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Baltimore dock union facing takeover amid contract talks

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After an investigation that revealed missing money and questionable financial practices, officials of a national longshoremen's union are considering seizing control of a Baltimore chapter — a move that could complicate contract negotiations at the port.

According to an internal committee report of the International Longshoremen's Association obtained by The Baltimore Sun, a "trusteeship hearing" in Baltimore found that money was missing from accounts of ILA Local 333. It also found that union debit cards were used for nonunion expenses.

The committee, which also noted a feud between two of the local's officers, said it had "uncovered a number of financial practices that could expose the local to investigations by the Department of Labor and perhaps even liability." It retained jurisdiction over the investigation pending an independent audit of the local chapter's finances, a process that is ongoing, according to Kevin J. Marrinan, a national ILA attorney.

The investigation and infighting could affect contract negotiations at the port, which employs more than 14,600 workers and is responsible for $3 billion in personal wages and salaries, according to Maryland Port Administration statistics.

Darrell VanDeusen, a local labor attorney who represents employers in contract negotiations but is not involved in the ILA contract, said it is hard to tell whether unionized longshoremen or port of Baltimore employers would benefit more from a national takeover of Local 333, partly because "so much in negotiations really is the individual relationships" that people have with those sitting across from them.

But if stubborn local officers distracted by infighting within their union were removed, everyone could benefit, VanDeusen said, even if the international officials aren't any "kinder or gentler" than their local counterparts.

"I don't care who I'm going to be talking to, but if I'm going to be talking to someone who has authority and isn't going to be distracted by all this other stuff, that's fine," said VanDeusen, also an adjunct professor of labor and employment at the University of Baltimore School of Law.

Neither Local 333 officials nor their attorney responded to requests for comment.

Union leaders have been immersed in heated contract negotiations since October, when Local 333 — Baltimore's largest ILA chapter, with some 1,200 members — called a three-day strike that paralyzed operations at the port's public terminals. The strike raised doubts among port customers about Baltimore's reliability as a major port of call.

A federal arbitrator ordered the local to pay nearly $4 million in damages for the strike's impact on container cargo, which is protected against work stoppages under a separate coastwide master contract. National ILA officials publicly stepped in to help lead the local contract negotiations in February, with hopes of negotiating down the amount of damages.

The ILA committee report noted that the local's secretary-treasurer, Daryl Wilburn, and its president, Riker "Rocky" McKenzie, had been feuding — a dispute that triggered the look into its finances.

In early November, weeks after the strike, the two got into a fight and police went to the union hall on Hull Street in Locust Point. That day, McKenzie filed a written complaint in Baltimore District Court alleging that Wilburn had assaulted him, "jerking, yanking and finally lifting me ... and slamming me into the concrete tile floor with vicious force causing injury to my neck, head, jaw and back."

Ten days later, Wilburn filed a countercomplaint, alleging that McKenzie had "attempted to murder" him by trying to push him over a second-floor railing. "Mr. McKenzie came into my office in an aggressive manner and threw papers, banged and shook cabinets, attempted to force me to change documents for his benefit," Wilburn wrote.

Both men face charges of second-degree assault and reckless endangerment, which are scheduled to be aired at a trial Tuesday.

Within weeks of the fight, Wilburn sent a long list of complaints to national ILA officials about the local's operations under McKenzie, asking the officials to "come protect the assets and funds of the ILA."

ILA President Harold Daggett soon called the "trusteeship hearing," which was held over seven hours Dec. 17 in the Renaissance Baltimore Harborplace Hotel. The committee's findings were sent to Local 333 officials in mid-February.

The report noted violations of the ILA constitution and Local 333's bylaws and questioned some of the local's financial practices. The committee said McKenzie's $50-per-day meal and unlimited fuel allowances would "raise a red flag for any investigator from the Department of Labor."

Unions submit detailed annual financial filings to the U.S. Department of Labor, which sets standards for safeguarding union assets.

The last financial filing that Local 333 submitted is for fiscal year 2012, when the local reported about $1.1 million in total receipts and nearly $2 million in net assets, according to the Labor Department website.

McKenzie declined to speak to a reporter when reached for this article, and other members of the Local 333 executive board did not respond to an email sent to a Local 333 media account. The union's attorney, Jennifer Stair, did not reply to a request for comment.

The committee also noted a personal bank account set up by McKenzie under the name ILAA, and said it "raises unnecessary concerns" because of the similarity to the union name.

McKenzie "did not dispute that he had set up his account this way," the committee wrote, but "could not explain what the initials 'ILAA' stood for."

