| Folks,
During the election, I sent the Supervisory Committee a complaint about
what I saw as their inequitable treatment of the candidate statements.
Regardless of any question of whether that treatment affected the election,
I felt that the action was clearly unequal and therefore inappropriate.
I felt that the Supervisory Committee should face up to this and make sure
that it doesn't happen again. I specifically said that I had no problems
with the candidate statements themselves.
It was long after the election before I got a reply from the Supervisory
Committee, and then what I got was the same form letter that others
received. This letter addressed complaints about the candidate statements
and completely ignored my own concerns.
Accordingly, I forwarded my complaint, along with a cover letter, to
the DCU Board of Directors. As you will see below, I did NOT ask the
Board to do anything about my original complaint. I frankly cannot
think of any formal action they could take that would be helpful to
the DCU. Certainly there are actions they could take, but in my view
they all carry a great deal of risk of harming the credit union.
So why did I inform the Board about this? First, I feel that this
information should be out in the open. More importantly, I feel that
it's useful for them to look back at what happened in the past election so
that it can guide their decisions about how to run future elections.
For your information, here is what I sent the Board. I have not received,
nor do I expect, any formal response from the Board. I did receive an
informal contact, to the effect of "what exactly are you asking us to
do about this?" My reply was to the effect that I want them to bear this
information in mind as they make decisions about the next election.
I'm content with that, and require nothing more from them.
In posting my complaint here, I do not wish to stir up further arguments
or discussions about what went on in the past. I hope that any discussion
that occurs will focus on the FUTURE -- on what we would like to see
in future elections. That, I think, can be helpful to the DCU.
Enjoy,
Larry
PS -- If you are wondering why it took me so long to post this, well, first
I was waiting for a response from the SC -- I felt they had the right to
give me their response before I told anyone else (including the Board).
By the time I got my response, there seemed to be no urgency about posting
this, and there was an office move, and a chip to tape out, and... LS
+---------------------------+ TM
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| d | i | g | i | t | a | l | Interoffice Memo
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+---------------------------+
Date: October 27, 1994
From: Larry Seiler
To: DCU Board of Directors Loc.: MLO5-2/U47
Cc: DCU Supervisory Committee Ext.: 223-0588
Enet: WRKSYS::Seiler
Subject: Concerns about the Actions of the Supervisory Committee
During the election, I sent a memo to the Supervisory Committee
asking them to explain and justify some of their public actions. I
specifically stated that I was not complaining about any action by any
candidate or supporter. Instead, I explained in some detail the ways
in which I felt that the Supervisory Committee's own actions did not
live up to the standards that they had publicly set for themselves,
specifically by illustrating ways their statements were inconsistent.
I asked them to either tell me that they could not explain due to
confidentiality, or else to explain why they considered their actions
justified, or else to acknowledge that they had made a mistake that
they would try to avoid in the future.
I finally received a reply from the Supervisory Committee about a
week ago. Unfortunately, their reply ignored every question that I
asked and answered issues that I had specifically stated that I was
not concerned about. The most charitable assumption I can make is
that they did not actually read my complaint.
If my concern had been with some aspect of the election itself,
then the issue would clearly be moot, since the election is over and
will not be repeated. However, if the Supervisory Committee is going
to supervise another election, then I feel that it is critical to
resolve concerns regarding their supervision of the last election.
If their actions were justified, then I feel that this needs to be
established so that they can be repeated without further controversy.
If there were problems with their actions, then I feel that this also
needs to be established so that improvements can be made.
At this point, I'm not sure what action should be taken in
regards to my complaint. Therefore, I am reporting the whole matter
to the Board of Directors, and I request that you take whatever action
you deem appropriate. While I would appreciate an answer to my
original complaint, I don't expect one at this point. I will be
content if the Board resolves this matter to its own satisfaction.
[ Attachments: electronic copies of my complaint memo to the
Supervisory Committee, my comparative analysis of their statements,
and their form-letter response. ]
Date: Sept. 2, 1994
From: Larry Seiler
To: DCU Supervisory Committee Dept: Graphics/APS
Loc.: MLO5-2/U47
Ext.: 223-0588
Enet: WRKSYS::Seiler
Subject: Request for Justification of Your Actions
The Supervisory Committee exists, so I thought, to be an
independent and unbiased check on actions by the Board and Board
members, as well as on the actions of senior DCU managers. Your
public statements claim that you are in fact filling this role in an
unbiased fashion.
