommendation
  to remove them before I will vote to do so. I believe that any other
  vote would be irresponsible.

Could the author of .54 please elaborate a bit?  In particular:

>  I'm very grateful for, and thoroughly impressed by the efforts of many
>  participants in this conference, but (1) none of them are without vested
>  interest, and (2) to my knowledge, none of them are appropriately
>  qualified in banking and finance.

I'll admit to (2) applying to me, although I don't think it applies to all
of the participants in this conference.  However, I have no idea what you
mean by saying that I and others have a vested interest.  I certainly have
vested interests (I insist on integrity in those I accept as leaders, for
example), but I don't know what vested interest I have that could be
construed as making me biased in evaluating the actions of this Board.

Note, I'm not bothered by that claim, I just want to know what you mean.  
Feel free to reply privately if you like.  And thanks for entering your
thoughts.

	Enjoy,
	Larry

Re: .54

>  I'm very grateful for, and thoroughly impressed by the efforts of many
>  partipants in this conference, but (1) none of them are without vested
>  interest, 

I didn't understand this point - everyone with a non-zero balance at DCU
has a vested interest in this affair.  Are you saying that the activists
have some hidden reason to want the board removed?  Or some reason beyond
wanting the most responsible and trustworthy people they can find managing
their credit union?

				- - Steve

>  I have no love of any BoD member. In fact, I don't know much about any
>  of them. I've read a lot of the material in this conference, and am
>  disturbed by much of it, especially the lack of forthright statements
>  from the BoD. However, I will not vote to remove the BoD until I have
>  seen a recommendation to do so from an independent agency which is
>  fully competent to conduct a thorough investigation of their alleged
>  misdeeds.

I would love to have an independent agency provide such an investigation
and recommendation, but I don't see any likelihood of it happening unless
the DCU should become insolvent.  The lack of that does not, IMO, lead to a
foregone conclusion that the BOD should remain.

One might presume that anyone who expended a lot of time and effort in
investigating this situation has some vested interest, but I see no
evidence that this vested interest is any greater than that of the BOD.

	Paul

  >I do not support the BoD. I want a competent, unbiased recommendation
  >to remove them before I will vote to do so. I believe that any other
  >vote would be irresponsible.

    As a member/owner of DCU, it is our DUTY to research and look into DCU
    dealings.

    It is everyones duty, to know what is going on, who will be voting on
    Tuesday.  This is the same ANY time a person votes, for ANYTHING.  If
    you feel you do not have enough information, then what would be needed
    to answer your questions?
    
    The NCUA and FDIC tend to be REACTIVE not PROACTIVE, usually well after
    the problem has occurred.

    We HOPE to be a little proactive and address problems we see and make
    sure they do not happen again.  We are being reactive to what has
    happened, before it gets worse.

    If you have doubts/questions - ASK.  If you feel that ONLY the
    government can get answers, even though you are a member/owner and you
    cannot get the answers, you need to make a decision - what do you need
    to change at DCU so YOU can get answers to make a decision?

    After looking into the problem you may feel that all is well and better
    left alone - that is your choice and RIGHT as a member/owner.  The key
    is, you must look into a problem.

    If I can help get you or ANYONE else information about what is going
    on, ask.  I can supply you information, but you must vote, in the end.

    	- mark

    RE: .54
    
>  I will attend the special meeting, and will vote to not remove the
>  BoD.

    Excellent!  We want ALL, or as many DCU members as possible, to
    attend the special meeting.  Everybody making an informed decision and
    casting their vote.  Democracy in action.  
    
>  I have no love of any BoD member. In fact, I don't know much about any
>  of them. I've read a lot of the material in this conference, and am
>  disturbed by much of it, especially the lack of forthright statements
>  from the BoD.
    
    Many are also concerned about the same things as you.  The bottom line
    in all this seems to be trust.
    
    >However, I will not vote to remove the BoD until I have
>  seen a recommendation to do so from an independent agency which is
>  fully competent to conduct a thorough investigation of their alleged
>  misdeeds.
    
    I do wish it was this simple.  The federal agency which oversees DCU
    only removes Directors in the most serious of cases (fraud, criminal
    mis-deeds, etc.).  That has clearly not happened here.  Otherwise, 
    they would have acted, not just recommended.  Now that leaves
    independent auditors.  Making such recommendations is not their
    charter.  Besides, recommending that the people that pay you be tossed
    is probably very high on their "Not-to-do" list. 8-)  So I guess this
    leaves me wondering who can render such an evaluation?

>  I'm very grateful for, and thoroughly impressed by the efforts of many
>  partipants in this conference, but (1) none of them are without vested
>  interest, and (2) to my knowledge, none of them are appropriately
>  qualified in banking and finance.

    Ditto the previous comments on (1).  My only vested interest is seeing
    that my credit union is run like one by people who I feel I  can trust. 
    I have no idea what banking and finance have to do with being honest
    and open with the membership.  That is the main issue in my eyes.  We
    are paying DCU's senior management very good salaries to be qualified
    in banking and finance.  The majority of the BoD has no background at
    all in these areas. 
    
>  I do not support the BoD. I want a competent, unbiased recommendation
>  to remove them before I will vote to do so. I believe that any other
>  vote would be irresponsible.
    
