PMA counter-sues Miniace
The Pacific Maritime Association of U.S. West Coast terminal operators has counter-sued its former president Joseph N. Miniace in federal court, alleging improprieties in Miniace's handling of a compensation package for the widow of a former PMA chief financial officer.
The litigation began in mid-summer when Miniace, 59, sued the San Francisco-based association of ocean carriers and stevedores. Miniace alleged the PMA had terminated his employment last March, had refused to pay him a bonus for 2003, another bonus for staying on the job for three years, and $500,000 for 18 months of severance pay. Miniace asked for more than $1 million in bonuses, compensation, and unspecified punitive damages.
In his lawsuit against the PMA, Miniace alleged that an unfulfilled request for preferential concessions by a terminal operator within the association led to the termination of his employment.
In a subsequent statement to the press, the PMA said Miniace's employment had been terminated March 17, by a unanimous decision of the PMA's board of directors as 'the result of an internal investigation prompted by senior staff voluntarily coming forward with information previously unknown to the board.'
'The investigation uncovered serious matters that required board action. The full board concurred that Miniace's departure was in the best interest of the PMA. The board has taken steps to strengthen its internal governance and controls, and has confidence in new CEO Jim McKenna and his staff. It is unfortunate that Joe's tenure ended the way that it did,' the PMA said in its statement.
The PMA denied that it owes money to Miniace. 'We are prepared to handle this dispute through the legal process,' the association said.
In its counter suit, the PMA alleged that the following sequence of events occurred: in 1996, Thomas M. McMahon, the PMA's chief financial officer since 1982, and Miniace contracted for a 'reverse split-dollar' insurance structure as part of a secured executive benefit plan for PMA and its executive officers. According to court papers, projections made in 1996 suggested that life insurance purchased under the plan would yield an approximate death benefit of $8.2 million, $750,000 of which would be payable to the deceased executive and $7.45 million payable to PMA.
The PMA alleged that in March 2002, after McMahon had been diagnosed with cancer, Miniace, McMahon and the insurer involved, the Corrigan Cos., 'participated in a joint plan to misappropriate the Secured Executive Benefit Plan life insurance death benefits that were due PMA upon McMahon's death.'
The PMA further alleged that 'in furtherance of the conspiracy,' the insurer, Miniace and McMahon signed amended endorsements that 'flipped the death benefits payable ' so that McMahon's beneficiaries, rather than the PMA, stood to recover the bulk of those benefits.'
The amended endorsements, the PMA alleged, 'were not known to, nor authorized by, the PMA board of directors.' After McMahon died May 3, 2002, the PMA alleged that Jeannette M. Coburn, his widow, received $9.7 million while the PMA received $986,383.
In its counter suit, the PMA asked the court to order McMahon's widow to return the money 'in whatever form it currently exists,' and impose punitive damages on Miniace and the Corrigan Cos.
Miniace declined to comment when reached at his home by Shippers' NewsWire. A spokesman for Miniace's former adversary, the International Longshore and Warehouse Union, said 'it's better all around if we say nothing about this.'
The full case title is 'Joseph N. Miniace v. Pacific Maritime Association, a California non-profit corporation, v. Joseph N. Miniace, Jeannette M. Coburn, Michael E. Corrigan, Benmark Inc., a Georgia corporation; Corrigan & Co.; Benmark West,' filed in the U.S. District Court, Northern District of California, San Francisco Division, and assigned docket number C-04-03506 (MEJ).
Miniace had been president of the PMA since 1996, including during the crucial period of 2002 when the association sought to renegotiate contracts with dockers that led to an 11-day closure of West Coast ports. On Sept. 27, 2002, he directed the PMA to shut down ports on the West Coast, locking out more than 10,000 members of the ILWU. At the time, Miniace said he acted after union members had reported intentional work slowdowns at several ports.