Board voted to suspend executive committee after CEO’s resignation
As mentioned in last week’s Advance News Journal, McAllen Chamber’s longtime CEO Steve Ahlenius tendered his verbal resignation Oct. 19, reading from a prepared statement, and the board accepted it. The Advance has placed a Public Information Request with the chamber for the recording of that board meeting because according to several sources willing to speak on the condition of anonymity, it became more than a little heated after Ahlenius resigned out of the blue. How many board members, if any, perhaps knew the news was coming isn’t known.
Ahlenius’s sudden resignation took the board by surprise, and after reading from his prepared statement, he said he wouldn’t be fielding questions because he had already been in contact with an attorney.
At the start of that relatively peaceful Oct. 19 board meeting, the chamber’s new chairwoman, Annette Franz, laid out committee assignments, which is standard procedure whenever a new chair is seated and a new fiscal year begins. One of those committees was named: CEO Evaluation and Compensation Committee.
Asked to comment about her reason for wanting to know about the status of CEO job evaluations and compensation, per bylaws, Annette Franz said this week that she just couldn’t comment about any chamber matters as it relates to Ahlenius’s resignation.
As this story unfolds, the question now becomes, during the course of Ahlenius’s approximate 24-year tenure with the McAllen Chamber, how many times did each respective executive board (five top board members) evaluate his job performance, per chamber policy?
The 5-Star award
In a recent award (the 5-Star Accreditation Status) presented to the McAllen Chamber of Commerce by the U.S. Chamber of Commerce this past September, part of that application included a line item – something to the effect – has your CEO been recently evaluated. According to several sources, that box was marked “yes.”
That award (McAllen also won it in 2014) was submitted in 2019, but was delayed by the COVID bottleneck.
In addition to the job evaluations, another question that may arise from all of this, is: how many salary increases was Steve Ahlenius awarded during his long tenure, and did the entire board always vote to approve them? Again, per chamber bylaws, the CEO’s salary is fixed by the entire board.
More intrigue
More intrigue — over the years, how many board members were paid by the chamber, a nonprofit, to do work or perform work as part of their personal businesses for personal gain, and was that approved by the entire board if the work amounted to more than $500, per the bylaws?
According to the published McAllen Chamber of Commerce Board of Directors Code of Conduct, board members can do business with the chamber without board approval if the value amount does not exceed $500 a year.
If the work or purchase order is worth more than $500, it must be part of a competitive sealed bid process after the job has been publicized, and the respective board member seeking work with the chamber may take no part in board action awarding the work or approving the bid (recusal).
If either of those scenarios come into play, according to the chamber’s Code of Conduct, the CEO (president) shall notify the board of directors of the board member’s possible participation in the paid work.
Now that people are starting to ask questions, that has become one of the questions posed — was this McAllen Chamber process always followed when board members did business with the chamber, upholding the board’s nonprofit fiduciary duties?
McAllen Mayor intervenes
On Nov. 9, McAllen Mayor Javier Villalobos invited the chamber board to meet with him and city staff at city hall to see if some peaceful resolution couldn’t be reached, since past board members and chairmen (women) were writing letters in support of Ahlenius and the work he had done, and they were sending them out to members of the public, trying to rally support for the CEO, Steve Ahlenius, who had just resigned (Oct. 19). Some people writing those letters wanted Ahlenius to return to work.
Word was already was getting around — chamber business and personalities were starting to clash.
Some in the public eye, including seven past board chairs, wanted Villalobos to somehow intervene, move in, and reorganize the chamber’s board. Hopefully kick Franz out as board chair (even though she was never mentioned by name), reorganize the board, and do something that would return things to the McAllen Chamber’s status quo.
“Not only were more people starting to talk,” said Mayor Villalobos, “but the chamber and by extension, the city, was starting to get negative publicity. That’s never a good thing in a growing environment.”
The chamber is a separate stand-alone nonprofit, but the city of McAllen contributes money (from the city’s hotel/motel tax) to the chamber annually (in excess of $1 million) for operational costs. Making the city, in effect, a stakeholder in chamber affairs.
“So I reached out to the chamber board to meet at city hall,” said Villalobos. “We were also getting pressured to somehow get Ahlenius to come back as the CEO, which as city mayor, how am I going to do that, not to mention that it’s not the job of any McAllen mayor to get directly involved in chamber business.”
Once the city/chamber meeting had convened at city hall Nov. 9, Villalobos said he told those in attendance that he was hopeful that they could take a step back and just get back to the chamber work at hand. Let bygones be bygones. Mend fences.
“I was trying to say that working together is better than working apart,” said Villalobos this Monday.
“I thought the meeting went well. It was only after I left that I heard that the meeting heated up.”
Executive Committee suspended
Indeed, things heated up after Villalobos’s departure, according to a source who was in attendance.
This needs further validation, which should be forthcoming once The Advance receives a copy of the board minutes, but a motion was made and seconded to suspend the executive board for this fiscal year, which would end when Annette Franz is no longer board chairwoman.
The vote approved the suspension of the executive board, but reportedly, the vote wasn’t approved by a two-thirds board majority, per bylaws, which is needed for the removal of “any director.”
According to several sources who attended that meeting, when the two-thirds question was raised, McAllen’s city attorney said the chamber board had the authority to enforce the vote even though the two-thirds vote of all directors had not been met.
That issue, however, probably hasn’t gone away for good. The next chamber board meeting is scheduled for next month (January).
The executive committee, by the way, is comprised, per bylaws, of the “Chairman of the Board, the Past-Chairman, the Chairman-Elect, Vice-Chairman of the board, treasurer, and the President (CEO).”
Transparency and a lawsuit?
What will prove interesting now is what line the chamber will take with public information requests? Nonprofits typically are not subject to the Texas Public Information Act; but in this case, since the city of McAllen supports it financially with tax dollars (hotel/motel), does that not make the entity subject to public disclosure?
Plus, for years the McAllen Chamber, under Ahlenius’s long approximate 24-year tenure, has repeatedly boasted of how “transparent” the chamber is. In fact, that’s one of the metrics reportedly included in the chamber’s application for the 5-Star Accreditation Status from the U.S. Chamber of Commerce.
If that’s the case, producing the many documents requested via a PIR should not be a problem, one would presume.
In a story published Nov. 2 in the Rio Grande Guardian, which broke the story about past chairmen rallying around Ahlenius, there contains this puzzling bit of info:
“The Rio Grande Guardian also understands that the board of directors has been told the chamber could face legal exposure over Ahlenius’ departure. Accepting a senior executive’s resignation so quickly could, in the eyes of the law, be deemed the equivalent to terminating that person from an organization, the board was told.”
By whom?
During that same Nov. 9 meeting at city hall, the chamber’s board of directors voted to name Blanca Cardenas as interim CEO and pay Ahlenius two weeks severance following his resignation.
It’s yet to be confirmed, but reportedly, Ahlenius was making in the neighborhood of $150,000 at the time of his voluntary resignation. Two weeks’ severance would be worth approximately $5,800.