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The ULLICO scandal (Mcauliffe, Global Crossing)
The Washington Times ^
| June 22, 2003
Posted on 06/26/2003 9:50:42 PM PDT by Bayou City
Edited on 07/12/2004 3:40:27 PM PDT by Jim Robinson.
[history]
Incorruptible labor legends Samuel Gompers and George Meany must be spinning in their graves. After becoming the first president of the American Federation of Labor (AFL) in 1886, Mr. Gompers founded the Union Labor Life Insurance Co. (now the major subsidiary of the ULLICO holding company) in 1925 in order to provide affordable insurance and other financial services to union members. Mr. Meany, who became the first president of the merged AFL-CIO in 1955 and served in that capacity for a quarter-century, worked inexhaustibly to eliminate corruption within the labor movement — which included expelling the Teamsters from the AFL-CIO in 1957. That same year, the AFL-CIO adopted a rule mandating the expulsion of any union official invoking the Fifth Amendment to avoid scrutiny in a corruption case.
(Excerpt) Read more at washingtontimes.com ...
TOPICS: Business/Economy; Crime/Corruption; Culture/Society; Extended News; Free Republic; Front Page News; Government; News/Current Events; Politics/Elections
KEYWORDS: aflcio; crossing; georgine; global; globalcrossing; mcauliffe; scandal; ullico; union
To: *GlobalCrossing; Ernest_at_the_Beach; JohnHuang2; Grampa Dave; ETERNAL WARMING; MeeknMing; ...
Update ping!
To: Bayou City
Does this mean the unions are finally going to get their dues.
3
posted on
06/26/2003 10:49:45 PM PDT
by
CyberAnt
( America - You Are The Greatest!!)
To: Bayou City; Liz
Thanks for the update. These union thugs leaders are something else.
In 1998 and 1999, Mr. Georgine secretly offered directors and officers exclusive opportunities to purchase a total of 8,000 shares of ULLICO stock before the annual adjustment of its stock price was made. (Union pension funds, which held the vast majority of ULLICO's stock, were virtually shut out of the surefire get-rich-quick scheme.) In a Dec. 17, 1999 confidential memo, for example, Mr. Georgine offered the union directors and officers the opportunity to purchase 4,000 shares of ULLICO stock at $54 per share. Global Crossing closed at $52.56 (nearly two-and-a-half times its year-earlier price of $22.50) on Dec. 16, 1999, the day before Mr. Georgine wrote his confidential memo. Thus, it was a certainty that ULLICO's share price would soar when it was reassessed two weeks later. As it happened, the ULLICO shares purchased for $54 jumped in value to $146 after the annual share-price adjustment.
In March 2000, however, Global Crossing's stock price began to fall. By December 2000, it had plummeted below $15 a share. Global Crossing's collapse would adversely affect ULLICO's share price in a very big way. (But, not to worry if you were a ULLICO officer or director.) During December 2000 and January 2001, ULLICO repurchased more than 200,000 shares from its union-boss directors and officers at $146 per share. Shares purchased by the bosses a year earlier at $54 were redeemed at $146, yielding a profit of nearly $100 per share, even though Global Crossing's share price had plunged, necessitating a huge markdown in ULLICO's share price. Mr. Georgine netted a pre-tax profit of $840,000, while Mr. McCarron collected $420,000. Mr. Maddaloni reportedly pocketed nearly $250,000.
4
posted on
06/27/2003 5:40:41 AM PDT
by
Grampa Dave
(Evil Old White Devil Californian Grampa for big Al Sharpton and Nader in primaries!)
Comment #5 Removed by Moderator
To: Grampa Dave; Bayou City; CyberAnt
BACKSTORY BACKSTORY BACKSTORY BACKSTORY BACKSTORY
LaborTalk for January 29, 2003 / www.laboreducator.org
Investigators Subpoena ULLICO Records; Union Leaders on Board Back Coverup By Harry Kelber
The ULLICO insiders stock-trading scandal has become a time-bomb waiting to explode, and when it does, it will damage the reputations of more than a dozen national union leaders and the labor movement itself.
The latest group to investigate the union-owned insurance company is the Maryland Insurance Administration, which has subpoenaed its records, including a highly critical report of ULLICOs board of directors by former Illinois Gov. James Thompson.
Thompson was hired by the companys directors last May to conduct an internal investigation, after their self-enriching stock scheme became public and drew the attention of a Washington grand jury. Thompson interviewed some 50 individuals and examined thousands of documents over a period of several months.
