Several union officials said yesterday that a special advisory committee at Ullico, a labor-owned insurance company where directors face accusations of insider trading, had voted to recommend that the board make public a confidential report that, these officials said, criticizes the chief executive for the episode.þþThe committee, the officials said, acted in Washington on Tuesday at a meeting where it also voted against requiring directors who earned $6 million by trading Ullico stock to surrender those profits to the company.þþThe Labor Department, the United States attorney in Washington and the Securities and Exchange Commission are investigating whether those stock sales constituted illegal insider trading or otherwise breached the board's fiduciary duty to Ullico's shareholders, a variety of labor unions.þþThe special committee, made up of directors who did not engage in the stock sales, called on the insurer's full board, which has about two dozen members and is scheduled to meet today, to release an investigative report prepared late last year at the board's behest by James R. Thompson, former governor of Illinois.þþSeveral Ullico officials said the company's chief executive, Robert A. Georgine, had been blocking release of the report, which, the officials said, criticizes him for orchestrating the stock trades. Mr. Georgine, who long headed the A.F.L.-C.I.O.'s Building Trades Department, has repeatedly declined to discuss Mr. Thompson's inquiry or the report it produced.þþIn December 1999, Mr. Georgine invited directors to buy up to 4,000 Ullico shares each at $53.94 a share. The board periodically reset the stock price, and it then seemed inevitable that the shares would climb in value because Ullico had large holdings in Global Crossing, a telecommunications company whose stock had been soaring at a time when Ullico's own price had not been recently reset.þþIn May 2000, Ullico's board raised the share price to $146, even though Global Crossing shares had fallen nearly 50 percent from their 1999 peak. In November 2000, Ullico's board approved a stock repurchase at $146 a share, enabling directors to sell all or almost all their shares, but permitted the shareholding unions to sell only a small fraction. þþMr. Georgine and several other Ullico directors, including some current or former union presidents, sold at $146, for a profit of $92 a share. Six months later Ullico's board reset the share price at $74.þþLast November, Douglas J. McCarron, president of the carpenters' union, agreed to return more than $200,000 he had earned in the deal. Mr. McCarron said at the time that he had done nothing wrong, and a similar view was expressed on Tuesday by those who voted against requiring other directors to follow his lead, said the officials who told of the advisory committee's meeting.þþAt that meeting, the officials said, Terence O'Sullivan, president of the laborers' union, and John Wilhelm, president of the hotel and restaurant employees, voted to require directors to surrender their profits. Voting against such a requirement were the committee's co-chairmen — former Labor Secretary John T. Dunlop and Daniel H. Mintz, a Florida doctor — as well as James H. Rankin, president of the glass workers; Lenore Miller, former president of the retail and wholesale workers; John T. Joyce, former president of the bricklayers; and Vincent R. Sombrotto, former president of the letter carriers.þþþ
Source: NY Times
