'Guilty' ex-union officials cut deal

From TradeWinds:

Thomas Kelly and Jerry Joseph have pleaded guilty to felony charges in a US prosecution of a union.

US prosecutors have cut a plea bargain to secure two witnesses in their prosecution of leaders of the American Maritime Officers (AMO) union.

The deal is potentially bad news for the present AMO leadership.

Thomas Kelly and Jerry Joseph, longtime AMO officials who left after losing a 2001 election battle against the current leadership, have each pleaded guilty in the District of South Florida court to single counts of embezzlement of union funds and mail fraud respectively.

In return for a reduced sentence, they will be rquired to testify about other union matters. The two are thought to have been among the first netted when federal investigators of the AMO began in 2000 and had been widely expected to cut a plea deal.

The AMO's president and secretary-treasury, brothers Michael McKay and Robert McKay, have been under indictment since september in the Florida court along with two co-defendants for alleged offences including racketeering, bribery of union funds, election rigging, witness tampering and mail fraud. The AMO leaders pleaded not guilty and expressed confidence at the time that they will be exonerated once the truth is known.

Prosecutors hve asked the Florida court to transfer Kelly's case to the same judge who is trying the McKays.

In 2001, Kelly and Joseph lost a tooth-and-nail election fight to unseat the incumbent McKay brothers.
After losing, both became consultants for a time to the rival Marine Engineers Beneficial Association (Meba).

The AMO has sued both Joseph and Kelly over issues relating to their defection. Last Summer, the AMO won a multi-million-dollar judgement against Joseph. It lost a similar lawsuit against Kelly. Last week, TradeWinds reported on a massive $400m lawsuit by AMO against Meba over the Interlake fleet of Bulkers, which Meba wrested from AMO in 2003 on the Great Lakes, traditionlly AMO turf.

The AMO is the largest union for ship offices in the US, organizing many companies including Maersk Line ltd, Crowley Maritime, Saltchuk Group's Interocean American shipping, Secor's Seabulk, as well as many government-owned ships.

Michael McKay's defence lawyer Neal Sonnett has not responded to an email enquiry about the case.

Meanwhile, recent talk of new or newly revamped criminal charges against AMO leadership has proved incorrect.

The substance was accurate but not new. However, mny of the details had not been reported or circulated.
(see story below).

The AMO has made no statement on the case as TradeWinds went to press.

By Bob Rust, Stamford
Published: 10 February 2006

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Davis 2-06-2006 Memorandum

MEMORANDUM

To: ALL MEMBERS

From: Ron Davis, MEBA President

Date: February 6, 2006

Subject: MEDICAL PLAN CHANGES DISCUSSION

At the October 2005 Trustee meeting significant changes were made to the Medical Plan. The Board of Trustees faced very painful choices as we worked to fulfill our obligation to the participants and ensure the Plan’s future, Each of the twelve Trustees had a different opinion about the recommended changes presented by the Plan’s consultant and which changes to make.



Much discussion took place because of these differences. This discussion followed prior meetings in which the Trustees were not able to reach an agreement on any changes. Without agreement, action at earlier Trustee Meetings was not possible. According to the Medical Consultant’s projections presented at the October meeting, the Medical Plan had reached a critical stage and for the first time the Trustees were told that the Medical Plan could face bankruptcy in just a few short years due to the projected escalating costs of medical despite the fact that the employers are now contributing more than $26 million per year. A compromise among the Trustees was finally reached. None of the Trustees are totally satisfied with the ultimate compromise that was reached and each would have made different choices if they could have acted alone. I can assure you that extensive research, thought and discussion were undertaken before these changes were made. The Union Trustees especially recognize the hardship placed on the retirees and are trying hard to find a better solution that will be agreeable to the Employer Trustees. These changes have created a tremendous hardship on many retirees.

Specifically, raising the non~ Medicare eligible retirees (under age 65 with dependants to $700/month has been particularly devastating for many retirees as this can represent more than 25% of their pension.

