Certain unsettling facts about Greylock Federal Credit Union CEO Angelo Stracuzzi’s past have rocked Berkshire County, leading to his resignation and raising questions about how much the credit union knew about his past – and about how financial institutions handle unsavory situations regarding their executives.

Stracuzzi, who was CEO of Greylock since 2003 and a prominent citizen in the Pittsfield area, was convicted of assault and criminal mischief in 2005 following an incident involving a minor in Biddeford, Maine.

In a statement, Greylock’s board of directors said they learned about the conviction in late May, before it was made public last week. Credit union Senior Vice President John Bissell declined to speak on the matter. He deferred instead to a two-paragraph statement issued by the board on June 4, which announced Stracuzzi and board member Clifford Nilan’s resignations as directors, and an investigation into the matter and its “potential conflicts of interest.”

Nilan also serves as Berkshire County’s chief of probation – and may have been in charge of Stracuzzi’s probation after his conviction. Coria Holland, spokeswoman for the Massachusetts Probation Department, confirmed that the situation was under investigation by the state agency.

Stracuzzi has since resigned his position as CEO, as well as his previously announced resignation from the board.

Relatively Safe

Most institutions thoroughly investigate executive candidates’ backgrounds before offering employment. But Stracuzzi’s arrest took place in 2004, after he’d already taken the CEO position. In cases like these, the plan of action isn’t always obvious for the boards in charge, according to sources familiar with executive hiring practices.

Contracts tend to favor the executive and make it hard for him or her to be forcibly relieved of duties, said Neal J. Curtin, co-head of the financial and regulatory group at Boston law firm Bingham McCutchen.

“I wouldn’t be shocked that the contract would protect him,” Curtin said.

The CEO serves at the discretion of the board of directors, which usually exhaustively investigates candidates before they’re hired as executives. Contracts are often short-term – a period of maybe three years or so – so the board can choose not to renew a contract if they’re not pleased with an executive’s performance.

But in general, for the duration of the contract, the executive is relatively safe from dismissal for all but the most egregious offenses.

“I’m not sure that simple assault would necessarily be covered,” Curtin said, noting that Stracuzzi’s violation was also not directly related to the financial health of the institution, as would be the case if, say, he were stealing from the credit union.

Although Stracuzzi was convicted of one count of assault and criminal mischief, he was allegedly arrested for patronizing prostitution of a minor, at least according to Conor Berry, a reporter at the Berkshire Eagle newspaper who has been following the case.

Berry said the Biddeford police confirmed to him that Stracuzzi was allegedly involved in two reported incidents on July 26 and 27 of 2004, in addition to the other charges. Calls by Banker & Tradesman to the Biddeford Police Department for independent confirmation went unreturned.

Household Names

Stracuzzi and Greylock both loom large in Berkshire County. With $1.1 billion in assets, Greylock is one of the largest credit unions in the state, and a major financial institution in Western Massachusetts. According to data from Banker & Tradesman’s parent company The Warren Group, Greylock holds nearly one-third of the mortgage market in the county. Stracuzzi himself served as president of the Pittsfield City Council.

“For us, these are household names in the Berkshires,” Berry said. “Stracuzzi, you know, he’s a personality.”

Berry has also gotten little information out of Greylock personnel or board members, saying no one has discussed how much the board knew about Stracuzzi’s trouble in Maine.

But in a place like Pittsfield, a blue-collar town with about 46,000 residents, the board members are pillars of the community who have longstanding ties to each other, both personally and professionally.

“Probably every other person on the board of directors knew about it,” Berry said. “These people are thick as thieves.”