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Chamber may have been ‘caught in a cross-fire’

By Thomas Gnau; Journal Business Writer; E-mail:

Stan Chesley’s appearance at a Mid-Miami Valley Chamber of Commerce luncheon was an entertaining one.

The Cincinnati-based class-action attorney — one of the tri-state’s most prominent lawyers and perhaps best known for shepherding lawsuits from the 1977 Beverly Hills Supper Club fire, which took 165 lives — wove a tale of battling corporate wrongdoing with “smoking-gun” documents.

About 50 chamber listeners at Forest Hills Country Club enjoyed the talk on April 3, recalled Fred Sennet, a former part-time chamber employee and former Middletown City councilman who was in the audience that afternoon.

“They thought it was fun,” Sennet said of his fellow listeners. “He (Chesley) was funny.”

Though Chesley has litigated against the chamber’s largest member and Middletown’s largest employer, AK Steel Corp., representing the families of two workers who died at AK’s Middletown Works in 1994, he did not mention AK in that day’s talk.

Perhaps for that reason, former chamber President David Daugherty was relieved immediately after Chesley’s address.

“David said he thought things went fine,” Sennet said.

For Daugherty, matters quickly became anything but.

AK Vice President of Public Affairs Alan McCoy invited board members to AK’s corporate headquarters on Curtis Street hours after Chesley’s address to tell them his company was leaving the chamber, said Leonard Robinson, chamber board member.

In the following three weeks, Daugherty and Dan Sack, former chairman of the chamber’s board of directors, would resign their positions. Sack remains a board member, but he is no longer chairman. Former Armco and chamber executive Richard Slagle was quickly named interim chairman and president.

Certified public accountant Nancy Gross also resigned in April, as chamber treasurer. Gross declined to say why, but she said her reasons were outlined in her resignation letter, which she would not share.

Today, the chamber finds itself looking not just for a new president, but for the renewed support of the area’s biggest employer.

AK has more than 4,000 employees at Middletown Works and its corporate offices. Nationally, the steelmaker has more than 10,000 employees.

Tom Blake, a Mid-Miami Valley officer responsible for business development, is concerned this episode may make it difficult to find someone willing to assume the chamber presidency.

“They are going to question how the last director” left, Blake said of potential candidates.

“Has this cast too big of a shadow or is this something that will be beneficial in the future?” Blake asked. “Who knows?”

Allie Williams, a U.S. Chamber of Commerce director of membership who oversees relations with 2,800 state, metro and local chambers, said he has heard similar stories.

“It’s happened before,” Williams said. “It will happen again.” He declined to name specific similar instances, however.

“Is it less appetizing to hire someone into an area with stories like that?” Williams said. “Probably.”

But that doesn’t mean willing, capable paid executives can’t be found to lead the chamber anew, Williams added. There are “lots of troubleshooters” searching for leadership opportunities, he said.

“It wouldn’t scare me off,” Williams said.

Robinson said he believes Slagle — who agreed in late April to help lead the chamber for 60 to 120 days — is aware of Blake’s concern.

“Slagle is working so that whoever is going to be president of the chamber will have smooth sailing,” Robinson said.

Daugherty senses trouble

In early April, shortly before Chesley’s speech, Daugherty sensed there might be trouble. He checked with AK before Chesley’s appearance and hosted Chesley under the impression that leaders of AK had no objection, several sources told The Journal.

A committee chooses speakers for the chamber’s monthly business luncheons at Forest Hills Country Club. At one point, Daugherty even shared his reservations about Chesley’s invitation with that committee, one source close to the chamber said on condition of not being named.

Daugherty checked with McCoy at least a week before Chesley took the podium, that source said.

“I think Alan probably was consulted twice,” he said.

Another source, who also declined to speak for attribution, said Daugherty “swears” he spoke with an AK representative before Chesley’s appearance.

“There’s no reason in the world to believe that Dave is lying,” that source said. He said Daugherty believed that AK officials “had no objections.”

Chesley said Daugherty called him on April 2, asking him not to mention AK in his address.

“I said, ‘Good news. I have no intention of mentioning AK,’ ” Chesley said.

Chesley said the apparent fallout from his chamber appearance has been the “craziest thing I’ve heard of in my whole life.”

“I’m sort of mesmerized by this kind of heavy-handedness,” Chesley said.

Robinson said that on the afternoon of Chesley’s appearance, McCoy invited board members to a conference room at AK’s headquarters. He told them his company was leaving the chamber.

Robinson declined to describe that meeting or recount what was said, but he said between 10 and 16 board members were on hand to listen. Other sources also declined to give details of that meeting.

McCoy told The Journal the next day that while AK might one day return to chamber membership, for the time being, the organization simply “was not serving our needs.”

Past AK grievances possible

As chamber president, Daugherty has shown concern to meet the expectations of AK’s leaders, but he may have displeased them in the past.

“I think they (AK) probably had several grievances,” one source told The Journal, recalling, as one instance, Middletown Regional Hospital’s search for a new home.

Last July, the chamber board urged the hospital not to rebuild in Monroe, a move that would pull its 1,700 employees from Middletown. Daugherty later acknowledged before members of the Monroe Business Council that AK officials had contacted the chamber on the issue.