To the surprise of the directors, who had expected a whitewash, Thompsons 70-page report was highly critical, suggesting they return a total of more than $6.5 million of the profits they gained from their insiders stock transactions.
The companys directors are under fire because they gave themselves the privilege of buying up to 4,000 shares at $53.04 each and then selling them back to the company at $146 a share. And then when they knew that the stock was going to slump to $75, they resold their shares to the company at $146 a share. Union pension funds were excluded from this lucrative deal.
Robert Georgine, ULLICOs president and chief executive officer, is refusing to release the Thompson report on the grounds that it is protected by attorney-client privilege. Georgine was president of the AFL-CIO Building and Construction Trades Department for 25 years, part of which he also served as ULLICOs chief officer.
Georgine, who created the shady stock scheme and allegedly pocketed several million in profits, is supported by a majority of the board, consisting mostly of current and retired national labor leaders who were given seats on the board by Georgine because they are his cronies.
Anger Rising Within AFL-CIO Unions
The ULLICO scandal was kept hush-hush within the labor movement for many months until Dec. 2, 2002, when AFL-CIO President John Sweeney and Frank Hanley, president of the International Union of Operating Engineers, resigned as directors in protest against Georgines refusal to release the Thompson report.
Since then, there has been mounting resentment from pension fund shareholders, demanding that Georgine and board members return the profits they made from their stock-trading scheme. Douglas McCarron, president of the United Brotherhood of Carpenters, said he would return to ULLICO an estimated $276,000 which he said he made in profit as one of the board directors.
Several international union presidents are considering whether to introduce a resolution calling for Georgine to resign and that the Thompson report be made public, when the AFL-CIO Executive Council meets Feb. 25-27 in Hollywood, Fla.
ULLICO lawyers argue that Georgine and other board members did nothing wrong in profiting from buying and selling company stock, which, they say, is fairly common in privately-held firms.
The stock scandal is the subject of other investigations. The U.S. Labor Department is conducting an independent inquiry to determine whether the union leaders on the board, in their management roles, breached their fiduciary responsibilities to their own union pension funds.
The anti-union National Right to Work Legal Defense Fund has also asked for an investigation of ULLICOs activities by the National Labor Relations Board, and the Securities and Exchange Commission has questions it wants answered by the companys directors.
Here is a list of current international union presidents who have decided to remain on the ULLICO board and are going along with Georgines efforts to keep the Thompson report under wraps:
Morton Bahr, president, Communications Workers of America; Frank D. Hurt, president, Bakery, Confectionery and Tobacco Workers; Earl J. Kruse, president, United Union of Roofers and Waterproofers; James LaSala, president, Amalgamated Transit Union; Martin J. Maddaloni, president, United Association of Pipefitters; Terence OSullivan, president, Laborers International Union; Eugene Upshaw, president, Federation of Professional Athletes; and John W. Wilhelm, president, Hotel Employees and Restaurant Employees.
6
posted on
06/27/2003 6:02:12 AM PDT
by
Liz
To: Elle Bee
How odd that Sweeney just stood by, while his fellow union thugs
ULLICO board members milked the Global Crossing cash cow dry.
(/sarcasm)
7
posted on
06/27/2003 6:12:23 AM PDT
by
MamaLucci
To: Bayou City
8
posted on
06/27/2003 6:16:23 AM PDT
by
MeekOneGOP
(Bu-bye Dixie Chimps! / Check out my Freeper site !: http://home.attbi.com/~freeper/wsb/index.html)
To: Bayou City
Thanks for the heads up!
To: MamaLucci
he didn't just stand by
in fact he leaked the entire story to purge the afl of those he considered disloyal and uncontrolable
That's not to say they had any more redeeming value than Sweeney
.
10
posted on
06/27/2003 7:42:42 PM PDT
by
Elle Bee
To: Liz; Elle Bee
Who is the prognosis? The reptiles seem to always be this close to the hook and then they slither away.
11
posted on
06/28/2003 10:00:12 PM PDT
by
DPB101
To: DPB101
The reptiles seem to always be this close to the hook and then they slither away. I've consistently maintained that the bar of justice is raised too high. We can thank the ACLU -- the criminals' lobby --for forging unreasonable standards for obtaining evidence, bringing charges, even for what constitutes a crime, and so on.
12
posted on
06/29/2003 2:14:15 AM PDT
by
Liz
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