Ten executives face salary cuts, suspensions in hiring case

The National Credit Union Administration has taken disciplinary actions-including salary cuts and suspensions-against 10 executives following an Office of Special Counsel investigation of improper hiring actions at the agency.

The actions, announced Monday by the OSC, represent the largest number of disciplinary actions resulting from one investigation in the office's history.

The most stringent actions were taken against the NCUA's former director of human resources, Dottie Foster, who will take a $75,000 reduction in salary as part of a settlement agreement with the OSC. Foster will also serve a 120-day suspension and resign from the agency next year.

Russell White, NCUA associate regional director for programs in Texas, is taking a $59,000 reduction in salary and a 30-day suspension. As part of their settlements, neither Foster nor White admit any wrongdoing.

The NCUA executive saga began in 1997, when several officials were accused of creating "bogus duty stations" in places such as Minot, N.D., and Hazard, Ky., to eliminate competition for certain jobs. OSC alleged that the scheme "granted an illegal preference to the pre-selected applicants, obstructed the public's right to compete for the jobs and violated assorted laws, rules and regulations." While agency officials claimed they used the hiring authority to improve diversity, only five of the 45 candidates hired through the scheme from July 1995 to March 1997 were minority applicants.

The OSC investigation eventually implicated 10 executives, including Foster and White. Two officials who allegedly played a minor role in the scheme settled with OSC and received brief suspensions. The remaining six officials can still appeal the disciplinary actions taken against them to the Merit Systems Protection Board. Those officials received salary reductions, reassignments and suspensions ranging from 15 to 45 days.

An NCUA spokeswoman said the actions were private personnel matters that could not be discussed. She also said reassignments for Foster and White had not yet been settled.

NCUA oversees federal credit unions and has about 1,000 employees spread across six regions and its headquarters in Alexandria, Va. The disciplinary actions affected executives in at least five of the agency's regions.