    Many of the issues are not just facts.  They boil down to philosophy,
    attitudes, beliefs, etc.  Who can possibly make a recommendation on
    such things?  The answer is clearly nobody because they are very
    personal.  Therefore, as much as you wish and hope for a written
    recommendation, the final judgement is strictly personal.  
    

.54>   I do not support the BoD. I want a competent, unbiased recommendation
.54>   to remove them before I will vote to do so. I believe that any other
.54>   vote would be irresponsible.


A "competent, unbiased recommendation to remove" ?

This could be difficult to define, let alone prove when you had one.  For
instance, the Board would almost certainly define ANY recommenadation to
remove as "biased", "incompetent", or both.

One of the weights of the responsibility of exercising the vote is that you
often have to be your own judge of what information to trust.  "They" can't
provide it for you -- especially when it is "they" whose credibility must
be judged.

As has been observed before, democracy is a lousy system -- it's just that
it continues to be better than all demonstrated alternatives.

  A lot of people seem to have a lapse of creativity on how to obtain an
  impartial, competent evaluation of the conduct of the BoD. It's
  simple: pay an independent firm which specializes in financial audits
  (preferably not Coopers & Lybrand). I would be happy to chip in my own
  money for this (in any case, it would be our money). I would gladly
  contribute up to $100 toward such an audit (possibly more), plus
  another 10$ (possibly more) to Phil G and one or two others to act on
  our behalf in contracting with this agency.

  Why do I say that all participants in this notesfile have a vested
  interest? Simple: because we are all parties to the dispute. The
  relationship between customer (us) and vendor (DCU) is an adversarial
  one. The relationship between employer (us) and employee (BoD) is an
  adversarial one. We are in both of these relationships with respect to
  the BoD. We are not independent of the matter, as an independent
  auditing firm would be (even though contracted by us).

  I regret to have to say it, as I'm very dismayed by what little I've
  seen of the conduct of the BoD, but the behavior of this conference
  and the mail messages which have floated by in the last few days is a
  perfect example of a witch hunt. Emotion and the taste of blood has
  blinded people to responsible behavior.

  Snap out of it, folks.

    
    Re: a vote not to remove
    
    The text of your note seemed to focus on the financial issues
    exclusively.  As I've said before, totally separate from the
    Mangone affair there is good reason to remove the BoD.  IMO,
    they have behaved on a way which shows disrespect and contempt
    for the wishes of the membership.  Why wouldn't that be reason
    enough?
    
    In another note here Chuck Cockburn is quoted as saying that the
    DCU "intends to cooperate with the membership"  or words to that
    effect.  "Cooperate?"  What is that supposed to mean?  I expect
    him and the BoD to adivse us as to how the DCU should proceed,
    but other than that for them to do EXACTLY WHAT THE MEMBERSHIP
    TELLS THEM TO DO!  Period.  They work for US!  Period.
    
    Steve
    

>    [...] IMO,
>    they have behaved on a way which shows disrespect and contempt
>    for the wishes of the membership.  Why wouldn't that be reason
>    enough?

  The problem is that your opinion is based on what you've read in this
  conference and other limited sources of information. It's not based on
  any independent audit, as none has been done (or the one which was
  done by the NCUA you choose not to accept). 

  I'm not willing to conclude on such limited information that people
  who have shown no track record of incompetence or malice actually have
  the disrespect and contempt which you perceive. There may be
  legitimate reasons, not just "cover your ***", for the behavior we
  see, as inappropriate as it may seem to us. I've said I'm dismayed by
  it, but I'm not convinced that it's inappropriate, as I don't know the
  details of the circumstances. I would like to get those details, and I
  would like an independent agency, with whom the BoD would cooperate,
  to get them for us. I will gladly pay for such an audit.

    I haven't previously jumped in here, but now, it's time ...
    
    
    re: .63
    
>  The problem is that your opinion is based on what you've read in this
>  conference and other limited sources of information. It's not based on
>  any independent audit, as none has been done (or the one which was
>  done by the NCUA you choose not to accept). 
    
    You you actually serious here, or is this a joke?
    
    The fact that the BoD have "behaved in a way that shows disrespect and
    contempt for the wishes of the membership" is *NOT* based on what I've
    read in this conference.  It's based on what *I HAVE EXPERIENCED,
    PERSONALLY*.
    
    Call the DCU.  Ask them reasonable questions about their financial
    worth, and ask them questions about the loan fiascos.  Ask to see the
    auditors notes (that should have been included in the annual report to
    begin with).  Ask other questions.  Soon, you will find that you'll
    need to submit a written request *WITH A BUSINESS JUSTIFICATION* for
    the information.  And they'll *CHARGE* you for it.
    
    Then go to a local bank down the street.  Ask them questions about
    their financial stability and worth.   You'll find that their auditor's
    notes are *INCLUDED* in their annual report (you don't have to even ASK
    for them) - at least it was at the bank I checked.  And they're
    actually HAPPY to answer your questions (a far cry from the DCU's
    attitude).
    
