In a matter of two months, I left Telco Credit Union to open up a consulting business, and closed the consulting business because Credit Union of Puget Sound (CUPS) was using me full time. I was settled into my new position as Administrative Assistant to Bert Noel when he called me into his office.
He put a memo from the state examiners in front of me and asked me if I had ever heard of a minor infraction cited in detail. It was some really minor error in the way the credit union accounted for something. I had not ever seen such a write up before, but I also had to admit that I wasn't an accountant. I asked him what Chet or Kenny had said about it. He hadn't talked to them. He had just received the memo from the state examiner who was posted in the accounting department since the credit union had been put on the watch list for an investment and accounting problem.
Both Bert and I knew that the credit union was being soundly operated. Bert was not a typical "dress-in-suits" executive. Those who were those types tended to underestimate him. He was a throw-back to the old ways credit unions used to operate, and he was not fully on board with the new way of doing things, namely becoming more bank-like. There had absolutely been an accounting problem with a group of credit unions, and eliminating those who had participated became the focus of the state Division of Savings and Loans, which is the agency that regulated state chartered credit unions in those days.
Other targets for this accounting problem were Les Greenwood of BN West, Jim Whyte of KBR, and Jack Aitken of Tapco. Of the four credit unions, though, CUPS was the only one that had a greater difference in book and market value on the questionable investment to essentially eliminate its undivided earnings.
Bert had made several concessions by that point. He had even hired two retired state examiners to run the accounting department. There was only one reason we could think of that made sense as to how the state was finding these minor items that should have been simply corrected by the accounting department: Chet and/or Kenny were moles.
It was one thing to know that there are saboteurs on staff, and it was another thing to do anything about it. Besides, they could play the blame game. They might even try to implicate Luann who was a trusted longtime employee, but whose office also allowed unfettered access to the state examiner.
We knew we had to trap the moles. We didn't know how we were going to do it, though.
It was getting late in the fourth quarter of 1987. The credit union had already been told by the state that it had to pay dividends from earnings only. We knew that we either had to pay a competitive rate, or pay nothing to have the extra money to help with the rush of withdrawals that would happen if we could not pay dividends.
One morning Chet came in late. He stopped by my desk to let me know that there had been an emergency he needed to deal with. I used the opportunity to create a trap.
I told him about an emergency manager's meeting he had missed that morning. I reminded him about the state's order to not allow dividends unless we could pay them from earnings. In order to assure the ability to pay dividends, we were going to not pay bills until we knew we had dividends covered. The plan was for managers to pass the approval for payment of any bill to other managers as a stalling tactic.
I assured him that we were confident we would be able to do both, but that we felt we needed to do this just to make sure. Also, it was really important that it not be talked about because the state would shut us down if they found out. He understood.
Now, Chet was no dummy. He knew this was the death blow for Bert they had been looking for. He would keep his intentions to himself, and try to give himself plausible deniability for having been the stool pigeon. I was counting on all of that. Sure enough, the examiner made her way to my desk several hours later in the afternoon.
"I understand that there is a plan to not pay the bills as they come in," she told me confidently.
I looked at her confused and asked her to repeat herself.
"The plan to not pay the bills as they come in," she restated. "The one that was discussed at the manager's meeting that morning.
I looked at her totally confused, and asked her, "What manager's meeting?"
"Don't play coy with me," she cautioned. "The emergency manager's meeting where it was planned to not pay bills in order to pay dividends."
I excused myself and brought Bert back with me. "Sue says there was a manager's meeting this morning where we discussed not paying the bills to pay dividends."
Bert was truly confused. He was unaware of my trap.
"They would shut us down in a heartbeat if we did that," he said. "What manager's meeting?"
I assured the examiner that there had not been a manager's meeting that morning, and that there was no plan to manipulate the books to pay dividends. I told her that I was pretty certain that I knew where she got the information. I suggested that she go down to her assigned desk and call her supervisor to let her know she just got caught in a trap, and to send Chet up to see me.
Bert and I talked while we waited for Chet to arrive. He was popular among the employees, and we needed to keep staff morale up. Chet was told that he was done. He was to clean out his desk and turn in all of his access credentials. We gave him the option, though, of having a pizza party to announce his sudden retirement due to whatever family emergency made him late that morning. He opted for that.
After discussing loyalty with Bert, Kenny decided to announce his retirement simultaneously with Chet's retirement so we could have just one pizza party. Sue probably did not attend the party since that was her final day in the credit union, also. Bert and I both had other obligations, and did not attend. We had trapped the moles, but the credit union was still on the state's hit list and we still needed to pay dividends from earnings.
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Other posts you might enjoy:
A Price for Charity
Remembering Dad: Was it a Prank?
Struck from the Jury
Run Tony! Run!