U.S. OFFICE OF SPECIAL COUNSEL SEEKS DISMISSAL OF TWO
NATIONAL CREDIT UNION ADMINISTRATION EXECUTIVES
FOR IMMEDIATE RELEASE - 10/19/99
CONTACT: JANE MCFARLAND
The U.S. Office of Special Counsel (OSC) today filed
petitions with the Merit Systems Protection Board (MSPB) seeking the
dismissal of two high-level employees of the National Credit Union
Association (NCUA) on the grounds that they initiated and/or approved
illegal hiring schemes that involved the extensive use of false duty
stations to hire pre-selected applicants. The employees named in the
petitions are Mr. Russell C. White, who serves as the Associate Regional
Director for Programs (ARDP) in NCUA’s Region V (with offices in Dallas,
Texas), and Ms. Dorothy W. Foster, who was NCUA’s Director of Human
Resources (chief personnel officer). Both individuals are currently employed
at NCUA in senior staff positions equivalent in rank to a position in the
Senior Executive Service.
OSC began its investigation into NCUA’s hiring
practices at the request of the Office of Personnel Management (OPM).
According to the petition filed against Mr. White, soon after his
appointment as ARDP in 1996, he devised a plan to avoid the usual
competitive procedures by hiring pre-selected candidates through the use of
false duty locations. Under the scheme, Mr. White caused vacancy
announcements to be posted for credit union examiners in a number of remote
or otherwise low applicant pool locations, including Minot, North Dakota;
Lubbock, Texas; Amarillo, Texas; and Witchita, Kansas. Mr. White never
intended that the selectees would actually work in these duty stations.
Instead, he arranged in advance—either directly, or through an
intermediary—for preferred candidates to apply to these false duty
stations with the intention that they would actually be assigned to duty
stations in major cities, including Tulsa, Oklahoma; San Antonio, Texas;
Phoenix, Arizona; and Minneapolis, Minnesota.
As a result of the scheme, candidates who would otherwise
have competed for these positions, never applied. According to the petition,
in order to cover up the scheme, a false paper trail was established which
included pay documents with starting salaries based on false duty stations,
job offer letters containing the false duty stations, and false documents
resulting in the withholding of state income taxes based upon the false duty
station, rather than the actual one.
Within months after Region V’s program began, other
NCUA regions began to use false duty stations. Thus, according to OSC’s
petition in the Foster case, in October 1996, NCUA’s Region III (Atlanta,
Georgia)—which was then under pressure to increase the hiring of women and
minorities in credit union examiner positions—decided to emulate the
Region V plan. It created false duty stations in Hazard, Kentucky;
Winnsboro, Louisiana; Jackson, Tennessee; and Bristol, Tennessee, and had
pre-selected minority and female candidates apply for positions. Upon their
hiring, these candidates were actually assigned to Atlanta, Georgia; Miami,
Florida; Fayetteville, North Carolina; Jackson, Mississippi; and Mobile,
Alabama. The practice eventually spread to Region II (Alexandria, Virginia)
and Region IV (Chicago, Illinois).
According to OSC’s petition, by no later than January
1997, Ms. Foster—the NCUA official responsible for ensuring its compliance
with federal hiring laws—was aware of Region III’s plans and she
actively participated in the appointment process. OSC’s petition alleges
that over a seven-month period, from January through July of 1997, Ms.
Foster permitted the use of false duty stations in Regions II, III, and IV,
without regard to applicable laws, rules, and regulations, knowingly signed
false appointment documents, and permitted the preparation and processing of
other personnel and payroll documents containing materially false
OSC’s petition charges both Mr. White and Ms. Foster
with multiple prohibited personnel practices, including the granting of
unauthorized preferences, the obstruction of candidates’ rights to compete
for federal jobs, and the violation of various hiring rules including the
so-called “rule of three,” veterans’ preference, and rules creating a
90-day restriction on changes in geographic locations of duty stations.
Because of the seriousness of the offenses, their notoriety, and their
impact on NCUA’s reputation, OSC has asked for a penalty of removal.
The U.S. Office of Special Counsel provides an
independent avenue to protect merit system principles in the federal
government. OSC receives, investigates and prosecutes before MSPB;
allegations of prohibited personnel practices. It is a violation of title 5
to grant an unauthorized hiring preference, to obstruct the right to
compete, and to violate rules and regulations such as veterans’ preference
and the 90-day restriction on changes in geographic duty areas.