Then, at an AK Labor Day community party, AK Chairman and Chief Executive Richard Wardrop publicly urged Middletown Regional Hospital not to leave Middletown. Wardrop’s was one of a chorus of local voices at the time urging hospital leaders to stay; the chamber board joined that chorus, releasing a statement asking the hospital not to leave Middletown.

One of The Journal’s sources said that in that instance, Daugherty had displeased leaders of the hospital, Middletown’s second-largest employer.

“David was left as a man without a country, caught in a cross-fire,” after Chesley’s appearance, and AK’s evident displeasure, the source said.

Middletown Regional Vice President and Chief Marketing Officer Larry James declined comment for this story.

Indeed, everyone outside AK approached by The Journal to shed light on whether AK had any role in the chamber shakeup declined to say anything as named sources for this story. Two people would speak but not for attribution.

Mid-Miami Valley board member Richard Nunlist declined to say whether he or fellow board members at any point expressed concern about the way Daugherty was performing his job.

But, Nunlist added, “You can’t please 600 people (chamber members) all the time. It’s not humanly possible.”

“You can’t,” agreed the U.S. chamber’s Williams. “It’s very difficult to keep 50 members happy.”

Slagle — who left Armco, one of AK’s corporate predecessors, as vice president-administrative services in 1985 — agreed in late April to help lead the chamber for two to four months.

Slagle would not share any resignation letters — which are not public documents — including the letter from Nancy Gross, with The Journal.

“I don’t want to look at them myself,” was all Slagle would say on the matter.

Sack shared his letter, which was a brief three paragraphs.

“For the good of the community and the continued progress of the chamber, I think it is important that I step down at this time,” Sack wrote April 25.

Weeks into his interim leadership role, Slagle has said an AK representative will be welcome to serve on a committee searching for a new president, although AK is no longer a chamber member.

“By the time we get to a search committee, I think AK might well be a member. I don’t know,” Slagle said last month.

He said last week that a search committee will be formed soon, after a job description for the president’s position is drafted.

Slagle said there have been no program changes since AK left the chamber. Monthly business and Women In Networking luncheons continue, he said, as do monthly Business After Hours gatherings.

And Slagle said he has not seen an inordinate number of members resigning from the chamber since AK left. He said “several” members have left, but he declined to identify them or say how many.

“There’s been no major fallout as a result of anything,” Slagle said.

Chesley’s selection; the future

Chesley was invited to speak by a speaker selection committee, Slagle confirmed. He said he wasn’t familiar with that process and declined to say anything about it.

Said Slagle, “I’m interested in the future.”

Since his resignation, Daugherty has been circumspect. He declined to say anything about the circumstances behind his resignation or Chesley’s invitation, declining even to talk in general about how speakers were selected.

“Right now, I’m just relaxing for the first time in my life,” Daugherty said last month.

Asked if he contacted AK before Chesley’s appearance, Daugherty said, “I’d have to say ‘no comment,’ I really would.”

McCoy also declined to say whether anyone at AK was contacted. And Sack has steadfastly declined to address the issue.

Daugherty said he wants to stay in the Middletown area and has been exploring possible career paths. “The nice thing is, I’ve got some time to think about it,” he said.

Meanwhile, members of Mid-Miami Valley and other area chambers have watched the events closely.

Joseph Hinson, executive director of the Southeastern Butler County Chamber of Commerce in West Chester, said he has long learned to expect the unexpected in chamber business.

“Anything can happen,” he said. But the Mid-Miami Valley shakeup wasn’t something he saw coming.

“Yeah, it was a surprise, knowing he (Daugherty) has been a chamber director as long as he has,” Hinson said.

A former executive with the Youngstown-Warren Regional Chamber of Commerce, Daugherty, then 47, took the Mid-Miami Valley chamber presidency in August 1996, in the organization’s second year, when it had 480 members. Today, the chamber has about 580 members.

As a chamber officer in a speedily growing area, Hinson disagrees that larger chamber members necessarily require special attention or deference. “They have different needs, not larger needs,” he said.

Butler County Commissioner Mike Fox called the matter a “Middletown chamber issue, not a county issue.”

But Fox was not surprised that chamber leaders scrambled to try to repair their relationship with AK. Days after AK’s resignation, Sack announced the formation of committee to explore all facets of chamber operations, with an eye to somehow drawing AK back.

“If they (AK) are unhappy, then there are going to be people that suffer,” Fox said.

Painful as they may be for some, the changes at Mid-Miami Valley’s helm made some sense to at least one observer.

“There’s a point in time when you’re not performing, you’re not going to have your job anymore,” said Edward Dwyer, an executive with US Bank and member of the Butler County Chamber Caucus. “That’s just a fact in any business.”

Jay Stewart, Monroe’s newly named finance director and an ex-officio chamber board member, praised Daugherty’s efforts to represent all three member cities in dealings with the entire county and region beyond.

But Stewart declined to comment when asked if he thought Daugherty treated Monroe fairly in intra-chamber issues.

Even in what may be a moment of temporary disarray for the chamber, Stewart said he believes it is too soon for Monroe businesses to create their own chamber, an idea raised after chamber directors urged Middletown Regional to choose Middletown over Monroe as a future home.

“Right now, there are not enough businesses to support a Monroe-only chamber,” Stewart said. “We’re not there yet.”



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