Members of the ILWU remember the secret McWilliams/Miniace meetings of 1997
This is a report on the Longshore President’s Meeting, held March 24, 1998 at the ILWU Headquarters in San Francisco, California. This meeting was called by the Coast Committee, Ray Ortiz Jr. , Bob McEllrath, and VP Jim Spinosa, independently of Brian McWilliams, who was in attendance to explain and defend his personal position regarding events as he perceived them.
Concern among the Coast Committee Members about the content of a “Letter of Understanding” which had been signed by the ILWU’s McWilliams and PMA’s Miniace which prompted an investigation and, ultimately, the calling of the President’s Meeting.
This letter was signed on July 21, 1997, after the election of the present Coast Committee, but before they took office. Their immediate concern was that they had never been informed of any “Letter of Understanding”, which would effect the Pension Plan Benefits. This letter’s existence was discovered by accident, when a memo on PMA’s letterhead made mention of a change in the employer Pension Benefit payments.
The Coast Committee immediately contacted McWilliams in Las Vegas, to discover what was contained in the “Letter of Understanding”. McWilliams explained that it was a simple matter of “administrative housekeeping”, and nothing for them to worry about. It was only upon their continued probing that he admitted that he did not have a copy of the documentation which they were demanding he produce. They informed him of their wish to review it for themselves to decide what was contained in the letter. McWilliams finally told the Coast Committee to go to the PMA if they desired more information or to get a copy of the document.
The PMA gave the Coast Committee a copy of the “Letter of Understanding” but refused to produce supporting documentation as to why such an agreement was necessary. With no knowledge of what McWilliams had committed the Union to in his “Letter of Understanding”, there was great concern among the Coast Committee members. Because of time constraints there were only 5 days until the PBGC approval would become legally binding. Therefore the Coast Committee decided to stop its adoption. until more information was forthcoming.
In their efforts, the Coast Committee went to the
1st - Benefits Plan Office seeking a copy of the “Letter of Understanding”, only to discover the Plan had no record or evidence of its existence.
2nd - They then went to the Executive Director of the ILWU / PMA Benefit Plan, who had no knowledge of it.
3rd - There had also been no input by the Benefits Plans Office.
4th - Next they went to the Plan’s Actuary (The Segal Company ) and they also had not been approached about this issue.
5th - They also went to the Union’s Legal Counsel and were told by that firm that they had no input in making the document and that they had not reviewed any such document for approval. Finally, it was discovered that no one with the ILWU, had anything to do with the preparation of this document and, in fact, no one had even seen it.
When the unraveling process continued, it was discovered that an outside actuarial firm located in New Jersey, Actuarial Science Association, inc. (ASA), prepared and submitted the entire document to the Pension Benefit Guarantee Corporation (PBGC) without review by anyone in the ILWU.
The PBGC is a Federal Agency that acts as an insurance oversight board which was developed to protect pension plans from being abandoned by the contributing employers. This agency helps prevent loss of future contributions which keep pension plans fully funded. Once a joint request is made and accepted by the PBGC, that Employer is relieved of any liability for contributing to that pension fund. If an individual employer leaves the group of employers they are no longer liable for any shortfall which could occur alter their leaving.
By extensive questioning of the PBGC, the Coast Committee was soon able to ascertain that McWilliams had signed two jointly agreed-to letters:
1st-“Letter of Understanding”, and another called.
2nd “ The 26th Amendment to the ILWU-PMA Pension Agreement”. Both of these documents became part of a larger series of documents prepared by the New Jersey based actuarial company. They had no previous connection with the ILWU and the only input for preparing these documents came from the PMA. The final approval by the PBGC would be made on March 20, 1998 and any objections had to have been received prior to that date.
The New Jersey based firm submitted this series of documents required by the PBGC on July 17, 1997, well into the new Coast Committee’s term of office. Yet even at this late date, the Coast Committee had not been made aware of any obligation entered into between the ILWU-PMA concerning changes in pension benefit payments.
