Villagers feel betrayed by former pitching star Packing plant is closed

Denny McLain accused of pension plan looting

December 01, 1996|By NEW YORK TIMES NEWS SERVICE

CHESANING, Mich. -- Three years ago, this small village embraced a plan by Denny McLain, baseball's last 30-game winner, to resuscitate an ailing packing plant that had provided livelihoods to people here for generations.

McLain, the former Detroit Tigers star, and a partner bought Peet Packing Co., whose 200 workers made smoked meats, cold cuts and sausages that were sold primarily in the East and Midwest.

Many in this village, about 20 miles northwest of Flint, knew of McLain's checkered past, including a guilty plea in 1988 to federal charges of racketeering and cocaine possession, and a poor track record in business.

Still, they desperately courted hope, and it seemed that McLain could deliver it, as he had to Tigers fans.

Now, three years after the purchase, residents are seething. The 110-year-old plant closed last year. McLain, 52, and his partner, Roger Smigiel, 45, both of suburban Detroit, are to go on trial in federal court in Detroit on Tuesday, charged with looting the company's pension fund of $3 million.

McLain could get up to eight years in prison if convicted on the five-count indictment. Many villagers feel betrayed and hope he winds up behind bars.

"I was deeply hurt to see one man could cause so much damage to so many lives in the community," said Mayor Ray Mahoney, who worked for Peet for 39 years fixing refrigeration equipment. "He came in with a big ray of hope, but I didn't trust him, from his past problems he had with the law.

"The company probably would have survived if he didn't touch it," added Mahoney, who is now self-employed. "I'm hoping they put a stop to his racketeering, even if it means jail time."

But McLain contends that he did nothing intentionally wrong and that the money was used to bolster the company's finances.

The closing has cast a pall on Chesaning's 150th birthday this year. Some of the former Peet workers in this village of 2,600, many of Eastern European descent, are finding little to celebrate, having taken other jobs, often for less money and inferior benefits.

"Peet Packing was a very integral part of the area economy," said Dan Stasa, the village administrator. The closing "forced some people to relocate," he said, and "forced others to take jobs where they have to travel greater distances."

McLain left baseball in the early 1970s and opened a variety of businesses in Florida, leaving a trail of bad debts.

In 1985, in Tampa, he was convicted of racketeering, extortion and cocaine trafficking. He served 29 months of a 23-year prison sentence before his case was overturned on appeal in 1987. He pleaded guilty to lesser charges and was sentenced to the time served and probation.

By the early 1990s, McLain, who won the Cy Young Award as the best American League pitcher in 1968, when he won 31 games, and in 1969, was flourishing again, reportedly earning $400,000 a year in Detroit as a radio talk-show host and a co-host on a weekly television sports show.

Then in 1994 he traded it all for Peet.

"He was a daring, swashbuckling gambler," said a friend, Eli Zaret, a sportscaster who shared the show with McLain, who was suspended from baseball in 1970 for consorting with gamblers. "Maybe things got too good and he had to find an edge."

McLain, articulate and charming, with the status of a sports legend, overshadowed his partner and was seen in the community as the symbol of Peet's renaissance.

So when the plant closed, most residents blamed McLain.

David DuMouchel, McLain's lawyer, said the people of Chesaning were wrong to blame his client for Peet's failure. He said the pension money had nothing to do with the company's health.

"The company was all but down when these guys came in," he said. "It was in terrible financial trouble. There's no disputing that. They couldn't have used the pension-fund money to pay employees or use it to buy meat."

"The notion that Smigiel and McLain would knowingly take money from the employee pension fund" illegally, said Thomas Cranmer, Smigiel's lawyer, "is ridiculous and illogical."

Federal authorities allege that a financier from suburban Detroit, Jeffrey Egan, transferred pension money into dummy corporations for McLain and Smigiel. The authorities also allege that they mixed pension money with company accounts, spending it on outside businesses and personal uses, as well as the company's needs.

Egan pleaded guilty and is expected to testify that both men knew using the money was wrong.

Smigiel said in an interview last year that Egan had told them they could use the money.

Federal law generally forbids employers from taking money from pension funds without permission from the Labor Department.

"Everything was done to enhance the value of the corporation," McLain said in an interview last year. "Shame on us that it didn't work out as well as we had hoped. There were some rules out there we weren't aware of. I don't know what that makes us."

The Peet pension fund still has about $10.3 million in cash and investments, said Mark Steckloff, a lawyer who oversees the pension fund on behalf of 475 former employees. He also said that no one had lost benefits but that future pensioners could if the missing money is not recouped.

Pub Date: 12/01/96

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