In a rare apparent rupture among Vancouver’s socially conscious green capitalists, a former senior vice-president of Canada’s largest credit union is suing over its failure to invest $10-million in his social venture fund.
The arrival nearly three years ago of David Berge – a self-described “leader in the field of socially responsible investing in North America” – was noted approvingly behind the scenes by the city’s ruling civic party, Vision Vancouver. Mr. Berge, a Vermont resident who started one of the first American social-venture funds and invested early in Ben & Jerry’s ice cream, also came with strong links to prominent philanthropist Joel Solomon and charity Tides Canada Foundation.
Now, Mr. Berge has been terminated by Vancouver City Savings Credit Union, or Vancity, and is suing. He isn’t seeking a severance payment after he was fired without cause in January; he has already received the nearly $400,000 that had been stipulated in his employment contract.
Instead, he’s suing to get Vancity to stick to the commitment he says the credit union made when it hired him: a $10-million investment in his Underdog Ventures Sustainable Communities Fund.
“Vancity, and Tamara in particular, made promises to get me here and now I have to protect the interest of those investors [in that fund],” said Mr. Berge in a lengthy interview about the lawsuit.
Mr. Berge said Vancity CEO Tamara Vrooman first approached him in 2008 about taking on the job of managing the credit union’s investments in social enterprises.
He was eventually hired in January, 2010, after Vancity agreed to buy a 38-per-cent interest in his long-time fund, Underdog Ventures. He says Vancity also agreed to invest later in a second venture-capital fund he would set up with the credit union, also called Underdog.
Mr. Berge’s statement of claim says his performance review indicated he had “exceeded expectations” in 2010 and that Ms. Vrooman kept giving him positive feedback throughout 2011.
But in November, 2011, the company’s attitude toward him changed and he was sent a letter that accused him of improper transactions. That included questions about a transfer of some of his shares in his first Underdog fund to the Tides Canada Foundation in return for a $250,000 tax receipt.
After several exchanges of information, Vancity dropped those issues and then terminated him without cause in January, 2012.
Vancity has not yet filed its statement of defence, but has provided a statement to The Globe and Mail. Mr. Berge was terminated because of “difficulties which arose in 2011,” it says.
“Vancity has not proceeded with the transaction submitted by Underdog because, in Vancity’s view, it is inconsistent with the contractual arrangements between Vancity and Underdog and may not comply with British Columbia and United States securities laws.”
Mr. Berge was connected in multiple ways to Mr. Solomon, the philanthropist who is the driving force behind Vancouver’s social-enterprise investing and one of Vision Mayor Gregor Robertson’s key supporters. Mr. Solomon was an investor in Mr. Berge’s first social-venture fund, Underdog Ventures. And Mr. Solomon’s fund supported some of the same groups as Mr. Berge did at Vancity, like Atira and SPUD. Mr. Berge’s Underdog was an investor in Mr. Solomon’s Renewal Partners fund.
David Levi, who runs B.C.’s Working Opportunities Fund, said he has been an adviser to Mr. Berge’s first Underdog fund for more than 10 years and is a personal investor in his new fund with Vancity. He described Mr. Berge as “one of the founders of the social-venture movement.”