    When I've called the DCU, the run-around that I've gotten was UNREAL. 
    And this BS about their new "Information Policy" is a joke.  If I was a
    stockholder, and the company I invested in had that sort of policy, I'd
    certainly not invest my funds in that company.  Companies should be
    open and honest when STOCKHOLDERS (or, in our case, MEMBERS) ask
    questions.
    
    If you disbelieve any of this, then *PLEASE*: Call the DCU yourself,
    and ask questions that you feel you need to know the answer to so
    you'll fully understand the situation here.  I'm so confident that you
    WON'T get them, that I ask you: PLEASE try for yourself.
    
    You'll be convinced.  I was, long before I even looked in this
    conference.
    
    	-- Jeff

   <<< Note 333.61 by MICROW::GLANTZ "Mike @TAY 227-4299 TP Eng Littleton" >>>

>  simple: pay an independent firm which specializes in financial audits

	I would think it highly unlikely that any auditing firm not
	hired by the BoD would be allowed access to the materials
	required to perform such an "independent audit". Heck, we can't
	even GET some of the reports issued by the people they DID hire.

Jim

>    [...] Soon, you will find that you'll
>    need to submit a written request *WITH A BUSINESS JUSTIFICATION* for
>    the information.  And they'll *CHARGE* you for it.

  I don't see any problem with this policy. By itself, it is not an
  indication of any attempt to hide information. It has been stated that
  its purpose is to discourage access to information for what are deemed
  inappropriate purposes (my wording). It *may* be part of a coverup,
  but I haven't seen enough evidence to convict.

  Furthermore, I don't know that you, or any other participant, has
  consistently approached the DCU BoD in a thoroughly professional, non-
  confrontational manner (though I suspect that Phil's initial requests
  were quite respectful). Some of the language used in this notesfile
  (which is monitored by the BoD) suggests otherwise.

  In trying to put myself in the position of the BoD, with the limited
  information at my disposal, I can find explanations for their behavior
  which don't involve cover-ups or misdeeds, and are of the highest
  moral standards.

  I have asked for an independent audit before voting to remove the BoD.
  In the absence of such an audit, I will vote not to remove the BoD at
  the special meeting (if it even comes to such a vote, which I very
  much doubt it will).

    
    RE: .66
    
    Would you say the past statements by the Chairman of the Board, both in 1987
    (which he has NEVER addressed to my knowledge) and on the 1990 annual
    report have been complete and accurate?
    
    Would you say Susan Shapiro's statements as Treasurer on the 1990
    annual report were complete and accurate?
    
    Were the statements by DCU's spokesperson that DCU has suffered no
    losses (or something to that effect) due to the participation loans
    complete and accurate?
    
    Given the fact that our credit union had suffered $2.6 million in
    losses in 1990 (wiping out almost all net incoem for that year) and
    that it was not called out, is this complete and open communication by
    the people running our credit union?
    
    If you are prepared to support people who do the above at a financial
    institution in which you place your money, then don't be surprised when
    you arrive one day to find the doors locked and a notice from the NCUA. 
    It is each individuals responsibility to evaluate the institution with
    which you give your money.  If that institution is not telling you
    everything you need to make a decision based on complete and accurate
    information, then you stand a good chance of making the wrong decision
    and suffering the monetary consequences.  WE have already suffered $10
    million from this and I believe just dodged a bullet with DCU's name on
    it.  Barnstable Credit Union, and it's depositor's, were not so
    fortunate.

  Phil, I have no answers to your questions, because I have no
  information with which to form answers. I don't know whether the
  various statements made were accurate or not. On the basis of material
  you've presented, I would say they are not. You, Phil, are not an
  independent auditor with documented qualifications in banking and
  finance. I mean that in no disrespectul or ungrateful way.

>    If you are prepared to support people who do the above

  I am not prepared to support these people. I have repeatedly said that
  I don't support the BoD. Why do people jump to the conclusion that if
  I'm not against them, I must be for them? Do you hate the flavor of
  white truffles? Do you have enough information to answer that
  question?

    
    Re: having no personal experience.
    
    I beg to differ.  Consider this:
    
    In August, I, like you I would guess, received the now famous
    "choices" brochure in the mail telling me what a good deal I
    was going to get when they took away the free checking that 
    they had on other occasions reported that members want very much.
    I was insulted by the tone.  I felt that my intellect was being
    held in contempt as if I wasn't smart enough to figure out that
    somehow I was getting screwed.
    
    I looked into this notes file.  I found there were *hundreds* of
    others feeling the same way.
    
    I read the note posted by the BoD.  They in effect told me that
    I couldn't do without them and they wouldn't permit it anyway.
    
    That's ALL the personal experience I need to know this BoD is
    out of control and out of touch.
    
    Steve
    
    
    

Re: .68

.66 > In the absence of such an audit, I will vote not to remove the BoD at
.66 >  the special meeting

Mike, in your own words, this is why people think that you're "for them."
Unfortunately, it's come to this: if you're not for open elections in which
some of the current board may be replaced if voted out by a plurality of the
membership, then you're "for them."

Jim

re .66 & earlier:

I joined this whole issue feeling *exactly* as I understand that you do.
See my note summarizing the second of the informal meetings for proof --
I tried to be as unbiased as possible, and even a board member called 
that report fair and accurate.