Without a clear understanding of how these documents were related to our Pension Agreement, the Coast Committee was not willing to allow them to be formalized. It would take a full and complete evaluation of all aspects contained in these documents, and how they would impact the Union, before they would enter into any agreement that would compromise Pensions. For that reason, they finally wrote the PBGC, stopping finalization of that joint agreement. They did not feel at liberty to accept any aspect of its contents until they better understood how these documents would impact the pension benefits.
Immediately alter the Coast Committee trying to stopped the proposed PBGC approval. PMA attorneys individually contacted Spinosa, McEllrath, and Ortiz with threats that they would, “financially” and “politically destroy” them, if they did not withdraw their objections to the impending governmental acceptance of the joint application.
McWilliams, at first prompted, and then urged, the Coast Committee to accept on blind faith that nothing in these documents would harm the Union and then demanded that they withdraw their objections. With all of the above going on, the Coast Committee felt the ranks should be informed and they immediately called a longshore presidents meeting Before the meeting started, McWilliams handed out a “statement of remarks” which defended his position. This same paper was sent to the every local on the coast before that Presidents meeting.
Our Coast Committee, felt that any commitment to those documents would be premature. At least until they had been properly evaluated by the
1st - Benefit Plans office,
2nd - the executive director of the ILWU-PMA Benefit Plan,
3rd - the Plan’s actuary,
4th - and the ILWU legal counsel,
5th - but, above all else, only when the rank and file membership could be consulted (Presidents Meeting).
During the presidents meeting, there was much discussion surrounding pension funding, but nothing on the merit of the documents themselves was mentioned. The meaning of those documents was left for the entire Coast Committee to decide. They needed to develop a broader perspective on how it would impact pension funding, and discover just why the PMA was so adamant in pursuing PBGC approval. Then, and only then, could the Coast Committee give an educated synopsis of it’s content, and how it would affect the membership of the ILWU.
Finally, comments by those present centered on full cooperation between all members of the Coast Committee, and focused primarily on the way communication would take place. There also seemed to be a consensus among the locals’ presidents that everyone on the Coast Committee needed to work together as a unit. With that suggestion, and an understanding that a majority opinion would be required to resolve this crucial situation, the meeting was adjourned.
Despite the final resolve of those Presidents at the meeting that, “the Coast Committee needed to work together as a unit”. Instead the PBGC states in its final report, “a Plan fiduciary submitted information (to the PBGC) in support of the position that PMA had the previous Board of Trustees’ authorization to proceed with the submission of the request. …. Consequently, PBGC disagrees with the comment and believes that the request was properly submitted for approval by a duly authorized representative of the Plan sponsor. ”
Summary:
1. McWilliams was the only current official in the ILWU that knew about the PBGC joint request.
2. The PBGC request was made by a New Jersey based firm not connected to the ILWU.
3. The PBGC request was never reviewed by anyone in the offices of the ILWU.
4. The PBGC approval is required before relief of an employers future Pension liability.
5. The PMA’s Legal Council threatened ILWU officers Spinosa, Ortiz, and McEllrath.
6. The ILWU is a rank and file union, and should be kept informed by its elected officials on all matters and never conduct business secretly with outside entities.
7. Someone, “a Plan fiduciary”, (Brian McWilliams since the other fiduciaries where complainants) contacted the PBGC after the President’s Meeting.
8. McWilliams made no effort to meet “as a Coast Committee”, as agreed to in the President’s Meeting this non communication has been a matter of concern for several Caucuses.
9. PBGC is set up for “Plan Withdrawal Liability”, that means getting rid of Longshoremen, which can now happen because PMA got rid of the liability.
*Joe Miniace, in a speech before the California Truckers Association Conference is quoted,“If we ”greenfielded“ the industry and replaced the ILWU with the Teamsters, we would save $600 million a year in wages, benefits, and fees alone. If you also factored in potential efficiency improvements you are talking about $1 billion per year”. (The term “greenfielding” means to open new facilities and to hire a new work force).
This is part of PMA’s strategy in the future and for 1999, McWilliams played right into their hands, and took the union with him except he kept it secret form the rank-and-file.
PMA is setting the stage to get rid of the expensive Longshoremen……(US)…. and it will not be long from now.
Respectfully submitted
Dallas DeLay Retired ILWU Local 19 Seattle