However, your publicly observable actions appear to me to be
massively biased in favor of the current management and policies of
the DCU, and against many who are critical of those policies. I base
this opinion on statements that you have published or given permission
to publish regarding the election material from the Board candidates.
In support of this opinion, I have written a detailed side by
side comparison of statements from the various material, along with
your markedly different responses to what appear to be essentially
similar statements. I have included this comparative analysis below.
I also note that you had "no major concerns" about Lisa DeMauro Ross'
statements implying that her competitors may not protect our money,
are not fiscally responsible, and may have the same effect on the DCU
as the Mangone fraud. Nothing comparable exists in her competitor's
campaign materials, about which you had many major concerns.
I would like an explanation of your actions. Specifically, I
would like you to tell me your justification for the markedly
different types of responses that you gave for the sets of statements
that I quote in my comparative analysis. Do you feel that there is
something about the statements that makes it valid for you to object
to one set and not to the other? If so, what exactly is the
difference? If you cannot justify your differing treatment of
statements by different candidates, will you assert that there is a
justification that you cannot reveal, or will you admit that you
made a mistake and then seek to remedy it?
The safety and survival of the DCU depends in part on faith in
the integrity of those who run the DCU. I feel that I have clear,
objective evidence that the Supervisory Committee is *not* acting with
fairness and integrity in its supervision of the current election. If
there is evidence that I should consider that you have not made public
that justifies your actions, then I urge you to reveal it. If you do
not, then I will have no choice but to assume that I cannot rely on
the integrity of the Supervisory Committee.
Page 2
Attachment: Comparative Analysis of SC Response to Election Material
Folks,
Here is a comparative analysis of the criticisms the SC published about
the 3G election material. Statements from the non-G election material
are mixed in with 3G statements and the SC's reactions. My conclusion
from looking at the data is that the SC's actions are HEAVILY BIASED in
favor of current policy and management. But make up your own mind.
First, I'll present what the SC says about itself and the campaign
material. Then, I'll present statements from the various campaign
material and the SC's comments on them, divided into statements of
fact and statements of opinions or philosophies.
--> NOTE: I do not personally object to any of the non-G statements. <--
--> I object to the uneven treatment by the SC of 3G statements and <--
--> similar or more extreme statements from the non-G material. <--
SUPERVISORY COMMITTEE STATEMENTS
================================
About the 3G material, the SC writes: "We believe that to insure a
process where members' choices are free and informed and because these
materials are being distributed by DCU at its branches, the following
excerpts of the Supervisory Committee's opinion MUST be provided." The
capitalization is mine. Note that the 3Gs tried to change their text,
but the SC couldn't wait one single day to allow this.
About the non-G material, they write: "The Supervisory Committee currently
has no major concerns regarding these materials as distributed with respect
to the current election rules."
About their standards, the SC writes: "...care is taken to specifically
address statements that appear to us to be PROVABLY defaming or misleading.
The Supervisory Committee concerns itself with SERIOUS violations of the
election rules while recognizing that the candidates are entitled to
express opposing views." [capitalization is mine]
Clearly, then, their critique of the 3G material must be items that are
PROVABLY defaming or misleading, and which are SERIOUS violations --
otherwise they wouldn't have felt that they MUST issue a warning message.
Also, clearly the non-G material contains no such statements.
Or so they claim. Let's see what's really there... Does their analysis
of the 3G material focus on SERIOUS violations and PROVABLY defaming or
misleading material, or does it put the burden of proof on the 3Gs? Does
their analysis of the non-G material IGNORE provably defaming or misleading
material and does it IGNORE far more obvious violations than they warned
us all about in the 3G material?
Page 3
Statements of Fact
==================
The following are statements of claimed facts from 3G and non-G election
material, with a summary of the SC's responses to them. Note that the
SC didn't dispute the truth of any of the 3G statements below. 3G
statements are preceded with "3G"; other candidate's statements are
preceded with their initials.
PM: "kept fees to a minimum."
me: Is this accurate? Paul voted in favor of raising fees -- was
evidence presented that there were no alternatives to doing so?
I've seen evidence that some fees are far above the service cost.
PM: "When presented with the cost generated by maintaining a low-balance
checking account, 67.8% of the membership agreed the member involved
should cover the cost rather than the entire membership."