At some point, I stopped trying to think of justifications for the Board's 
actions -- the exercise became untenable. It had a lot to do with a
meeting Mark Steinkrauss invited me to.  I asked questions, listened 
very carefully to what he did and did not say, and we parted amicably.

One of the things Mark said to me was that I *do not* have a right to see
the audit reports -- that I am not an owner of the CU and have none of the
rights that a stockholder or other owner would have.  This statement by
itself is enough to make me decide to vote out this board and vote in a
board that thinks I *do* have such rights.  So maybe that's my vested 
interest.  It is a matter of philisophy.

Now for an issue of fact as opposed to philisopy.  It's true that
customers and vendors are by definition in an adversarial relationship,
but that *does not apply* between the members of the DCU and the Board.  
A credit union is, by definition, a cooperative, which exists for the
purpose of serving its members.  It's not at all the same as a business
that has customers but exists to serve its owners, the stockholders.

	Enjoy,
	Larry

PS -- Sorry to contribute to the degeneration of this note from reasons to
support the board, and I'm sorry if anyone feels uncomfortable.  However,
I think it was important to understand what the author of .66 meant by
saying the members having a biased vested interest.  Now I understand why 
you said it.  Thanks for explaining, though of course I disagree.  LS

  Well, here's my guess as to what might happen at the special meeting,
  given the current emotional climate:

  - No vote will take place at the special meeting. Parliamentary
    wrangling and other foolishness will see to this.

  - Members will leave feeling cheated and deceived.

  - Members will, through passionate discussion in this notesfile,
    decide to appeal to the NCUA through some manner of letter-writing
    campaign.

  - This campaign will get nowhere, and, after much more passionate
    discussion, people will resign themselves to the fact that they are,
    as in many other areas of life, essentially powerless to act. Some
    will close their DCU accounts, some will not.

  - OR, this campaign will get nowhere, and a small band will attempt to
    take legal action against the DCU, ultimately getting nowhere.

  - OR, some people will attempt to start another credit union, which
    might actually get somewhere, or might not, depending on how hard
    people are willing to work.


  What I would rather see happen is:

  - No vote will take place at the special meeting, by popular consent.

  - We will discuss and settle on a course of action designed to get
    further information, either from an independent audit, or through
    continued work with the board.

  - We will establish a task force to look into assorted changes in the
    way the credit union is operated, and how it disseminates
    information.

  - We will leave knowing that there's much more work to be done, and
    that it will take a long time and hard work to do it.

To Mike --

Thank you for taking time to post your thoughts, and thank you also for
whatever suffering the subsequent rebuttals have put you through.  I do
not agree with your position, but you stated it cooly and reflectively,
and the whole purpose of any sane discussion of a contentious, complex
issue is to allow various points of view to be aired.

I hope you intend to be at the Special Meeting, and I for one will
enthusiastically support your voting your conscience.  I'm confident that
essentially all the others participating in this discussion feel the same way.

-Bill

    
RE: .68
    
    >  Phil, I have no answers to your questions, because I have no
>  information with which to form answers. I don't know whether the
>  various statements made were accurate or not. On the basis of material
>  you've presented, I would say they are not. 
    
    Let me know if you wish to read actual copies of the documents.  I am
    having a hard time understanding why a statement denying something that
    is later proven false by actual financial statements needs a finance or
    banking person for evaluation?  The issue is the actual numbers, its
    the existance or non-existance of the item in question (participation
    loans).
    
    >You, Phil, are not an
>  independent auditor with documented qualifications in banking and
>  finance. I mean that in no disrespectul or ungrateful way.
    
    No, I am not an independent auditor.  Nor do I have to be to determine
    when I have been deceived.  I do have a bachelors degree in accounting
    and have experience running a family business.  I feel those give me a
    firm basis for my statements.  Now if I had years of experience as a
    bank examiner (such as BoD Chairman Mark Steinkrauss) I guess I would
    over-qualified.  What does truly puzzled me about this, is that Mark
    Steinkrauss' glowing creditials that were listed on his candidate
    writeup did not protect DCU at all in this matter.  I am astounded that
    a former bank examiner would sanction so much power and control in the
    hands of a single individual (Mangone) and not think twice about
    excluding notes to the financial statements.  I just can't figure it
    out.
    
>  I am not prepared to support these people. I have repeatedly said that
>  I don't support the BoD. Why do people jump to the conclusion that if
>  I'm not against them, I must be for them? Do you hate the flavor of
>  white truffles? Do you have enough information to answer that
>  question?
    
    I guess you could abstain from voting.  But if you vote for them, it
    most certainly will be interpreted as supporting them.  All we are
    asking for is a vote of no confidence for the Board.  All this does is
    open all Director positions to any who wishes to run, the current
    Directors included.  Maybe after they have been released from their
    collective bond, they will freely comment on their individual positions
    and philosophies.  Right now we have no idea what they are on an
    individual basis, just as a board.  We will then be able to determine
    if the individual candidates and their positions are what the general
    membership want in a general election where ALL DCU members vote.
    In short, let the entire membership decide who we want on the Board.
    

Re: .72

   Mike, I  appreciate  your  courage  in posting support for the board.  I
   would  like to support them too, but I haven't seen anything lately that
   convinces me to do so.

