By Frank J. Diekmann
I was ready. I was waiting. And I was wrong.
OK, maybe not so wrong, I misforecast. But I was fully prepared for the phone call or the email or both after CUToday.info recently ran a story featuring Richard Mangone, the CEO who did more than 20 years in prison for helping bring down one credit union on Cape Cod with a huge fraud while putting a pretty big financial ding in another.
“How can you glorify a CEO convicted of a crime of such magnitude?” I was prepared to hear. I’ve gotten that question before after similar stories when some have argued it should be good riddance for any CU folks who opt for a black hat. But this time, not a complaint, even though the story was one of the most highly read we’ve published this year.
I had planned to respond that anyone who believes losing everything, from money to family to reputation, and spending two decades in a 10x10 box you’re sharing with another person somehow glorifies the experience, well… I suppose I won’t have to tell anyone that.
What Wasn’t in the Story
As an aside, there were a couple of notes related to Mangone that weren’t included in the story. I’m showing my “seasoned veteran” status when admitting I was working as a reporter at the time Mangone was arrested and went on the lam for more than a year, before he finally turned himself into a Catholic priest in the days Bill Clinton was president (he could have used a priest himself).
At the time, before the scheme collapsed, I was told NCUA received a call from a member who had been used as a straw borrower wanting to know why he was now being asked to make loan payments, saying he had been told he would never have to. After missing all the red flags, that one finally rang an alarm bell at that agency.
At the time someone from among all the people hurt and angered by the misdeeds of Mangone and a handful of confederates sent me a t-shirt they had printed that I held onto for a long time. It featured Richard Mangone’s face, and the words, “Don’t Be a Dick.”
Where Have We Seen This Before?
One more note: I’m sorry to say, but things haven’t changed much since the early 1990s when Mangone was arrested and sent to prison for loan fraud and embezzlement that cost the insurance fund $40 million. On the same week I was interviewing him, another credit union CEO, Edward Rostohar of the now cancelled CBS Employees FCU, pleaded guilty to an embezzlement of—you guessed it—$40 million (from a $21-million CU).
I asked Mangone about that. “Credit unions must be more diligent in watching the CEO,” he said. “If they have an expensive car, really nice clothes, that’s a signal something is awry. My board of directors trusted me too much. I was really good at hiding things.”
As part of his guilty plea, Rostohar agreed to forfeit bank accounts; homes in Studio City, Calif., Reno and Mexico; four vehicles, including a Porsche, a Tesla and a Lexus; and luxury watches and jewelry, prosecutors said.
And in words eerily similar to those used by Mangone now, Rostohar told the court, “Somewhere along the line I lost focus of what is truly important in life and I lost my soul. I missed out on so many important things because I was selfish and greedy. The best thing that happened to me was getting caught.”
What CEOs are Saying About Planning
During the recent Catalyst Corporate Economic & Payments Forum in Frisco, Texas (held appropriately at the Cowboys’ Star training complex, where owner Jerry Jones teaches a master class in payments), I had the pleasure of moderating a session with three CEOs who talked about how they go about doing their strategic planning, and how it is changed.
As I was moderating, I could only take sporadic notes, but here is some of what I was able to jot down:
- “I’ve taken myself out of the process. We have brought in a facilitator who matches our needs, especially as we have transitioned to a sales and service culture.”
- “We ask staff, ‘If we could achieve only one goal, what would it be?’ We want everyone on the same page.”
- “We have really changed our planning process. We now partner with other entities and do road trips to get insights on what it is they are seeing. We have done them to Madison, Wis., to visit with CUNA Mutual, and to Catalyst Corporate. Knowing the direction they are going helps us in our planning. Planning never stops; it’s not something to do once a year, we do it all year on a regular basis.”
- “We ask two questions: what are we going to do and why? And then who are we and who do we want to be?”
- “The focus is on culture. It must be. People must understand the why of the plan. We replaced our old mission statement with a purpose statement. It helps answer why do you come to work?”
- “Our planning session is a day and a half, with the board there just for the first day of the meeting. We use a facilitator and usually finish by November.”
- “You need to know what you’re trying to solve. Our goal is to have more discussion with the staff.”
Look North For a Great (Brief) Reminder
While credit unions in the U.S. are rolling out CUNA’s “Open Your Eyes to a Credit Union” awareness campaign (including in Los Angeles this week), Canada’s credit unions have opened their eyes to a new national brand program aimed at highlighting defining principles of the country’s credit unions, including what the association said consumers are really looking for. It’s all summed up in the slogan: “You First, Banking Second.”
That’s great. In those four words and six syllables lie a strong reminder being wordy is seldom the answer; there is great power in brevity, although it’s not easy, which is why we so seldom see brevity in other CUs’ slogans and “vision statements” (and political speeches and internal emails at the credit union and toasts by the best man/maid of honor at weddings, etc.).
If you don’t agree, I can give you 9,200 more words on the importance of being brief, but I’m guessing you’re good.
Hacking Made Easy, Thanks to You
You already know all about the importance of data security for your members and yourself? But just how easy is it for hackers to grab your data or that of a member? Very easy, in large part because you’re helping the bad guys
Need an example? CNN recently asked a white hat hacker to attempt to steal its tech reporter’s own data—the same tech reporter who frequently writes about data security. Thanks in part to info the reporter had posted on her personal Instagram, in no time the hacker had obtained some critical personal information.
“I’m here to tell you, it's disturbingly easy for them to do—even to someone like me who covers technology,” wrote reporter Donnie O’Sullivan. “It's a lesson for all of us: be careful to think about what you're sharing on social media and how that information can be used against you, and next time you're on the phone with your airline, hotel, or bank and they let you access your account, think about the questions they are asking you. Using two of my posts -- an Instagram check-in at a hotel on the west coast of the United States and a tweet about a piece of furniture -- a hacker was quickly able to get my home address and my cell phone number…”
It makes one wonder: is the first reaction of some people when they are hacked to Instagram the news? Now, are you logging out of everything right now, or do you want to read more? For the full account, go here.
Frank J. Diekmann is Cooperator in Chief at CUToday.info and can be reached at Frank@CUToday.infoor followed @FrankCUToday.