Me: Misleading. Members were not "presented with the cost", and doesn't
mention the other survey question in which a majority says they want
to share costs. Note that the SC criticized the 3Gs for mentioning
one of these survey questions but not the other.
LH: "members who were informed of the relationship pricing policy
overwhelmingly agreed (72%) that it is appropriate."
me: Misleading -- doesn't mention that just 1/4 of the members were
aware of the relationship pricing policy. What would the other
3/4 of the members have said about relationship pricing?
PM: "Enhanced Board communication with the distribution of Board Minutes
and Special Memos... Revised DCU bylaws to protect your rights."
me: Misleading. What did Paul have to do with making these happen?
All of his "accomplishments" are things the Board did, with nothing
to show how he was personally involved. What exactly did HE do?
SC: "no major concerns regarding these materials"
3G: "Did you know that DCU fees are already 21.4% ($505,983 in 1993) above
the national average for credit unions?"
3G: "... DCU does not pay rent for its branches on Digital property. All
of these savings result in greater net income for DCU which we believe
should be shared with DCU's members/owners."
3G: "62.1% of surveyed members believe that 'all members should have
free checking'"
SC: Misleading because other facts or possibilities are not mentioned.
Page 4
PM: "Ross, Haskins, and Milbury offer fiscally responsive solutions that...
do not jeopardize the financial soundness of DCU."
Me: Possible defamation -- could imply the 3G policies jeopardize the DCU,
since Lisa is implicitly comparing their policies to the 3G policies.
SC: "no major concerns regarding these materials"
3G: " ... which DCU management attributed to 'account cleanup'"
SC: COULD be defamation because 'account cleanup' isn't explained,
so COULD imply that the DCU management was lying.
Statements of Opinion
=====================
The SC says that they want to allow opinions to be stated, but here's how
they responded to campaign positions contained in 3G and non-G material.
LR: "To protect your money and keep our credit union a special place,
we must elect Lisa DeMauro Ross, Lois Haskins, and Paul Milbury..."
me: Misleading. Could imply that their competitors will not protect
our money and will make the DCU less of a "special place".
LR: "Lisa responded by leading DCU back to solid business principals --
protecting your investment in our credit union."
me: Misleading -- suggests that Lisa alone accomplished these things,
rather than Pres. Cockburn or the Board as a whole.
SC: "no major concerns regarding these materials"
3G: "... It's time for DCU to stop doing business like a commercial,
profit-driven BANK ..."
3G: "... We believe a more moderate net income is the proper approach
for a credit union."
3G: "The members that have contributed to the success of the credit union
should and must share in that success."
3G: "The ownership should expect no less, in the form of bonus dividends
and loan interest rebates. A portion of profits must be set aside each
year for the membership."
3G: "The ownership should expect no less, in the form of bonus dividends
and loan interest rebates. A portion of profits must be set aside each
year for the membership."
3G: "DCU must listen to its membership..."
SC: Misleading because the DCU's auditors and/or management don't agree
with this view and their position isn't explained. [!]
Page 5
LR: "we ...must decide to stay the course of fiscal responsibility and
stability or change direction, possibly landing DCU in the same
precarious position we were in before."
me: Possible defamation -- suggests that her opponent's policies could have
the same effect as an $18M fraud. Also misleading, since it implies
that her relationship fee system is what saved the credit union.
SC: "no major concerns regarding these materials"
3G: "The capital ratio must be grown ... However, this should not be the
sole focus of management and the Board."
3G: "We believe it is inappropriate to fee the membership when there is no
good business reason."
SC: Misleading because it implies DCU management isn't acting appropriately
and they can argue that they are behaving appropriately.
CONCLUSIONS
===========
The SC considers many statements by the 3G's to be so unfair that they
"must" warn us against them. They told the 3Gs that they have "material
concerns" about their statements. But the SC has "no major concerns" about
equivalent or more extreme statements by the non-G candidates.
Again, note that I have no personal concerns about the non-G material.
I consider some to be misleading, but I support their right to state
their view of the credit union as they see it, and I see nothing
improper in their statements. I also support the right of the 3G
candidates to state their view -- but apparently the SC doesn't.
Any questions?
Larry Seiler
[ Final attachment: form letter from the Supervisory Committee.
