Wednesday, June 23, 2010

Whistleblowing Airline Employees Association Response to United ALPA Letter of June 17th

The Whistleblowing Airline Employees Association is in receipt of a letter being circulated amongst United Airlines ALPA pilot membership, which contains some apparent 'facts' by an 'expert' regarding the termination of all defined-benefit pension plans during the United Airlines post-9/11 bankruptcy. After reviewing this correspondence, it is stronly felt by many of our members that enlightenment of this 'expert' is in order.

Firstly, it is wildly bewildering that a staunch union supporter would strongly endorse supposed 'legal actions' taken by the Pension Benefit Guarantee Corporation (PBGC) with United in bankruptcy, during the anti-labor Bush administration years, which totally shredded labor contracts and destroyed the lives of so many honest union retirees through pension termination. Why?

The author of this letter discounts the fact that the PBGC is currently under senate investigation for misdeeds during this time frame, as well as the ongoing Securities and Exchange Commission (SEC) currently investigating these same allegations. Additionally, this noted expert ignores the potential for possible upcoming litigation in the near future that must be legally addressed by the anti-trust division of the Department of Justice prior to approval of said merger.

While tossing out facts and figures, most of which might be true without consideration of the above, he fails to recognize that allegations currently under review by the SEC if proven true, negates the validity of any comments he has made with regard to pension termination/restoration.

While the United ALPA Master Executive Council may over rule forthcoming union resolutions regarding the requirement that pensions must be restored prior to pilot merger contract agreements, coincident with United CEO Glenn Tilton's recent remarks before Congressman Costello's June 16th congressional committee hearing that no provisions have been made regarding restoration of United pilot retiree and other pension plans, 'no one is above the law' if it is proven in a court of law that pension and/or securities regulations and laws were violated.

Apparently suffering from selective amnesia, while attempting to trivialize the allegation that United Airlines hid the valuable 'Mileage Plus' asset during bankruptcy, this author weakly denigrates our assertions backed by solid evidence and witness testimony that this asset had cash value during bankruptcy, which could have offset the requirement for pension termination.

His suggestion that no credible media outlet has reported on these issues might be true if one is to believe that Motley Fool's Rich Duprey and New York Times Susanna Ray and Hugo Miller are all rookie reporters for useless and unreliable news media sources. The author further ignores the distinct possibility of these issues being reported in the near future via major reputable foreign media outlets around the world.

If the 'Mileage Plus' asset had cash value to be offered immediately upon bankruptcy exit, one must ask on which side of the ledger sheet was this 'asset' posted during bankruptcy? This is one of the key issues under investigation by the Securities and Exchange Commission that is ripe for litigation in the future.

While tossing out facts and figures with excuses that this entire pension termination process was legitimate, this 'selectively knowledgeable' writer fails to mention that there is no provision within ERISA for a 4047 waiver, which begs for a legal argument in a court of law. If laws and regulations were followed to a 'T', then why has the Department of Labor and PBGC refused to respond for over two years to our Freedom of Information Act requests for answers to the six questions below?

1) Request clarification and legal authority regarding the specific reasons for the ERISA 4047 waiver in light of the weak financial health of the PBGC.

2) Request specific legal clarification and rationale regarding paragraph 13 of the attached legal agreement between United Airlines and the PBGC.

3) Request confirmation that some or all of the original $5.2-billion has been returned to United Airlines with specific dollar figures and financial arrangements made to accommodate said transaction.

4) FOIA requests made indicate that there is no record of an ERISA-mandated pension audit conducted to determine the financial soundness of employee pensions before termination. Kindly provide records of the federally-mandated audit.  

5) There is no record of an ERISA-mandated forensic audit being conducted after the pension terminations. Kindly provide records of the federally-mandated audit.

6) Information regarding the data used in the formulation of the Gross Average Mortality (GAM), which is employed to assess the financial soundness of pension programs is unavailable. Kindly provide the data used to formulate the GAM.

The SEC has these issues under investigation also.

With regard to allegations concerning the bankruptcy judge, it should be noted that the Department of Justice Inspector General's office has consistently stated that 'this office does not have jurisdiction over matters such as these', while both Senator Leahy and Congressman Conyers continue to ignore the serious allegations leveled by key Sarbanes-Oxley whistleblower witness Michael Lynch and his associates. The SEC has been apprised of these matters also with hopes of encouraging the DOJ to join this investigation in the near future.

The author fails to mention that key ALPA leadership officials were invited to join Mr. Lynch and his legal team in Chicago over two years ago to review strong evidence and interview witnesses, but declined the invitation to this meeting.

Finally, the author suggests to ALPA pilot retires that "the time has come - as it eventually does with all life's tragedies - to let go emotionally and move on" while failing to acknowledge that active United pilots received a $550-million bankruptcy exit bonus for agreeing to terminate ALL pension plans on the property on bankruptcy exit. Additionally, the younger pilots are very happy with 9% going into the B-fund and 7% going into the C-fund. With 16% of their gross and maximizing their 401 K contributions, a pilot with 20 years to go is looking at $2 million or more at retirement.

As the old adage states 'what goes around comes around' and the Whistleblowing Airline Employees Association membership will continue to observe these pilots repeat the history of the past of 'shared sacrifice' as they are destined to repeat it as the global airline industry consolidation continues.

Aer Lingus is just the tip of the iceberg and most analysts anticipate the future passage of legislation that enables foreign ownership of U.S. carriers and cabotage laws enabling foreign cockpit crews to absorb routes over U.S. airspace once held by their carriers, but relinquished to lower paid cockpit crews. Makes good 'business sense', doesn't it?

Where oh where have the REAL ALPA PILOTS gone? This is the repeated question being asked by retired pilots from days of yore who fought hard for the contracts of the past that were destroyed through acceptance of a 'few pieces of silver' by line pilots today. History is destined to repeat itself.

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