   Sorry Mike,  but  I  don't think your (good) suggestion will happen.  If
   the  BoD is not removed, they will breath a huge sigh of relief and it's
   business as usual.  In fact, if they are removed and get voted in again,
   I believe the same thing will happen.

>> either from an independent audit, or through
>> continued work with the board.

   Please explain  how  either of these will happen.  There were many calls
   for  an independant audit when Mangone was fired.  I don't think there's
   been  an  independant  audit  since,  has there? I think they've changed
   auditors,  but have they really looked into the past several years? I've
   not  seen any audit report.  And who's going to force the BoD to do this
   (assuming that it hasn't been done already)?

   Furthermore, I've seen no indication that the board is open to any input
   from  members.   Chuck  is  the best thing that's come along for them in
   years.   I  just  spoke  today with somebody who gave up trying to get a
   loan  from  DCU  before Chuck.  Now people are getting loans.  I believe
   Chuck  is responsible for this, not the board.  The board has lost touch
   with members years ago.

   In other  words, we can't work with the board - they won't share with us
   the information we need to look at to make this objective determination.
   The  information  they  did  give  us  left  us with more questions than
   answers and now they've shut down all information to us.  Now what do we
   do?

    re: -1
    
    Why do you not give the directors credit for hiring Chuck?  You say
    nice things about him, but seem to think that he acts alone.

Re: .76

   I say nice things about some of the things that Chuck has done. However,
   I fault  Chuck  for taking up residence in the BoD's back pocket.  I had
   hoped  he would distance him self a bit from the BoD pending the outcome
   of  the  special  election.   I'm  disappointed  with what I see are his
   mis-statements  and refusal to address certain embarrassing (to the BoD,
   not to himself since he wasn't around) questions.

   But that  doesn't alter the good things he appears to have done since he
   started work at DCU.  So yes, the BoD seems to have done a good thing in
   hiring  Chuck. 

   But the  BoD's  are  responsible  for  far  more  than the hiring of one
   person.   They  are  responsible for all the mis-information we've seen.
   One   aparently  good  deed  does  not  erase  everything  else  they're
   responsible for and continue to do.

   Having Chuck in there for continuity if the board is gone will be a good
   thing.   Maybe  we  can  see  what  Chuck's views are on things when not
   gagged  by  the  BoD.   I hope things will change a lot if Chuck's given
   more freedom to act.

	Yes, I commend the BoD for hiring Chuck.

	Axiom: One "Oh Shit!" cancels out all previously acquired "attaboy"s.

	Since hiring Chuck, the BoD has committed numerous "Oh Shit!"s.


					Tom_K

I was bothered by the tone in a number of messages in the mid-.60s on.
This special meeting is supposed to be an exercise in democracy, not
an exchange of personal attacks!!  :-)

Mike Glantz has some serious reservations about voting to remove the
current DCU Board of Directors.  I appreciate reading his comments
(although I tend to agree with about 1 in 3!).  It really annoys me
when the issue degenerates to "you're no good, you're for 'them'".
That's not an appropriate response.  Mike has some perfectly valid
points, and is fully entitled to the opinion that the board should
not be removed without more information being provided.

A motion to adjourn the special meeting without voting on the question
of removing the board is perfectly acceptable practice.  Should such
a motion be made and seconded, I expect everyone to debate the
question and vote in a polite and orderly fashion.  If anybody starts
to hassle another participant or starts tossing insults, I will
personally insist on a Point of Order to appoint a Sargeant at Arms
and eject the offending party.

That goes for just about any issue.  Let's have a civil, democratic,
lively, and fun debate, and settle the next steps for our credit union.

				- - Steve

re: .72 (Mike)

Serious question:  Have you contacted Mary Madden and asked if the BoD would
cooperate with an independant audit by professional auditors?

It may be to your benefit (and the benefit of others) to find out how such a
suggestion is received (not that I believe you'd necessarily receive a 
definitive answer before the meeting, but then again, you won't know unless you
ask).

-- Russ

    I don't think an adjournment without voting the current BoD up or down
    is a good idea.  It would most likely result in another 1200+ petitions
    being signed to try to recall the BoD again.  The better choice is to
    take the vote and make an actual decision.  (While I realize that isn't
    the "Digital Way", I still believe that is the better alternative.)

    Personally, I like Mike's comments here.  They are thought-provoking
    and necessary.  One good point that I pick up is that some have
    painted a picture of the Board that is so black that they may look
    like saints during the Special Meeting.  It's like lowering the hoop so
    they can more easily make slam dunks.  Criticisms of the Board need to
    stick to the (documentable) facts.  It would be inappropriate to
    dismiss the Board otherwise.
    
    Steve

    
    [Permission to forward or re-post this mail is granted.  However, the
     original mail header and names at the end of the message must be
     retained.  The contents of the mail may be shared with any DCU member.]

       I can document with cold, hard facts that the BoD concealed the
    existence of the participation loans for 6 years by excluding the
    auditors notes to the financial statements.  The last year that the
    notes appeared in the financial reports was 1984, the year before 
    DCU signed a "Participation Agreement" with Barnstable Community
    Credit Union.  In fact, DCU may not have even printed and made
    available an annual report for 1985.  The line at the bottom of the
    page of the 1984 annual report states:
    
    "The accompanying notes are an integral part of these financial
    statements."
    