My copy was postmarked October 16th. ]
September 16, 1994
RE: Digital Employees' Federal Credit Union 1994 Rescheduled Board
of Directors' Election
To Whom It May Concern:
This letter represents the Supervisory Committee's conclusion regarding
complaints of campaign violations submitted to the Committee during the
rescheduled 1994 Digital Employees' Federal Credit Union ("DCU") Board
of Directors' Election. All balloting for this election ended on
September 15, 1994 and results are scheduled to be announced
September 20, 1994.
The Supervisory Committee has had the task of enforcing Election Campaign
Rules promulgated as a result of the invalidation of the balloting conducted
in connection with the originally scheduled 1994 Board of Directors Election.
In fulfilling its responsibilities, the Supervisory Committee has attempted
to balance each candidate's right to freely and vigorously campaign with
each shareholder's right to an informed and free decision as well as an
orderly process. The Supervisory Committee routinely consulted with experts
in attempting to carry out its responsibilities. While numerous complaints
have been received, it should be noted that campaign literature provided
at branches of DCU and mailings by several candidates appear to have had
little impact on the balloting. This conclusion is based on the fact that
there has been little material picked up by members at DCU branches and very
few requests for replacement ballots as a result of the mailings.
The Supervisory Committee has determined that there were several campaign
violations during this election. However, the Committee has also determined
that: (1) appropriate action in response to violations has been taken;
(2) the violations had little causal effect on the balloting; (3) on balance,
all candidates have had an opportunity to freely and vigorously campaign;
(4) shareholders have been given an opportunity to make a free and informed
choice; and (5) on balance, the process has been orderly.
It is, therefore, our opinion that the election process has not been
significantly tainted and that the results should be free from substantial
challenge.
Sincerely,
Supervisory Committee
|
| Here are a few thoughts on ways the SC might be constructively
involved in the next election:
1) Perform "first line" screening of election issues, on behalf
of the Board. The Board is responsible for how the election
is run, but I think there's value in delegating the hands-on
part of running the election to a separate group, to reduce
the degree of partisanship (or perceived partisanship) in the
process. I think the SC is a logical group to pick.
2) Make recommendations on complaints about election violations.
Again, I think its valuable to have a separate group than the
Board actually hear the charges and gather information about
Perhaps the role should be to present the data and their them.
conclusions to the Board, rather than to have independent and
absolute power to decide on the complaints. Or perhaps the
SC's role should be to decide these issues. If the election
rules are written correctly, it shouldn't be as contentious
to figure out if a campaign action is a violation.
Here are some things that I think the SC should NOT be involved in:
1) Defining the election rules. Certainly it's appropriate for the
SC to make proposals, but election rules are policy, and pretty
important policy at that. The Board needs to be the ones who
define what the rules are, for themselves, for management for
DCU employees, and for other members.
2) Initiating complaints of election violations. I don't think the
SC should take on the roles of both complainant and judge. I
think the SC should leave it to others to make a case for any
given action being a violation, and should confine itself to
responding to such claims.
And finally, here are some suggestions for what might be in the
new election rules:
1) No secret complaints. I think that the SC should require
queries about potential election violations to be in writing, and
I think the written statement should be provided to the candidate(s)
that it is about, so that they can send the SC their response. I
don't see any value in allowing a secret complaint about a public
election action. I do see that allowing secret complaints harms
the openness of the election process and makes it easy for the SC
to be or appear to be biased in its handling of the complaints.
2) Name of a responsible candidate on all election material.
If a candidate (not just a committee) isn't willing to take
responsibility for a campaign document, then I don't think it
should be distributed.
3) Here's an idea from Paul Kinzelman: provide advance copies
of DCU-distributed election material to all candidates. This would
allow candidates to raise issues of election violations in advance
of the distribution of the documents. The schedule would have to
be arranged so that decisions could be quickly rendered on any
queries that are received.
4) Finally, and possibly most importantly of all, the election rules
should specifically disallow factual claims that are false on their
face, but should specifically allow any statement of opinion that is
otherwise legal. There should be none of this nonsensical "but you
didn't state ALL possible facts and considerations" stuff that we
had in the last election. If a candidate feels that an opponent
is not stating all of the facts, then that candidate has the means
(including through DCU-distributed literature) to bring additional
facts to the attention of the membership.
Comments?
Larry
|