Published: June 07, 2009 11:44 pm      

Credit union revote: Ousted incumbents get second chance

Losers in last month’s USSCO Johnstown Federal Credit board of directors election are getting a “do over” thanks to a little-known quirk in the organization’s bylaws and procedures.

The apparent winners are crying “foul,” saying it’s just a case of the old-boys network closing ranks.

“This is really wrong what they are doing,” said Jeana Sweeney of Richland Township, one of the apparent winners. “If you win that vote, you win that vote.”

Three incumbent board members were ousted May 14 after nominations from the floor at the annual meeting created the first election contests in the former U.S. Steel credit union’s 51-year history.

But a requirement to notify all credit union members fell short because about 300 of the 13,000 members have account balances below the credit union threshold to draw interest.

Those members did not receive a quarterly statement that also included the annual meeting announcement.

“We wanted to make sure there was nothing inappropriate in how the election occurred,” credit union attorney Guy Messick said. “Because (the vote) was so close, having 300 effectively disenfranchised members technically violated the bylaws.”

Credit union leadership notified members in late May the election was nullified and a new annual meeting would be scheduled.

But the same notification procedure has been used for years, board Treasurer Donald Riffle said.

“There have never been any contests before, so it didn’t matter,” the 50-year board member said.

Sweeney, Kenneth St. Clair of Westmont and Janet Holbay of Tire Hill defeated incumbent directors Gerald Smith, Rick Wilson and Peggy Miller during the meeting at USSCO’s

532 Oakridge Drive headquarters.

“They just weren’t happy with what happened,” Sweeney fumed. “They dug really deep for this.”

She and St. Clair said the newcomers and their supporters were not happy with the way the board handled the removal of Riffle’s son, Brian Riffle, as chief executive officer. They both said they didn’t like the board’s treatment of Donald Riffle after the shake-up.

The younger Riffle was asked to leave in the fall after a bank examiner raised concerns about $3 million in commercial loans, his father said.

“He said we were in jeopardy of losing a bunch of business loans,” Donald Riffle said. “They were going to go bad.”

After Brian Riffle was separated from the credit union, most of the loans were paid in full, his father said.

St. Clair is employed by the state as a fraud investigator and auditor. He is not troubled by the handling of the loans.

“Talking to various people, it may not have been done 100 percent by the book, but the credit union didn’t suffer any monetary or legal ramifications,” St. Clair said.

“If anything, they may have benefited from it because of the business.”

But St. Clair admits he is friends with Brian Riffle, and is married to Riffle’s sister-in-law.

Friendships and relationships aside, it was time for a change on the board, credit union member and Geistown businessman Robert Stem said. He nominated Sweeney during the May 14 meeting.

“Why not get some fresh ideas in there?” Stem said. “Jeana is a friend of mine. She’s done work for the bank. She’s a good businesswoman. She’s a go-getter. I felt she would be a good candidate. I thought: Some new blood.”

He was shocked to learn the election was nullified.

“I was kind of struck: Like a redo?” he said. “They can do that? ‘Things

didn’t go our way so we are going to do it over.’ ”

The nullification was based strictly on the procedural errors, Messick said.

“I was contacted by the staff at the credit union to make sure there were no procedural errors,” Messick said. “This is not in any way a qualified judgment as to the results of the election.”

Board Vice President Kenneth Mesko said leaders were just following advice from Messick and the National Credit Union Association.

“Once we knew there were people who were not notified, we were told we had to have another meeting,” Mesko said. “There were hundreds who were not notified.”

Mesko would not discuss other issues involved. He said he does not know when the election will be held or if the current board – including the reinstated Smith, Wilson and Miller – will meet prior to the election.

Donald Riffle said more changes could be in the works.

“The only thing I’ve been told is that we will have a board meeting next Thursday,” Riffle said. “There has been some of the discussion as to whether to change the bylaws.”

He said he’s not privy to those changes, but noted the current bylaws require the annual meeting and election before June 1.