       In fact, the auditors statement concerning the financial reports has
    been excluded from DCU annual reports from 1985-1990 because DCU does
    not publish the notes.  This says a LOT about the information in those
    notes.  Without them, the financial statements you are viewing aren't
    complete and can therefore not be relied on.
    
       In 1987 while DCU has $9.8 million dollars invested in loans
    to real estate trusts on Cape Cod,  Mark Steinkrauss, Chairman of the
    Board, made the following statement in a letter to the membership:
    
    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
    
    'Q. How does DCU invest its money?'

    'A. Because we view DCU as the guardian of members' savings we are
    very conservative in our investment policies.  We reinvest savings in
    member loans.  Additional investments are in government securities and
    federally insured banks.  We deal with the highest quality financial
    institutions and don't invest in any sort of "speculative" instruments.'

    (Note: Quotes around the word speculative are in the original letter.)

    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
    Source: Copied from DCU Annual Reports 1985-1990.  This information was
	    contained in the auditors notes.  The auditors notes were not
	    published with the DCU Annual Reports.

    Loans Outstanding:  (in thousands)
                          1985     1986     1987     1988     1989     1990
                         ------   ------   ------   ------   ------   ------
    Automobile           32,962   51,452   44,384   39,803   34,955   33,510
    Mortgage             25,845   74,557   70,691   72,822   69,723   71,553
    Home Equity              --       --   43,338   63,441   81,203   89,457
    Other Secured         3,463    6,082    6,459    7,212    6,411    5,096
    Unsecured            15,124    9,820   15,073   21,153   35,706   39,721
    Participation loans   2,520    8,010    9,886       --       --       --
      with other CU *
    Commercial RE loans *    --       --       --   12,766   15,332    8,727

    * = Description of participation loans changed to Commercial RE loans.
    
    (Note: Participation loans reached a high of $18 million in 1990.)

    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
    
       Then around July of 1990 the first default on these loans occurred.
    By the end of 1990, DCU had foreclosed or substitantly repossessed about 
    $6 million in property that secured these loans.  In 1990, DCU had
    already charged off $2.6 million in losses associated with these
    participation loans.  Yet no mention of this significant financial
    information was made in the 1990 annual report.  But the auditors saw
    it significant enough to include the following notes to the 1990 annual
    report.  (Notes that have not been made available to the DCU
    membership).
    
    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
    
    Source: Copied from DCU Annual Reports 1985-1990.  This information was
	    contained in the auditors notes.  The auditors notes were not
	    published with the DCU Annual Reports.

    Allowance for Loan Losses:  (in thousands)
    
    				1985   1986   1987   1988   1989   1990
    				-----  -----  -----  -----  -----  -----
    Balance, Beg. Year		 540   1161   1159   1272   1429   1533
    Provision Charged to	 747    243    240    240    240   4406
       Operations
    Loans charged off (members) (130)  (284)  (187)  (140)  (173)  (283)
    Paricipation loans		                                  (2696)
       Charged Off
    Recoveries			   4     39     60     57     37     21
    Balance, End Year		1161   1159   1272   1429   1533   2981
    
    (Note: $2,696,000 loss on participation loans in 1990.)

    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
    
    " (3) Loans

    	The credit union grants home equity loans, residential loans and
    consumer loans to members.  The credit union also participates in
    commercial real estate loans primarily in the Cape Cod region.
    Approximately 67% of the loans granted by the credit union are
    secured by real estate.  The ability and willingness of the home
    equity, single family residential and consumer borrowers to honor their
    repayment commitments is generally dependent on the level of overall
    economic activity within the borrowers geographic areas and real estate
    values.  The ability and willingness of commercial real estate borrowers 
    to honor their repayment commitments is generally dependent on the 
    health of the real estate economic environment in the borrowers 
    geographic areas and the general economy."


    "Real Estate Acquired by Foreclosure or Substantively Repossessed
     ----------------------------------------------------------------

    Real estate acquired by foreclosure or substantively repossessed is as
    follows:

    						Dec. 31 1990
    						------------
    Land					$4,131,000
    Commercial Real Estate			 2,562,000
    						----------
    						$6,693,000

    At December 31, 1990, real estate acquired by foreclosure or
    substantively repossessed included approximately $5,668,000 of
    properties that were substantively repossessed."

    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
    
       Contrast the above information with some of the statements made in
    the 1990 annual report.  DCU's net income for 1990 dropped 87% from
    what it was in 1989, yet "DCU's financial performance improved".
    
    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
    
    "We will continue our prudent lending and investment practices so that
    our members' investments remain safe and sound." (M. Steinkrauss, Chairman)

    "Finally, as we progress through 1991, we will continue to focus on the
    security of funds while providing our members with the best possible
    service."  (M. Steinkrauss, Chairman)

    "As the industry reported unprecedented losses, DCU's financial
    performance improved with Net Income for 1990, on target at .8% or $.3
    million.  We maintain a conservation cash position and invest in only
    the highest quality money-market investments."  (S. Shapiro, Treasurer)

    "Most of our earnings were placed in reserves as we anticipate
    continued pressure on the real estate market, especially in New
    England."  (S. Shapiro, Treasurer)

    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
    
      To make matters worse, Mr. Mangone simply instructed a DCU employee in
    June of 1990 to tranfer $3,523,915 to Barnstable Credit Union.  This
    fact went undetected or unacted upon by the BoD until they filed a
    civil suit against Mr. Mangone.  My question is "How could the largest
    loan transfer in DCU's history have been made without the proper
    authorizations."  This indicates a complete lack of checks and
    balances in the system the BoD had set up to "invest" in these loans.
    