At this juncture, and before the Trustee Meetings that will take place later this month, I am asking the membership to assist us and provide feedback on the following:

If the retiree dependant coverage was lowered to $450/month, the medical plan would need to make up that money in some manner. (Approximately $1.6 million per year)

There are numerous ways to accomplish this such as
• Reducing benefits for retirees;
• Reducing benefits for retirees and active members;
• Having a monthly contribution from all active participants of the medical plan;
• Having a monthly contribution from all active participants with dependants of the medical plan;

If active member participants were to subsidize this retiree cost there are several ways to do this such as:

• if we were to charge all active participants of the Medical Plan a percentage of their base salary it would be approximately 1.1 %
• If we were to charge only active participants with dependants in the Medical Plan it would be approximately:
o Single members participating in the MEBA Medical Plan $0
o Active Members with one dependant $60/month
o Active Members with more than one dependant $120/month

We as a Union brotherhood have come to a time of reckoning. A look back in history will remind us that many of today’s Retirees were the ones who chose to give up personal raises as Active Members, agreeing that this money instead go into the Pension Plan. Those of us who follow in their footsteps now reap the benefits of these sacrifices. As you know, the Pension Plan has been fully funded since 1986, and no Employer contributions into the Pension Plan have been required since that time, instead, such, amounts have been channeled into better wages and increased MPB contributions. It is now time to decide if we, the Active membership, are willing to make a small sacrifice and help our MEBA Retirees maintain a level of medical benefits at a more modest cost.

The Union Trustees are evaluating these options and there is no certainty that any additional changes will he made to the Medical Plan at the February Trustee Meeting. Much will depend on the Employer Trustees. I, however, would appreciate any and all feedback from the membership on the above possibilities. Written comments, ideas or suggestions should be sent to Allen Szymczak at the Plans office in Baltimore,

I ask the chairman of the meetings to now open the floor for discussion on this matter and please provide me feedback on the result of these discussions.

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Petty Gloating

In a nice attempt to enjoy some schadenfreude, the MEBA Official website now contains a link to the Second Superseding Indictment Against AMO Officials.

http://161.58.151.173/docs/AMO%20Indictments.pdf

45 pages of joy to read.

How completely un-impressive! How childish! Davis should post the details of the two lawsuits in the Interlake saga that the AMO won as these are more germane and of should be of far greater concern to the Members. But he prefers to keep this information away from Members. No wonder. Members for example, might find out that Messrs. Joseph and Kelly were being paid a lot more than Davis let on.

When Davis came out with his ridiculous report detailing the bogus DEC investigation into the election irregularities of 2004 the report was 30 pages of tripe, but at least Davis did not wish to impose upon the Members to read it and so gave a short summary upon which the Members could vote to turn down a re-run of the election.

But when there's something to gloat about he expects Members to plow though 45 pages of juicy details on the "Bad Guys". So go ahead and read all about it. And please forget that Davis is putting your retirement on the line while you rub your hands together and salivate over the fate that awaits the McKay Brothers in the event they are found guilty.

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MEBA Capitol Hill Clout

In his “I-can’t-believe-how-great-I-am” message in the latest (December 2005-January 2006) issue of the Modus Operandi, Ron Davis seeks to amaze the reader with his tremendous accomplishments for 2005 and looks forward to even greater feats of brilliance in 2006.

But a quick look at Maritime related items in the 2007 budget proposal submitted by the Bush Administration paints an entirely different picture of MEBA influence in Washington DC’s Corridors of Power. Indeed all Maritime related cuts add up to $364 million or 72 percent. A person might very well conclude that MEBA Members and Retirees PAF contributions are more often spent on stuffing Davis Administration officials and cronies faces than significant results from the so-called MEBA Clout on Capitol Hill.

Maritime Administration	cut $151 million	or 51%
St Lawrence Seaway Dev. Corp	cut 8 million	or 50%
Maritime Guaranteed Loans (Title XI)	cut $205 million	or 100%

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