NORTH CHESTERFIELD, Va.–Alleging a “rigged election” that favors board incumbents, four people who sought seats on the board of Virginia Credit Union are stating their nominations were never even considered and have now gone to NCUA and the State Corporation Commission seeking to have an upcoming board election delayed.
Moreover, in their complaint to NCUA, the four individuals allege that the credit union has not held an actual free and open election in at least five years.
All four individuals who were seeking to be nominated reported they had the same experience, saying each contacted Virginia CU about becoming a board candidate, were told the credit union would follow up, and then never heard anything else, even in cases where they contacted the credit union again.
VACU Says Procedures Were Followed
In a statement to CUToday.info, a spokesperson for Virginia CU said, “Virginia Credit Union has an established governance process, defined in our bylaws, for the election of members to its board of directors. Virginia Credit Union's board followed these procedures consistently in nominating candidates for the board of directors ahead of the 2022 Annual Meeting. We respectfully disagree with claims questioning the credit union's election procedures. The board has followed its established process.”
But the four people seeking board nominations said they disagree, and have filed a formal grievance with NCUA and are also filing a complaint with Virginia’s State Corporations Commission to stop what they are calling a “sham” election.
In a statement, the four individuals—Frank Moseley, Richard Walker, Tori Jones and Kati Hornung—said that in order to ensure that incumbent directors are re-elected, VACU blocked the four of them from running for the board in the member elections scheduled for March 23rd, “taking away the right to vote from its member-owners.”
The group is calling on NCUA to postpone the election date and for a new election to be conducted with all nominated candidates on the ballot. They are further calling on the 310,000-member Virginia Credit Union to hire an independent third party to conduct a “real election” in the Spring and to provide “proper notice” to all members of that election.
Three Candidates, Three Seats
According to VACU’s website, there are currently three people nominated to serve on the board for three seats up for election, all of whom are incumbents, including Chairman Robert B. Jones, Jr., who has served on the board since 2015 after beginning as an associate member.
The other candidates are Tracy McCabe, who has served on the board since 2018, and Kimberly Baine, who is currently an associate member and who joined the credit union in 2021.
All VACU board members serve four-year terms.
In addition, on its website VACU says board nominees, “who are recommended by the board are elected by the membership at an annual meeting. All VACU members are informed on the annual slate of nominees. To allow for advance notice to members about the nominees and proper vetting of candidates applications, no nominations are accepted at the annual membership meeting.”
But that’s just the issue, say the four members who have been seeking nominations and who are alleging they were never given proper evaluation, or even provided a return phone call.
Jake Schlachter, executive director of We Own It, which describes itself as a national grassroots organization for credit union and cooperative members, said in the statement announcing the challenge to the VACU board election, “A credit union’s board members have a legal fiduciary duty to the member-owners. It’s hard to see how VACU’s board denying members their right to run or vote for the board is in members’ interests or a good faith discharge of directors’ fiduciary duty to members.”
The Four Challengers
That fiduciary duty is a point raised by all four of the people who said they were seeking a board nomination, all of whom are active in their communities in various ways.
In a released statement announcing their challenge to the election, the four individuals offered these bios:
- Moseley is a social entrepreneur, a Certified Financial Literacy Instructor, a relational organizer and founder of the Social Education for Economic Development Initiative (S.E.E.D. 4 All), an organization that seeks to remove barriers adversely impacting economic growth for low to moderate-income people of color in underserved communities of Virginia. He serves as director of Democracy Centers of Virginia and for The Center For Common Ground, informing, organizing and mobilizing to empower communities of color to get out and vote.
- Hornung is the co-founder and director of VoteEqualityUS, a nationwide, nonpartisan, grassroots effort to ensure the 28th Amendment (Equal Rights) is added to the Constitution. Prior to running VoteEqualityUS she ran VAratifyERA, Virginia’s campaign that achieved Virginia’s ratification of the Equal Rights Amendment in January, 2020. Hornung said she has a background as a CPA.
- Walker is the founder and CEO of Bridging the Gap in Virginia, a Richmond non-profit established in 2009 with the mission to empower ex-offenders, veterans, persons in alcohol and substance abuse recovery, and those impacted by chronic homelessness. The bio says Walker has assisted approximately 1,200 Virginians with employment.
- Jones, a native of Farmville, Va., is a community advocate, educator, entrepreneur, doula, and yoga instructor. In 2021, she started up her social enterprise, Beyouniquorn, LLC, to focus herself on giving back to her community through yoga, integrative therapy, and joining expecting mothers on their birth journey. Jones is now a public high school biology teacher who is seeking to provide a role model for Black teens interested in studying science.
