Handling of various personnel matters
Phoenix, ACC/Denver
- American Founders Life,
Tatum Place Apartments, Insurance West, Pontchartrain Hotel, Crescent Hotel and Lincoln, including EEOC reporting requirements and affirmative action requirements, maternity leave issues, discharge issues, department of labor investigation, alleged discrimination matters and terminations.
I hope you have had a chance to review Dick Thornton's memorandum of last week. As he indicated in the memorandum, there are several files he is in the process of checking out, and he will have some follow up information shortly.
As I indicated to you at our luncheon meeting, I intend to do some follow up on my own of the professional relationships that our subject has had, both in Washington and San Francisco. I will be gathering information in the next couple of weeks and will have a more detailed report at that time. The key to the professional inquiry is to determine what influences our subject has had with the bank board related work, which hopefully will provide a key to his pronouncements. I will be in touch shortly.
LINCOLN ENTERED INTO THIS AGREEMENT TO RESOLVE ALL OF THE ISSUES RAISED
BY THE 1986 EXAMINATION AND THE REGULATIONS CONCERNING IT BETWEEN LINCOLN
AND ORPUS, LEADING TO THIS AGREEMENT.
OUR REAL ESTATE AND THE EXTRA LAND YOU ARE GOING TO BUY - PAGE 8.
DECIDED THAT SOMETHING SPECIFICALLY SHOULD BE IN THIS WHICH STATED YOU
COULD BUY MORE LAND.
TOOK OUT THE LAST SENTENCE IN PARAGRAPH B. TWO PERCENT OF CURRENT REAL ESTATE.
UNDER THIS AGREEMENT YOU CAN BUY AS MUCH AS YOU WANT. DOCHOW SAID THAT
HE WANTS OUR WORD THAT WE ARE NOT GOING TO BUY A TREMENDOUS AMOUNT OF
LAND. ENFANCE, DEVELOP, IMPROVE AND/OR MARKET TOOK OUT - NO LIMIT ON
ON THE AMOUNT OF LAND PURCHASED AND IF IT WAS MAJOR, WE WOULD LET THEM KNOW.
DOCHOW SAID THAT WE ARE NOT GOING BACK, WE ARE GOING FORWARD. THEIR POSITION
IS THAT THEY WILL NOT COMMENT ON THIS AT ALL TO THE PRESS UNLESS WE SAY
SOMETHING WHICH INCORRECTLY MENTIONS WHAT THIS IS.
DOCHOW SAID THERE ARE A LOT OF LOOP HOLES AND A LOT OF THINGS YOU COULD DO
THAT ARE NOT TECHNICALLY COVERED IN THE AGREEMENT. YOU WILL NOT DO ANYTHING
THAT IS GOING TO EMBARRASS ME OR TAKE ADVANTAGE OF THE LOOP HOLES.
TECHNICALLY, YOU COULD COME IN WITH A JUNK PREFERRED WITH A 20% DIVIDEND
AND HE DOES NOT EXPECT YOU TO DO THIS KIND OF THING.
JIM GROGAN SAID THAT THIS IS A NEW ERA AND WE WANT TO GET ALONG WITH YOU.
THEY ARE BOT OUT TO GET US AND WILL WORK WITH US. DOCHOW WANTS US TO KNOW
HE IS GOING TO BE MAKING THE IMPORTANT DECISIONS AND BE PERSONALLY INVOLVED
WITH THIS AND IN CHARGE OF THIS FOR THE NEXT SEVEN MONTHS.
DON'T DO THINGS THAT THEY ARE TECHNICALLY ALLOWED WITHOUT GIVING IT A LOT
OF THOUGHT. IN THE END, SEVEN MONTHS FROM NOW WE DON'T HAVE AN
RIGHT TO BE TRANSFERRED. WE MUST GET ALONG WITH THESE GUYS.
EXAMINATION WILL BEGIN IN JUNE AND LAST ABOUT THREE MONTHS. THEY WILL GIVE
US NAMES OF EVERYONE ON THE EXAMINATION TEAM FOR FHLB BEFORE HAND AND
DOCHOW SAID HE WOULD LISTEN TO ANY OBJECTIONS THAT WE MIGHT HAVE TO THE
SUGGESTED PEOPLE.
JIM GROGAN SAID THAT O'CONNALL WILL NOT BE ON THE EXAMINATION TEAM. LOOKING
FORWARD TO RESOLVING AND GETTING US OUT OF IT. SPECIFICALLY DISCUSSED THE
HOTELS AND THEY ARE NOT GOING TO RERAISE THE ISSUE THAT WE SOLD 45% OF THE
HOTELS. THEY ACCEPT THAT. THEY ARE NOT GOING TO REVIEW WOLFSWINKEL,
OR ANY OF THAT STUFF.
DOCHOW TALKED TO CRAWFORD, OR IS PLANNING TO TALK TO HIM. IS GOING TO BE
WITH HIM ON MONDAY, MAY 23. I AM SURE THAT AT THIS POINT DOCHOW WILL
TELL CRAWFORD THAT THE HOTEL SALES ARE RESOLVED.
KEVIN O'CONNALL WAS VERY HOSTILE DURING THE MEETING. HE WANTED TO REMOVE
THE WORD RESOLVE AND PUT BACK ADDRESS IN THE AGREEMENT. O'CONNALL CONTINUED,
THIS MEETING IS TO SHOW THAT THERE WOULD BE ISSUES RAISED IN THE PRIOR
EXAM THAT ARE STILL ISSUES. THAT FACT THAT WE SOLD THE HOTEL IS NOT THE ISSUE.