       On October 25, 1990, DCU received a summons from Barnstable
    Superior Court attaching all of Mr. Mangone's funds at DCU.  On
    November 7, 1990, Ann McAdoo, Senior Operations Manager responded to
    the summons stating that a total of $44.16 had been attached.  I
    have yet to obtain a copy of the court case which resulted in this
    attachment.  The fact that the President of DCU had been named in a
    multi-million dollar civil suit should have warranted SOME kind of
    inquiry on the part of the BoD in my eyes.
    
       Yet, the DCU Board of Directors failed to notice or act on any of
    this.  The only thing we have been told they did was ask Mr.
    Mangone "to work the loans".  Now, he is the same person who sold these
    loans to the BoD in the first place.  Was this an appropriate response?
    
       The DCU Board of Directors claims that their first knowledge that
    fraud was involved was March of 1991, when the NCUA shutdown Barnstable
    Credit Union.  Yet it still took the Board of Directors until April 5th
    to remove Mr. Mangone.  I suggest to you that DCU's Board of Directors
    had many glaring danger flags concerning these loans and Mr. Mangone
    long before March of 1991.
    
       They claim people have acused them of fraud.  That is incorrect. 
    What people have accused them of is mismanagement and not exercising
    due care.  The facts above tell me that the BoD was either asleep at
    the wheel or failed to act appropriately given the significant amount
    of DCU money involved.  Given this past history, I can not honestly
    trust these same people to continue on the Board of the credit union
    that I entrust with my money.  The BoD's actions subsequent to all this
    has been one of stonewalling, denial of responsibility, and
    non-disclosure of data.  Their actions have contributed to a general
    lack of trust on the part of many members.
    
       If you have any questions or requiring clarification of any of this
    information, please feel free to contact me.
    

  re .80 (have I contacted Mary about an independent audit), no, I
  haven't. There could be some reluctance on the part of the board to
  such a proposal (though maybe not). But as I believe it's a
  responsible proposal, if presented in a professional manner, with no
  preconditions which would prejudice its findings, it should be
  acceptable to all parties.

  Incidentally, in case it's not clear, here's my reasoning for
  requesting an audit: It's possible (and maybe probable) that the
  members of the Board have acted thoroughly honorably and responsibly
  throughout the Mangone dealings and to the present (though negligence
  is also possible). It's also possible that they fear that any
  information they release in the current climate can be interpreted in
  a way which could not only be damaging to their effectiveness, but
  damaging to the financial security of the DCU, and to any legal
  process against Mangone. They have already seen that some of the
  information released has been presented in this notesfile, somewhat
  out of context, with annotation which creates quite a negative
  impression (whether deserved or not I don't know). The current silence
  and restricted information policy is an effort at damage control. An
  independent audit would provide a neutral forum for the disclosure and
  interpretation of information which would answer the questions raised
  by Phil and others, and restore member confidence in the management of
  the DCU. It would be neither a whitewash nor a witchhunt.

  Let me repeat that I'm not happy with the silence of the Board, and
  would like answers to the questions Phil and others have raised. But I
  don't interpret the silence as stonewalling to protect guilt. I
  interpret it as possible damage control to protect our interests. 

  As long as this interpretation is possible, I can't, in good
  conscience, vote to remove the Board. When, for me, this
  interpretation is no longer possible, I will vote to remove them. That
  would be either after an audit finds fault, or a refusal to cooperate
  with an audit, and continued silence.

Re .84

   Sounds like you'd be the best person to contact DCU and try to set up an
   independent  audit  since you are not part of the non-committee.  Go for
   it! Let us know what you find out.

   Actually it  would be in their best interest to agree since they know it
   would  not  be even started before the next meeting.  I'd like to see it
   done also.

   I don't  know if it's proper, but I would like a list of questions drawn
   up for specific things for an auditor to look for and see what they come
   up  with.   I  wonder if we all in the notes file could get together and
   hire the auditor (acceptable to the board) so there would be no conflict
   of interest from DCU paying them.

   As to the board's silence, I think it's clear they are stonewalling (I'd
   bet even *they* might admit it 8*), but what's not clear is whether it's
   to  protect  their guilt or to protect our interests.  We must decide on
   the  basis of whatever facts we have on our hands at the time (like now)
   since  they  won't  give  us enough facts to really make an intelligent,
   informed  decision.   I've  made  the  personal  decision that I've seen
   enough  deceitful  statements from them to warrant serious questions and
   we get no answers.

   In other  words,  I'm  not  voting  them out because I'm *sure* they are
   guilty  or  incompetent  or  whatever,  I'm  voting them out because the
   information  available  to me indicates serious doubt about the veracity
   of their statements and they refuse to corroborate their statements.