Complaint Filed With NCUA
In the complaint filed by Moseley with NCUA, he states that in September of 2021 he, Hornung, Walker, Jones, and possibly others -- requested information on how to run for the VACU board of directors and subsequently filed the paperwork to run in the Spring 2022 elections, when three seats would be up for election.
The complaint says VACU Executive Assistant Viki Frankenburger acknowledged receipt of the paperwork (a copy of which is attached to the complaint, in addition to other attachments).
The complaint says the VACU website states that candidates must file to run by Sept. 30 of the previous year for a Spring election so that the board's nominating committee has adequate time to interview all candidates and properly vet them to ensure they're qualified.
“Per the bylaws, the nominating committee is comprised exclusively of board members chosen by the board chair, Robert Jones,” the complaint states.
“After filing our paperwork, instead of receiving a prompt request for an interview, the four of us heard nothing. Not one of the candidates was contacted. Finally, on Feb 1, 2022, after months of silence, I emailed Ms. Frankenburger to request an update, along with the chair of the board nominating committee, Brian Jackson,” the complaint reads. “Ms. Frankenburger wrote back on Feb . 2 confirming that, while the nominating committee agreed that I was qualified, (they) would not be nominating me to appear on the ballot. I would not be allowed to run for the board. Each of the other candidates received an identical response when they also contacted VACU. No reason was given, no selection criteria, no reason for why it was apparently unnecessary to even interview us, or how the nominating committee could decide who it wanted to nominate without even talking to a single candidate. Nor was any reason given for why this decision had apparently been made long ago, but no notice was given to any of us that we would not be on the ballot.
‘Maybe We’d Go Away’
“Almost like the board hoped that if they just ignored us, maybe we’d go away,” the complaint adds.
The complaint further alleges that VACU changed its bylaws so that members at the annual member meeting cannot nominate candidates from the floor, cannot petition with signatures to be a candidate, cannot offer an amendment to the bylaws or vote on one.
“The only way for a member to run for election is to be nominated by the board nominating committee, which based on my experience and that of the three other member-owners who filed to run, is clearly just a vehicle for incumbents to retain control of the board,” Moseley stated in the complaint. “For at least the past five years for which online records are available, the board nominating committee has only nominated incumbents or hand-picked ‘Associate Directors’; and it has only nominated three candidates for three open seats, so that no election has actually been held at Virginia Credit Union in at least five years -- and I suspect much longer.”
Moseley said on Feb. 7, 2022 he wrote to Board Chair Robert Jones via Frankenburger to say there was a lack of transparency and democratic integrity of the process, and that he and others share “grave concerns about the governance of the cooperative.”
‘Soviet-Style Election’
“I requested a phone call with Chairman Jones. Ms. Frankenburger confirmed receipt of my request and that she would be in touch after contacting Chairman Jones,” Moseley said in his statement to NCUA. “I then heard nothing back, concluding that Chairman Jones refused to speak with me about those concerns. Worth noting that Robert Jones is the board chair responsible for choosing the board nominating committee members AND one of the candidates up for election this year and presumably about to ‘win’ another term through this Soviet-style election.
“This is no election; it’s a sham. And since VACU’s board has been conducting ‘elections’ this way for at least five years, it’s likely that not a single currently serving director has actually been elected by the members.”
Moseley told NCUA, “There's no investor-owned corporation in the country that would be able to get away with stripping its shareholders of any say in governance. How does the board of a democratically owned and controlled financial cooperative think it can get away with it? “
What’s Being Sought
In the complaint, Moseley said the group is asking NCUA to:
- Vacate the “sham” election on March 23
- Require a new election to be held with all candidates who filed properly in September 2021 to be on the ballot
- “State this as policy, that no credit unions in the country will be permitted to remove member owner oversight, participation in governance, or democratic control, thereby removing the temptation of misguided boards to try”
- Stay involved at VACU to ensure these changes take root, including reviewing and documenting VACU’s elections practices during regular audits and communicating
What Each Person is Saying
Each of the four individuals challenging the VACU election participated in a call with the media. Below is a look at some of what each had to say.
Frank Moseley: ‘Up to Us to Fight’
Moseley sees the issue as far larger than just Virginia Credit Union.
“Democracy is under attack and this is happening in many places in this country right now,” he said, adding democracy must be defended, and in this case it’s the duty of the credit union’s chairman to ensure democratic member control.
As stated in the complaint, Moseley questions whether VACU Chairman Jones was “ever actually elected” by the membership.
“It’s now up to us, members of Virginia Credit Union, to fight for its defense and that's what we intend to do,” he said, adding he believes no cooperative can be operating safely and soundly and in the interests of its owners if the members do not have a voice.