DOCHOW'S THEME: BEFORE I SIGN THIS I WANT TO KNOW WHAT IS GOING TO BE THE
ATTITUDE OF THE MANAGEMENT OF LINCOLN DURING THIS NEW EXAM; TONY OF THE EXAM;
ATTITUDE TOWARD THE SPECIFICS OF THIS AGREEMENT. WANTED TO HEAR WE ARE
GOING TO TAKE A COOPERATIVE THEME.
DOCHOW CLEARLY FEELS THAT HE HAS PERSONALLY GONE THE EXTRA MILE AND IF WE
SCREW HIM, WE ARE DOING HIM A TERRIBLE DISCERN. SAID HE WAS GOING TO CALL
YOU (CHK) TONIGHT, OR FIRST THING ON MONDAY, MAY 23. DOCHOW HAS TAKEN
TREMENDOUS CRITICISM FOR THE WAY HE HAS HANDLED THIS.
ROSEMARY CONTRADICTED KEVIN AND SAID ISSUES ARE RESOLVED.
DOCHOW TOLD JIM GROGAN AT THE END OF THE MEETING THAT KEVIN O'CONNALL WILL
NOT BE INVOLVED WITH THIS.
THEY CLEARLY HAD IN MIND CHANGING SEVERAL SECTIONS OF THE AGREEMENT AND
WE STOPPED THEM FROM DOING SO.
COMMITTEE TO WRITE BUSINESS PLAN: JUDY WISCHER, JACK ATCHISON, ANDY LIGGET, TIM KRUCKEBERG, MARK SAUTER, BRUCE DICKSON, RON STOLL, RANDY CONTE
FOR THE UPCOMING FHLBB EXAMINATION, I WOULD VERY MUCH APPRECIATE YOUR
COMPLETE INVOLVEMENT IN AND MASTERY OF THE FOLLOWING ITEMS IN ORDER THAT
YOU MIGHT BE THE RESPONSIBLE LIAISON FOR LINCOLN TO THE EXAMINERS
WITH RESPECT TO ALL MATTERS REGARDING THESE LOANS, ETC.
OBVIOUSLY, YOU SHOULD ACCESS ANY AND ALL OTHER ACC, OR LINCOLN PERSONNEL
REQUIRED FOR THESE PURPOSES.
WITH REFERENCE TO THE EXAMINATION, OUR MAY 20, 1988 AGREEMENT WITH THE
FHLBB AND FSLIC CONTAINS THE FOLLOWING LANGUAGE:
1. FSLIC AGREES TO INITIATE AND COMPLETE A NEW EXAMINATION OF
LINCOLN AND SUBMIT A REPORT OF EXAMINATION TO LINCOLN WITHIN
SEVEN (7) MONTHS FROM THE EXECUTION OF THIS MEMORANDUM OF
UNDERSTANDING, UNDER THE DIRECTION OF ORPOS (THE "NEW EXAMINATION").
THIS EXAMINATION WILL BE PERFORMED BY AN EXAMINATION TEAM WITH NO
EXAMINERS FROM THE FHLBANK-S.F. IT WILL BE A REGULAR, PERIODIC
FHLBB EXAMINATION CONDUCTED IN THE ORDINARY COURSE. IT IS THE
INTENTION OF THE PARTIES THAT THE NEW EXAMINATION WILL NOT REHASH
THE FINDINGS IN, OR TRANSACTIONS, PROCEDURES OR EVENTS COVERED BY,
THE 1986 EXAMINATION AND THE NEGOTIATIONS CONCERNING IT BETWEEN
LINCOLN AND ORPOS LEADING TO THIS MEMORANDUM OF UNDERSTANDING;
BUT RATHER WILL FOCUS ON THE CURRENT SITUATION AT LINCOLN AND
CHANGES SINCE THE 1986 EXAMINATION. LINCOLN AGREES TO FULLY
COOPERATE WITH AND FACILITATE THE NEW EXAMINATION.
2. IN THE SPIRIT OF REGULATORY COOPERATION DURING THE NEW
EXAMINATION AND IN AN EFFORT TO PROVIDE THE FSLIC A BETTER
UNDERSTANDING OF LINCOLN'S CURRENT OPERATIONS, ORPOS AGREES TO
DESIGNATE A SENIOR EXAMINER WHO WILL REMAIN AT LINCOLN DURING
THE EXAMINATION TO FACILITATE SUCH COOPERATION AND UNDERSTANDING.
LINCOLN AGREES TO NOTIFY THE EXECUTIVE DIRECTOR OF ORPOS OR HIS
DESIGNEE OF ANY HIGHLY MATERIAL AND CONTROVERSIAL CONTEMPLATED
TRANSACTION OR EVENT, PRIOR TO ITS CONSUMMATION. SUCH NOTIFICATION
SHALL BE IN WRITING UNLESS THE MATTER INVOLVES CONFIDENTIAL OR INSIDE
INFORMATION. THE FAILURE TO OBJECT TO SUCH TRANSACTION OR EVENT SHALL
NOT UNDER ANY CIRCUMSTANCES BE CONSTRUED AS APPROVAL OF IT BY THE
FSLIC OR THE FHLBB. LINCOLN ALSO AGREES TO INFORM THE DESIGNATED
SENIOR EXAMINER OF ANY OTHER SIGNIFICANTLY MATERIAL TRANSACTION
EITHER BEFORE OR WITHIN FIVE BUSINESS DAYS AFTER ITS CONSUMMATION.
3. THE PARTIES WILL MAKE EVERY EFFORT IN GOOD FAITH TO PROMPTLY
RESOLVE ANY ISSUES RAISED IN THE NEW EXAMINATION, AND WILL WORK
TOGETHER TO DISCUSS SUCH ISSUES AT THE EARLIEST PRACTICABLE TIME AND
DEVELOP PROCEDURES TO RESOLVE THEM REASONABLY AND EXPEDITIOUSLY.
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