PORTLAND, Ore. – A longtime member of St. Helen’s Community FCU filed suit against the $160-million credit union yesterday, claiming the incumbent board and management rigged last year’s vote to recall a majority of the board.

“The fix was in,” said Steven Knebel, of last September’s recall petition. Knebel said the credit union’s bylaws barred anyone from voting who did not attend a special meeting called for the recall. Knebel, who says his wife’s family has been involved in the credit union for five decades, said he has been trying since the special meeting to get an official vote tally, which credit union officials have never made public. But, he says, it was clear that a majority of the 200 or so members present at the special meeting favored the recall.

St. Helen’s was chartered to serve employees of St. Helen’s Pulp and Paper Company and now serves Columbia County and Sauvie Island, Ore. On Wednesday afternoon CEO Brooke Van Vleet said the credit union had received notice of the lawsuit and “after careful review...wholeheartedly believes it is without merit.”

“We are prepared to vigorously defend our position,” said Van Vleet. “We feel this lawsuit is an unnecessary disruption to our number one priority…to serve our members and the communities of Columbia County.”

Knebel and other members petitioned for the recall of the majority of the seven-member board after the credit union announced an agreement to merge with nearby Wauna FCU, even after they were assured during last June’s annual meeting that there were no mergers being considered. The CEO of the credit union was eventually forced out and the longtime chairman of the board named as interim CEO. Eventually, St. Helen’s brought in an executive from California’s First Tech FCU as CEO and the proposed merger was terminated.

According to Knebel, the credit union’s bylaws state that “only those people present at a special meeting for that purpose (to remove a director)” may vote, thereby voiding mail-in ballots. “There’s no provision for a mail-in,” Knebel told Credit Union Journal yesterday.

Knebel charges in his suit that mail-in votes were illegally solicited by the CEO. In a letter to members prior to the special meeting, the CEO, Brooke Van Vleet wrote, “While respecting the members’ rights to voice their opinions through this process, I strongly advise you that an unwarranted and impulsive recall at this time will be disruptive to the credit union.”

“The ineligible votes were illegally solicited and unduly influenced with the specific intent to fix the election outcome with the improper use of membership funds,” states the suit Knebel filed in district court Feb. 13. He says the credit union spent from $75,000 to $110,000 on the costs of the recall, including mailing ballots.

After the special meeting, credit union officials announced that 1,431 ballot were cast, but declined to disclose the actual vote count. Knebel, who owns Oregon Indoor Organics in Rainier, said he doesn’t have anything to gain from the lawsuit. He wants to put the matter before a judge to decide between him and the credit union. After the Sept. 4 special meeting, two of the seven directors – including the chairman of 28 years – were defeated for reelection, but the recall fell short for the other five, according to the credit union.

 

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