Vote shifts board of credit union
Members of Hawaii’s second-largest credit union voted two new faces onto its volunteer board of directors and ousted the chairwoman, reflecting what many said was a need to change the ways of the old board, whose leadership recently came under fire.
Lowell Kalapa, president of the Tax Foundation of Hawaii, and Bill Milks, a local attorney, were the two top vote-getters, respectively, for the three board seats up for election at Saturday’s annual meeting of the Hawaii State Federal Credit Union, a $1 billion nonprofit institution with 75,000 members.
Retired state administrator David Shimabukuro, an incumbent, picked up the third seat. Failing to get re-elected was Beverly Ing Lee, who headed the board. Peter Leong, former credit union president, did not seek re-election.
ELECTION RESULTSThe three top vote-getters were elected to the Hawaii State Federal Credit Union’s seven-member board of directors:
*Incumbent |
The previous directors came under heavy criticism after the Honolulu Star-Advertiser published a January front-page article that revealed an unusually generous board-approved benefits package and multiple examples in which federal regulators questioned their actions in recent years.
Lee was singled out in several significant examples, including the board’s use of her travel agency to arrange official trips, frequently at ticket prices higher than what the airlines offered directly, according to confidential regulatory documents.
Several days after the article appeared, the directors voted to reduce their benefits. They also defended their stewardship, noting the credit union’s healthy financial condition and stellar growth.
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Dissident members, however, continued to campaign to get three new directors elected, including Kalapa, Milks and businessman Tom Pires. Although the dissidents fell one short of a clean sweep, they applauded Saturday’s vote nonetheless.
“This will change the poisoned culture of the board, ensuring that the directors concentrate on representing members’ interests rather than their own,” said Warren Hamamoto, a retired banker who campaigned for the new directors.
Kalapa and Milks said many members told them they were unaware of the board’s benefits package and governance issues until reading the newspaper article.
“To a person, everyone said there was a need for change,” Milks said.
Kalapa cited a recent anecdote to underscore what he called the dysfunctionality of the old board. Even though the credit union regularly deals with one law firm, the board apparently hired an attorney with another major firm to help with Saturday’s meeting, according to Kalapa and others.
But the credit union’s president, Deborah Kim, hadn’t seen any contract
engaging the attorney’s services and didn’t know how much the institution was going to pay him, Kalapa said. A spokeswoman for Kim verified those details.
“It sounds like the credit union is a plaything for (the directors), to use as they wish,”Kalapa said. “It’s about time the board be held accountable.”
Former Vice Chairwoman Louise Akamine, who became acting chairwoman with Lee’s loss, declined comment on Saturday’s results, referring questions to the administration’s marketing office. That office did not address Kalapa’s criticisms.
Lee, the ousted chairwoman, did not respond to a request for comment relayed through the credit union.
Several employees and members said Saturday’s 13,500-voter turnout — 25 percent higher than last year’s — was a record for the institution. Many members previously told the Star-Advertiser they were going to vote for the first time because they were disgusted by the recent revelations.
The new board plans to meet soon to select new officers.