The foundation of all democratic institutions is free and fair elections.
This is especially critical in cooperatives where the owners’ collective interest, net equity, is held in common. And where each person’s participation is the same one person one vote.
Today, member voting inSAFE’s proposal to turn over their entire $4.5 billion in cooperative assets and 245,000 member-owner relationships ends.
Within 24 hours SAFE’s leaders will announce that this 85 year old institution will cease to exist. They may or may not disclose the actual vote.
Because member voting was far below the majority participation required under the state’s legal threshold, SAFE will then ask the Director to override this requirement and approve the election as final.
SAFE’s leaders have not held a “free and fair election” in decades as the annual board vacancies are filled with board nominations just equal to the number of open positions.
This is the first actual election SAFE members have been asked to participate in decades.
Here is the context. The reader can decide whether this process fulfills the democratic test of free and fair elections.
A Fair Process?
This election season, one way of trying to top your opponent is posing a trick question. However answered, the candidate will lose political support from one group or another.
Why SAFE’s Merger Ballot is a Trick Question
Voting Yes
If members vote yes, their 85-year-old, $4.5 billion independent, high performing credit union is turned over lock, stock, and barrel to the leadership of another organization. A credit union for which they had no role in selecting, and received no information about the new leadership, its business plans or what they will do with SAFE’s assets.
Voting No
If members vote no, they are stuck with leaders who gave up on their credit union’s future. SAFE’s leaders spent over a year in secret negotiations to hand over 245,000 member-owners to another credit union in return for the right payoff for themselves.
The five senior managers who carried out this secret action received a $50,000 bonus in 2025 for this giveaway. If consummated, the five will gain almost $15 million additional bonus compensation. The Chair and one board member will become BECU directors at an initial annual salary of $125,000 versus no compensation now.
The Results of Trick Votes
The vote is a no-win outcome for members. If yes, they lose their credit union. If no, their self-dealing leadership remains in place.
The result: the vast majority of members don’t vote. They sense there is no upside with either outcome.
SAFE will assert this is just voter apathy. For they know that in typical merger voting, over 99% of votes are by ballot–mail or digital. Because the Member Notice with the ballot includes only management’s reasons for the merger, the overwhelming majority of members will just check the yes box. Not only was there zero information about their new masters , there were no contrary views presented.
Circumventing California’s Regulatory Guardrails
BECU and SAFE have over $35 billion in combined resources. They could have mounted an informative public campaign to win over member owners and the community to this new entity. It would show a commitment to get out the vote and fulfill the state’s requirement that a majority of members vote in a merger.
But no. A public, all channel campaign would alert everyone in the community to this nonsensical transaction. Events must be low key. The total vote will be de minimus compared with the 50% participation required. SAFE will blame member apathy. In fact, SAFE’s board has failed to hold a contested annual board election as far back as can be recalled. Why bother to vote now when this democratic process has been dormant for decades?
SAFE’s leaders believe they hold all the cards. They will request an exemption, as announced in the Notice, for the Director to override this critical legal democratic member guardrail.
Stopping A Race to the Bottom
Democratic organizations depend on the moral and personal integrity of their leaders. On October 22, SAFE’s CEO sent members an email with a belated disclosure. SAFE’s Chair and one other recent board member are the two receiving the $125,000 salaried director positions at BECU if the merger goes through.
CEO Nabhani said these appointments “will help ensure the Sacramento region has a strong voice in the combined credit union. . . Together, they will represent SAFE members and advocate for the Sacramento region as part of the combined organization.”
Does the CEO think the member-owners are dumb? The three persons in this last minute email revelation are receiving more than $4.5 million for handing over 245,000 member relationships and their $4.5 billion financial institution for free to strangers. But now these three want members to believe they will represent and advocate for them? Hypocrisy knows no limits.
Angels Where Fools Fear to Tread
The primary voices challenging this merger travesty are two long time SAFE members, Jeanine Morse and Scott Rose. They have posted on NCUA’s website, written the California regulators, published analysis in social media and met with President Nabhani to present the downside for members and a better future strategy for SAFE.
Their principled, public effort is an example of political and personal courage.
This Halloween week they have shown again and again that giving 7 members over $15 million in merger treats while the remaining 245,000 members are tricked, is a witches brew.
These two members’ tireless advocacy for the common good and members’ best interests should be a beacon of hope. For others are also deeply concerned about the increasing examples of cooperative exploitation via mergers.
Could SAFE’s example be a tipping point in ending this systemic exploitation of member trust and cooperative values? And restore real democratic oversight?