WASHINGTON -- Baltimore-area union dissidents -- warning that a $1 billion pension fund may be in jeopardy -- are leading a rank-and file revolt against leaders of one of the nation's largest maritime unions.
The dissidents charge that District One Marine Engineers BeneficialAssociation officials pilfered millions from union coffers after the union's 1988 merger with the National Maritime Union. And they allege that union officials in Washington are plotting a sellout of the Baltimore-based pension fund. Union officials, currently under FBI investigation, deny the charges.
Tensions are high as 4,800 marine engineers and ships' officers nationwide await the outcome of one of the most closely watched elections in the union's history. Already, dissident candidates claim persistent reports of ballot solicitation, intimidation and other dirty tricks have raised doubts about the results.
In late October, an impartial administrator canceled the original balloting -- set for Oct. 1-Nov. 30 to allow members at sea a chance to vote -- after thousands of blank ballots were discovered at a Landover printing house and several MEBA members reported receiving multiple ballots. Both sides have charged the other with foul play.
The stakes are high in the election, which was reslated for Nov. 1-Dec. 30.
Members of the dissident group say this election marks their best chance to oust officials they say are greedy and corrupt. Calling themselves the MAD Committee, for Members Against DeFries Committee -- C. E. "Gene" DeFries is the union's president -- dissidents are seeking control of lower-level offices to undercut Mr. DeFries' power base, since members this time will not be voting for president. Union officials denounce the MAD Committee as "a band of desperate and small-minded
Hostility has been building since 1988, when leaders of the marine engineers union proposed a merger with the National Maritime Union, a 20,000-member union of deckhands and other unskilled ship workers.
Union officials posed the merger question to MEBA members in a nationwide referendum two years ago, and the membership endorsed it. But despite official statements to the contrary, critics allege the rank-and-file received inadequate and misleading information about the implications of the merger -- especially regarding the marine engineers pension fund. And they say reports of intimidation and election fraud by MEBA officials cast doubt on the referendum's results.
Fueling this mistrust was a decision by top MEBA leaders to take $2 million in severance pay from union coffers at the time of the merger. A lawsuit filed in U.S. District Court in Maryland last March on behalf of four Baltimore-area MEBA members charges that these payments -- including $909,662 to President DeFries, 228,250 to Baltimore Port Agent Donald K. Masingo and hundreds of thousands of dollars to four other MEBA officials -- were not authorized by and never disclosed to MEBA members. The six officials named in the suit continue to hold top posts in the merged union.
Angry members also charge that Mr. DeFries has used union funds to support a lavish lifestyle -- including luxury homes in Washington and Florida and a $23,000-a-year chauffeur. "He has been feeding off the trough like there's no end to it," said MAD committee leader Alex Shandrowsky of Pasadena, one of four Baltimore-area plaintiffs named in the suit.
Such reports have caught the attention of federal authorities. Both the FBI and the Department of Labor are currently investigating complaints of corruption and racketeering, according to former union officials and a MAD Committee attorney who said she was interviewed by federal agents. A federal grand jury has also been conducting an inquiry.
One key question centers on the union leadership's plans for the MEBA's $1 billion pension fund, which is headquartered on Eastern Avenue in Baltimore. Before the merger referendum, according to the suit, MEBA members were told repeatedly that the merger with NMU would have no effect on the MEBA fund and that NMU and MEBA pension funds would remain completely separate. After the merger, however, union officials began to explore the possibility of merging the two funds and in August 1988 secretly filed an application with the federal Pension Benefit Guaranty Corp. to merge the assets of the pension funds.
In seeking an injunction against any such merger, the lawsuit states that MEBA's pension fund -- after subtracting all liabilities -- has a surplus of approximately $600 million, while NMU's fund, in contrast, is "significantly underfunded." The suit charges that MEBA leaders induced NMU to merge by holding out the promise of using MEBA's pension fund to help the ailing NMU fund and "personally benefited by their receipt of over $2 million in severance pay."
The merger of the two funds' assets "will cause irreparable harm to participants in the MEBA Pension Trust," according to the suit.