The ousted director of a proposed city-backed north Minneapolis credit union says her dismissal came after she accused the organization of discriminating against a white employee.

Me'Lea Connelly said in a statement this week to board members that the Association for Black Economic Power (ABEP) fired her after she made a discrimination complaint related to the firing of Joe Riemann, the organization's CFO.

Connelly and Riemann were key players in the proposed Village Financial Cooperative credit union, which could receive up to $500,000 in city funding if it meets agreed-upon benchmarks.

Connelly, who is also in a romantic relationship with Riemann, said the "abrupt and surprising" complaints from staff "were not about this leader's poor performance or behavior" but instead were about his "role being inappropriate" because he's "not Black." Connelly said the board forced her to fire Riemann "without cause."

"In dialogue with the board, I expressed that removing a staff member due to their race is not only illegal but in direct contradiction to what I believed were, our shared values," Connelly said in the statement. "It was and is my belief that, in any efforts we make towards achieving economic equity, we must not replicate the discrimination and abuse we say we are working to overcome."

Connelly confirmed the statement through her attorney but declined further comment.

The statement comes days after ABEP said that Connelly and Riemann had been removed because of mismanagement. Staff of ABEP filed a report Sept. 4 with Minneapolis police, alleging "reported misuse of grant funds" between May 16 and Aug. 13.

The department is still reviewing the report for further investigation, police spokesman John Elder said. Both Connelly and Riemann have denied wrongdoing.

"As a single father of two, I am trying to care for my immediate family needs and maintain my current employment, which has been called into question due to the false accusations being made about me," Riemann said in a text message Friday to the Star Tribune. "This is an extremely traumatic experience and I appreciate privacy at this time."

Multiple people involved with the organization say the turmoil has jeopardized the credit union's ability to open before the end of 2019. It's a key deadline it has to meet if it wants to tap into promised city funding. The Minnesota Department of Commerce, which oversees credit unions in the state, does not currently have an application for consideration for Village Financial, Emma Bauer, the department's communications director, said in an e-mail.

Connelly said that she provided Riemann a severance package — something often done with other employees — but was soon placed on administrative leave. In her statement, Connelly said that board and staffers "began spreading rumors" about her, including allegations of "theft, fraud and mismanagement." She was then terminated.

Riemann said in an interview earlier this week that he and Connelly had been in a relationship for a year and a half and had long disclosed it to board members. In her statement, Connelly said that to "ensure the highest level of integrity and fairness" Riemann reported directly to then-ABEP board treasurer Patrick Troska, who is also the president of the Jay & Rose Phillips Family Foundation of Minnesota.

The foundation gave ABEP a two-year, $430,000 grant to launch Village Financial. In a statement Friday, Troska said "the reports made by Me'Lea Connelly are full of inaccuracies, including the characterization of my role."

"Due to the ongoing legal process, the Foundation will not comment further," Troska said. "We believe it's in the public's best interest to let the process work its way through."

The city pledged $500,000 to help Village Financial open, $410,000 of which is in the form of a forgivable loan, if it met certain benchmarks, including opening a brick-and-mortar location by the end of this year. Mayor Jacob Frey also announced intentions to give the organization another $500,000 in his 2020 budget proposal. That's in addition to $50,000 of city money granted in 2018 and other philanthropic donations.

Frey said this week that he has "no pause" about the organization's mission on black economic empowerment and that "it's a vision that we remain fully supportive of." He said the city wants to be supportive of the leadership transition, but opening the credit union still remains a critical milestone.

"As far as the money goes, not a single dollar from either one of our budgets has gone out at this point," Frey said. "We have a clear, objective criteria that's attached to any monies that are to leave City Hall, and at this point the objective criteria hasn't been met and so the money hasn't been delivered."

ABEP is slated to hold a community forum Oct. 18 about the future of the credit union.

Staff writer Miguel Otárola contributed to this report. Marissa Evans • 612-673-4280

Andy Mannix • 612-673-4036