    
    RE: . 84
    
    I totally agree with you on a complete and thorough investigation of
    what has happened.  I, myself called for one long ago after finding
    what I did.  I felt it was warranted.  However, we disagree on the
    circumstances it should be done and its timing.  In my opinion, asking
    a group of people to hire and pay an independent agency to evaluate
    them (and possibly recommend their removal) is a complete impossibilty. 
    It would however be the first order of business of a new BoD in the
    interest of all DCU members and the current BoD.  We WANT a complete
    airing of the facts.  We have gotten stonewalling instead.  That is
    why many feel the need to remove the BoD.
    
    In my eyes, the reality of the current situation warrants:
    
    	A. The dismissal of the BoD.
    	B. Election of a new BoD.
    	C. Complete and thorough investigation of the last 6 years.
    	D. Publishing of findings, clearing current BoD or justifying
    	   collection of bond.
    
    May I remind you and others.  The BoD currently has a $3 million bond
    on it.  If DCU ignores this and does not conduct a complete
    investigation, then the membership would suffer ANOTHER loss of a
    significant sum of money.  Think about it, would any of you initiaite
    an investigation that may result in your dismissal and possibly other
    actions (collection on bond and all that that entails)?  I believe that
    is expecting a bit too much.  In everybodys best interest, they should
    step down so that their names can be cleared.  They cannot be involved
    with conducting the investigation.  The conflict of interests here
    seems pretty obvious.  But then again, the obvious has frequently been
    ignored in many instances.

  I'd just like to say that I'm impressed with the way this discussion
  has been conducted, and take no offense at statements like "if you're
  not against them, you're for them" -- as long as people have allowed
  me to say that there's a third possibility: "none of the above". The
  behavior here shows that there's potential for progress at the special
  meeting. However I do believe it will be a challenge to keep emotions
  in check. In any case, the special meeting should be educational for
  everyone.

    At the informal meeting that a few of us had on October 28 Mark and
    Chuck emphasized that bank examiners had come in and looked over DCU's
    books.  They said that the examiners had good things to say about what
    they found.  I asked if we could see the examiners' report.  I was told
    that I couldn't.  There are two hurdles that we face in having an audit
    or examination done.  The first is having it done.  I have already been
    told that examinations and audits have been done.  The second is being
    allowed to see the resulting reports from the examiners or auditors.
    Now, you're getting into some of the reasons for some folks getting so
    frustrated.
    
    I don't doubt that auditors and examiners have gone over DCUs books.
    I am concerned that it seems to be a pattern to withold this
    information from membership.  I've told Mark and Chuck personally that
    the Board would take a lot of the wind out of the sails of the
    resistance if they were more forthcoming in releasing this type of
    information.  I was mildly criticized by others for helping the Board 
    by offering this kind of advice.  But, I really would prefer the
    relationship between the Board and shareholders to be one of
    cooperation and trust rather than the adversarial nightmare it has become.
    
    Steve

RE a few back.

I believe a motion to adjourn in not debatable.  If the motion is recognized 
by the chair and seconded, it goes to vote without debate.

Fred.

.79> I was bothered by the tone in a number of messages in the mid-.60s on.
.79> This special meeting is supposed to be an exercise in democracy, not
.79> an exchange of personal attacks!!  :-)

.79> Mike Glantz has some serious reservations about voting to remove the
.79> current DCU Board of Directors.  I appreciate reading his comments
.79> (although I tend to agree with about 1 in 3!).  It really annoys me
.79> when the issue degenerates to "you're no good, you're for 'them'".
.79> That's not an appropriate response.  Mike has some perfectly valid
.79> points, and is fully entitled to the opinion that the board should
.79> not be removed without more information being provided.

	I am the person who said that if you vote against removing the
	current board, you are "for them." What I meant is that a vote
	against removal is a vote to perpetuate the status quo. Therefore,
	it is a vote for the current BoD. In my opinion, the worst possible
	result from the meeting would be a "vote of confidence" for the
	board, which they would interpret as a mandate for conducting
	"business as usual." That's just my opinion, and I respect the
	right of anyone else to feel, and to vote, differently.

	Now, while we're on the subject of democratic debate, I would
	appreciate it if you didn't put words in my mouth. I did not
	write that "you're no good" if you're for maintaining the board.
	Nor did I mean to imply it. I also appreciate Mike's willingness
	to debate the majority opinion in this file. However, labelling
	people's honest opinions as "inappropriate responses," simply
	because you don't agree with them (either in content or tone),
	is hardly "democratic."

	Finally, I agree that the debate at the meeting should be civil,
	proper, and considerate of all viewpoints. However, if I have
	something to say, no seargeant-in-arms is going to stop me (though
	the procedures may). So let's curtail the threats of ejection from
	the meeting.
	
	I don't want to get in a mud-slinging contest in this notesfile,
	particularly on any issue other than consideration of the very
	important motions that will be debated at the meeting. So, since
	apparently we work in the same building (I sit in LJO1), if you
	want to discuss this difference of opinion in person, let's meet
	in the cafeteria over a cup of coffee.

	Jim

    so, .83 is a reason to support the BoD?
    
    How many of the current Board were on the BoD in 1985?