The complicated business of switching boats around when there's a breakdown and finding fill-in deck workers to cover for sick or late employees all takes place in the State Ferries Dispatch Center, located in downtown Seattle.

For the last two years, Captain Pete Williams has been in charge of dispatch.

Williams has a reputation of being grouchy, but frugal; a manager known for finding ways to limit overtime and costly perks for employees, in order to save the ferry system a buck. His tactics appear to work. This year, the Dispatch Center is on track to save more than a half-million dollars in overtime, compared to last year.

The Secretary of the Washington State Department of Transportation, Paula Hammond, called Pete Williams a model money-saving manager.

You have to look for ways to cut costs in the system. That's their job and Pete Williams is very good at that, no question, she said.

For the past three months the KING 5 Investigators have exposed millions of dollars of waste at the state s ferry system, the largest ferry system in the country. The revelation that multi-million-dollar perks were being collected for years by a select group of ferry employees and instances of other workers cashing in on massive amounts of unregulated overtime every year was particularly difficult for taxpayers to swallow given the dire financial straits of State Ferries and the state s financially poor economic health in general.

As KING 5 rolled out one story after another, transportation leaders promised reform and a commitment to cutting costs wherever possible.

What we will look for is every opportunity (to save) because we ve got to make the system more financially sustainable, said the Director of Ferries, David Moseley last month.

But exactly during this time, a strange thing happened to Capt. Pete Williams, the outspoken advocate of saving the ferry system money. Last month Secretary Hammond quietly took away one of Williams key responsibilities: representing the state at the bargaining table during union negotiations for the past six years.

The union for the captains and mates the MMP - complained Williams was rude and disrespectful. After that, Williams was out. The decision was made by Transportation Secretary Hammond.

I'm trying to get a respectful table put together so that we don't have people griping at each other, and when they walk in, hostility erupts. I'm not saying that that's what he did, but that's how it was being reported that there's this attitude against each other, said Hammond.

A key negotiator for the state - Ferry Operations Director Steve Rodgers - was blindsided and furious.

KING-TV obtained internal e-mails he wrote to Director Moseley.

I stand in complete disagreement with the decision to remove (Pete). It was based on hearsay given to you by an adversarial party with ulterior motives.

Rodgers didn t stop there. In an e-mail sent to Williams, he said, I have never witnessed anything but professional conduct from you, so I have no idea where or why this surfaces now.

In fact, Governor Gregoire herself commended Williams on his expert work in negotiations in the past.She sent Williams a letter in 2006 thanking him for his professionalism, perseverance, and creativity in negotiating a union contract back then.

Secretary Hammond couldn't come up with any specifics on exactly how Williams has been disrespectful. She admitted to KING 5 that she got input from the union, but didn t consult with anyone on her own negotiating team.

I take my responsibility as the buck stops here very seriously. I'm sorry our managers feel like somehow we've sent the wrong message. It's my decision. When one of them is secretary, then they can make their own decisions, but until then, I'm responsible for this agency and I'm going to have a respectful environment, said Hammond.

Mike Ennis is the Director of the Center for Transportation at the Washington Policy Center, a conservative think-tank in Seattle.

It's outrageous. I'm outraged. As a taxpayer he (Williams) is someone that I would want on a negotiating team. Someone with a reputation of cost savings for me, the taxpayer, said Ennis.

Ennis said unions should never influence who's on the other side of the table, bargaining for the taxpayers.

You have the governor and the Secretary of Transportation saying they're for reform, for the ferry system. Your investigation has prompted them to say those kinds of things, yet you uncover something like this? It makes me wonder whether they are perpetuating the system that got them into this trouble in the first place or if they are truly for reform, said Ennis.

In an e-mail written last month a top ferry manager suspected the move was politically motivated - a way to keep the unions happy.

Steve Rodgers wrote to Pete Williams: My opinion is the unions would like your expertise (in containing costs) removed from the table. Apparently the unions have much more credibility than you or I.

Secretary Hammond is adamant the decision was not about currying political favor with labor unions. She said it was a move to give the ferry system the best team possible to cut out as much fat as possible from union contracts.

By God, the ferry system needs help. It can t operate on the funding it has. We must all pull together and that means employees giving up on some of the benefits and compensation they've had, said Hammond.

You have to ask yourself, if the union has influence over who sits at that table, whose side is the team on? Are they on the side of the taxpayer, or are they on the side of the union? said Ennis.

KING requested interviews with both Williams and Rodgers, but Washington State Ferries officials said they weren t available. In e-mails obtained by the KING 5 Investigators, Williams made it clear why he thinks the union wanted him removed from the table.

On May 19 he wrote to Director Moseley.

I took over a department (the Dispatch Center) that was in a state of chaos left behind by my predecessor, wrote Williams. It was a system of taking care of the good old boys... I do not allow myself to be swayed by friendship or do I promote the good old boys club... It now appears, at least on the surface, standing behind directives (to save taxpayer dollars) given to me and those I work for, has now been deemed a problem in negotiations.

All unions representing state workers are currently in contract negotiations with the state of Washington. The bargaining will continue into the fall after which the agreements will be presented to the legislature for approval. This negotiations, described by Secretary Hammond as a critical and tough process, is taking place for the first time in six years without Pete Williams.

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