“It is very hard to see how it is in the benefit of Virginia Credit Union’s member-owners to lose the benefit of member ownership in a credit union, to be prevented from having a choice of candidates to vote for and to be prevented from running for the board of the credit union itself,” Moseley said.
Moseley, who said that under Virginia law a court can postpone the meeting, added, “The rightful and lawful owners of this $5-billion cooperative financial institution are not going to let its current leaders just declare themselves the new owners, answering to no one. This is our credit union. This is our co-op. We own it. Not the CEO. Not the board.”
Richard Walker: ‘I Should At Least Get an Interview’
Walker said that he, too, met the board nomination application deadline and was informed he would receive a call to have a interview as part of the vetting process, but “I never heard back from anyone. I never received a call to say, ‘Mr. Walker, this is how the process is going to take place.’ The next thing I knew was when I reached out as the direct result of not hearing from anyone, I was told that the board had already nominated several individuals, and that that had happened without my knowledge. It was disrespectful. I felt it was underhanded.
“We’re here to hold them accountable. We’re here to find out and get the answer as to why the four of us were denied that possibility of (being part of the) process of becoming one of the board of directors.”
Walker, who said that he has had at times more than six-figures on deposit with Virginia Credit Union and that that should at least get him an interview, stated that as an advocate in the community and throughout the state of Virginia he doesn’t see any evidence of a $5 billion institution reinvesting in its communities, which he believes should be “their utmost priority.”
“Our democracy is being taken away. Our ability to have a say-so in what goes on in the governance of credit unions, in the General Assembly and the governance of cooperative electric corporations--we should have they say-so as citizens, as members of all of these entities,” Walker said.
Tori Jones: ‘Not the Values a Credit Union Should Stand For’
A five-year member of VACU with both a personal and business account, Jones said she was seeking to serve on the board because she has a good understanding of the needs of the community.
“In my opinion, that should be something they would be looking for in candidates for the board of Virginia Credit Union,” Jones said. “Throughout the process I waited for a call back. They talked about reaching out to us. They said there would an interview process and as time went on and on and I reached out to see if I had missed a call or if I had missed an attempt to contact me. They let me know that I had not been chosen as a candidate for the board election and clearly, it was seen that the idea was for me to forget about it, and to forget that I had ever applied.
“Letting it slide would validate the notion that democracy is dead,” Jones continued. “And that the people really don't have a voice; the people really don't have a say-so in what goes on inside the credit union. It is of the people, by the people and it is not the values a credit union should stand for. I am here to hopefully bring some awareness to this. I hope this process is something that opens eyes and brings awareness to this. It is unjust, unfair and it’s not democratic.”
Kati Hornung: ‘This Just Doesn’t Smell Right’
Hornung said that from her perspective a $5 billion credit union must have good governance and be transparent with good processes in place.
“We may not have to entirely appreciate every decision made by a board, but we should all be able to agree that their process is good, and I think that the other candidates and I are really great evidence that this process was not,” she said. “It is not acceptable as a member of the credit union. I don't have most of my personal assets with the credit union right now, and thank God. This is the kind of governance where boards do what they want and who knows what’s going to happen.”
With a CPA background, Hornung said she has opened an account for her daughter as part of an effort to teach lessons in personal finance, and she had hoped to bring to the board her perspective on the need to really support financial literacy in the community.
“Virginia Credit Union has all the pieces in hand and could be doing an incredible job in Virginia,” Hornung said. “That was basically what my whole application was about. I personally think I should have warranted at least a phone call and I didn't even get that. So, we're basically ignored.
“I think that our experience is probably a story worthy of being told. It's worth asking why a private board in charge of $5 billion credit union has not been hosting elections for five years and now is trying to take the future electoral process out of the hands of the members,” she continued. “It’s not how member-owned groups are supposed to be run. This just doesn't smell right.”
Looking Ahead
Moseley, who was responsible for making the three other board candidates and others aware of the opportunity to run for a board seat at VACU, said that at the very least he believes the credit union and its board should have heard their “points of view.”
When he learned everyone had received the same response from the credit union and were getting the same “kick the can down the road” response, he said it was decided to take action.
In response to a question from CUToday.info, Moseley said he has not heard anything from the credit union since taking the cause public, and that he continues to ask for a meeting with the credit union’s chairman and for a list of members eligible to vote.
Moseley said he is hopeful it will not come to the point of litigation.
“We’re not trying to vilify anyone. We hope that we can use this opportunity to call on these people who are in these board seats to do the right thing and hold a free and fair election for the member-owners. If we have to pursue any litigation, we are prepared to do so,” he said. “March 23 is right around the corner, so we hope to hear very soon. We are individuals who are capable of pooling our finances together to be able to hire someone on our behalf. If there is someone who has the legal chops to take on this fight with us, we would welcome their support as well.”