WASHINGTON (AP) -- Federal investigators are suing the president of a union-owned insurance company to seize subpoenaed documents he has refused to turn over, including a report about stock trades that made millions of dollars for some labor leaders.þþU.S. District Judge Ellen Segal Huvelle has ordered Robert Georgine, chairman, president and chief executive of Ullico Inc., to say why the documents should be kept secret. A hearing is scheduled for Feb. 21.þþA message left for Ullico lawyer Thomas Green was not immediately returned Thursday evening.þþThe Labor Department's suit, filed Wednesday, is the latest legal fight in a stock scandal that has pitted Georgine, the former president of the AFL-CIO's building trades department, against AFL-CIO President John Sweeney.þþAt the center is whether the special stock deals that Georgine and other Ullico board members pursued, netting a collective $6 million, will be publicly disclosed. A report by former Illinois governor James Thompson, commissioned by the board to investigate the stock trades, so far has been kept under wraps despite several lawsuits and calls for disclosure from Sweeney and other union leaders.þþUllico was created in 1925 to provide low-cost insurance to union members.þþThe Labor Department says Georgine ignored its Jan. 3 subpoena even though officials agreed to extend the deadline for documents by two weeks. The department wants documents relating to any Ullico compensation, loans and stock transaction involving Georgine.þþ``Since subpoenas allow the department to fulfill its investigative burden, to invalidate a subpoena is to question the power of Congress to delegate enforcement of federal law,'' court documents said.þþBut another government agency hasn't had success so far with its Ullico subpoenas. The Maryland Insurance Administration also is seeking the report and company documents relating to the stock deals. Ullico has sued to quash the subpoenas, arguing that the agency has no jurisdiction over the insurance company. A hearing has been scheduled for March 3 in Circuit Court in Baltimore.þþThe Justice Department and a federal grand jury also are investigating the Ullico stock deals. Meanwhile, the United Auto Workers has sued on behalf of its members, whose pension plans own more than 150,000 shares of Ullico stock, to get shareholder access to the secret report.þþBoard members only were allowed to buy the private company's stock in 1999 at $54 a share, knowing it would be upgraded to $146 a share. The board voted to buy back the shares at the $146 per share price at the end of 2000. The sale was approved with the alleged knowledge that the stock price would fall to $71.þþSweeney, who did not participate in the stock deals, resigned from Ullico's board along with Frank Hanley, president of the International Union of Operating Engineers. The 65 union presidents of the AFL-CIO are meeting in Florida later this month, and Ullico and Georgine are expected to dominate much of the discussions, which could include passage of sanctions or censure.þ
Source: NY Times
