Harbor pilot is caught in desperate tug of war

Krause faces losing his license or family tugboat company

April 03, 2001|By Paul Adams | Paul Adams,SUN STAFF

For generations, the pilots who climb aboard incoming cargo ships and guide them into the port of Baltimore often learned their trade while working aboard the tugboats that help muscle the ships into berth.

Most trained as deckhands and tugboat captains for years before graduating to the elite title of docking pilot, a position that pays in six figures. Because docking pilots have authority over how and when tugs are used, each tugboat service maintained its own group of pilots loyal to the company.

That time-tested system was abandoned Oct. 1 after Maryland passed a law requiring Baltimore's 10 docking pilots to form an independent association and become licensed by the state.

In part to increase safety, the law separated docking pilots from tugboat companies so that they would be free to make decisions without concern for how it might affect the bottom line of the tugboat companies that once employed them.

But the family of one of those docking pilots, Joseph L. Krause Jr., operates one of the port's three major tugboat companies, a situation that some say raises questions about Krause's objectivity as a docking pilot.

Two rival tug companies have cried foul, saying Krause could use his state-sanctioned position as a docking pilot to steer business toward his family's company and away from competitors.

It's exactly the kind of conflict of interest the Docking Masters Act was designed to eliminate, but instead lawmakers find themselves caught in the middle of a long-simmering turf war among the port's three major tugboat companies.

At stake is the future of Krause Marine Towing Corp., one of the few remaining independently owned tug companies on the East Coast and whose competition is credited with lowering rates over the past 12 years.

Moran Towing and McAllister Towing have taken their case against Krause to the Maryland Board of Docking Masters, which proposed a new regulation that would prohibit docking pilots from having a financial interest in a tugboat company.

The restriction extends to family members - a provision aimed directly at Krause, who transferred his stake in Krause Marine to his wife last year as a pre-emptive move.

Krause insists there is no conflict of interest and dismisses the complaint as another attempt by his competitors to destroy the business he has worked so hard to build.

"What has happened to the free enterprise system in this country?" Krause said. "I was put in a situation where a new law was created that says either I don't do what I love anymore - which is dock ships - or my family has to give up the [tug] company."

Some state lawmakers have come to Krause's defense, saying the law passed last year was never meant to hurt anybody's livelihood and does not explicitly prohibit pilots or their families from owning a tugboat company.

A proposed amendment pending before the Senate would prohibit docking pilots from owning a tugboat company, but says nothing about transferring such assets to family members.

That would allow Krause to keep his docking pilot's license while protecting his family's company.

"Where else in the law can you take a business away from people?" said Del. Michael E. Busch, an Anne Arundel Democrat who supports the measure.

Lawmakers acknowledge there is little enthusiasm for taking up the docking pilot issue this year. The original legislation, which was designed to head off federal regulation of the docking pilots, sparked vitriolic debate among rival parties and became one of the most heavily lobbied issues before the General Assembly last year.

Though the proposed amendment to the law passed handily in the House recently, supporters say it could face a tougher challenge in the Senate, where Majority Leader Clarence W. Blount has expressed concern about amending a law that is less than a year old.

"You don't pass a bill one year and then, bam, four months later you got another bill doing something else," Blount said. He pledged to give the bill a fair hearing.

The Maryland Board of Docking Masters, which oversees the docking pilots, has largely sided with Moran and McAllister.

However, Edward Mohler, chairman of the licensing board and president of the Maryland and D.C. AFL-CIO, said the board has postponed action on the conflict-of-interest regulation until after the General Assembly votes on the amendments to the Docking Masters Act.

Representatives of Moran Towing, which controls about 60 percent of the market in Baltimore, declined to comment on the matter while the legislation is pending. But testimony submitted to the state licensing board details some of the company's concerns.

Part of the problem is that the new law requires the 10 state docking pilots to take turns guiding ships into port, regardless of which tugboat company is contracted by the shipowner to assist with the job. As a result, Krause is often required to pilot ships that have contracted to use his rivals' tugboats for assistance.

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