According to the Maryland Department of Assessments and Taxation, McKenzie is listed as the primary owner of a company named ILAA that is registered through November 2015. When he filed for and was awarded the ILAA trade name in November 2010, he described the business as "human services consulting and referrals of clients for needed resources," according to online records.

In separate Chapter 13 personal bankruptcy filings, an ongoing proceeding, McKenzie listed ILAA Travel Agency as a business holding between 2003 and 2007.

The committee found that McKenzie had maintained the ILAA bank account even though a separate ILA committee had directed him in 2010 to place it under his own name, according to the report. The committee ordered McKenzie to immediately close the account.

The committee also found that union debit cards "had been used many times for items that were clearly unrelated to union business," that vague card statements made it impossible to determine the reason for other expenses, and that the entire debit card system was a "recipe for disaster," according to the report.

The committee noted that a previous internal audit by Local 333 had difficulty documenting $5,000 in debit card charges and could not account for $2,000 more, according to the report. It was unclear whether the discrepancies were simply due to poor record-keeping.

In addition, the committee identified a $1,600 charge that Wilburn made on a union debit card during a trip to Las Vegas, noting that it "found it ironic that Wilburn had brought charges about the misuse of union funds when he himself was guilty of one of the more egregious examples."

Wilburn said in an interview that he used his union debit card in Las Vegas because he had forgotten his own credit card and later repaid the money.

Wilburn took his complaints about Local 333's operations to the international to help save it, he told The Sun, adding, "The best thing that has happened to this local is that the international has stepped in."

Wilburn said he can't explain the problems noted in the internal audit, which he said was conducted by other members of the executive board without his assistance. He said his access to the local's financial records was cut off after he was suspended from office by McKenzie and other Local 333 officials, restored by the local's membership and then removed once more by officials — all in the past six months.

Beyond requiring the outside audit, the trusteeship committee issued several other recommendations, including that Local 333 immediately terminate all debit cards drawn on its bank accounts. The local was also told to eliminate advances of prepaid debit cards and meal and travel per diems in favor of a reimbursement system.

If the international were to decide to establish a trusteeship over Local 333, it would be removing the union's hometown leaders from office just as they are trying to secure a new local contract with employers at the port.

Such a move would add yet another wrinkle to what is already a complex contract negotiation with multiple stakeholders, millions of dollars at issue and a long trail of brinkmanship. But the ultimate impact remains unclear, labor experts say.

The international has expressed solidarity with Local 333 in the contract fight, so the effect of a trusteeship could be strictly managerial, said Philip Dine, writer of "State of the Unions," a look at how unions regain influence in a modern economy.

At the same time, Dine said, Local 333 has a reputation for being tough and scrappy in negotiations. The national organization has a reputation as a powerful union "that doesn't necessarily use that power all the time" in pushing negotiations to the limit, he said.

"They're not known as sort of a rash or brash union," Dine said. "They stand up for their members, but they do try to work with their employers."

Marrinan, the national ILA attorney, said the process is working as it should. The committee has not made any decisions since issuing its findings and is awaiting information, including the outside audit, before making a final decision on a trusteeship.

"Let's see if there's anything going on in the financial practices, see if everything that should be in place is in place," he said.

Marrinan said trusteeships generally last about 18 months as national leaders assess a local's health and restore order. In addition to financial failings, infighting within a local's hierarchy is often cause to step in if work isn't getting accomplished, he said.

National ILA officials declined to comment on the report, its findings or the Local 333 infighting.

"If someone gave you a document that they shouldn't have, that's fine, but we still can't comment on it," said Jim McNamara, the national ILA spokesman, after being asked about the committee report.

While the effects of the review remain unknown, some at the port of Baltimore welcomed the news of the committee's forming as auspicious, according to emails and other documents obtained through a Maryland Public Information Act request.

"I just heard that the international is sending down to Baltimore an investigative committee to look at local 333. ... They were thinking of engaging the District Council and talking receivership!!! happy Thanksgiving for sure!!!" wrote James White, executive director of the Maryland Port Administration, in a Nov. 29 email to several major port employers.

White declined to comment on the trusteeship review or his email.

Michael Angelos, president of the Steamship Trade Association, which represents the port employers negotiating the contract with Local 333, did not respond to requests for comment.

If Local 333 is put under trusteeship, it would not be the first time.

In previous interviews, McKenzie has said that many of the contract provisions now being disputed by Local 333 — particularly rules for how jobs are assigned on the docks — hark back to the last time the local was under trusteeship, in 2005 and 2006.

It was then, McKenzie said in a January interview, that national ILA officials "gave the right of the local to govern and run its own affairs" away to port employers.

krector@baltsun.com

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Copyright © 2014, The Baltimore Sun
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