WASHINGTON (AP) -- Congress is joining multiple investigations into sweetheart stock deals at a union-owned insurance company, but the ousted chairman subpoenaed to testify isn't cooperating.þþRobert Georgine, former chairman and chief executive of Ullico Inc., will assert his right against self-incrimination and refuse to answer questions when he appears before the House Education and Workforce Committee under subpoena Tuesday, his lawyer says.þþ``I have advised Mr. Georgine that as long as the government's investigation remains pending, prudence dictates he assert his constitutional right to remain silent, including at tomorrow's hearing,'' said his lawyer, Randall Turk.þþGeorgine, forced out last month in an overhaul of the company's top officials, has not spoken publicly about Ullico's financial problems and his role in the stock trades, which earned some labor leaders $6 million in profits.þþTurk said that an expert on Maryland law, the state in which Ullico Inc. is incorporated, ``has concluded that Mr. Georgine has done nothing wrong.''þþHowever, a separate internal investigation conducted for Ullico's board by former Illinois governor James Thompson said the stock deals may have violated that state's securities laws.þþThe ordeal has been an embarrassment for organized labor, which mounted a campaign last year calling for tougher laws to counter corporate greed in a wave of accounting scandals.þþHouse Republicans are trying to determine if the stock trades violated the Labor Management Reporting and Disclosure Act, which says union leaders have a legal responsibility to members to manage money for their benefit. A violation of the Employee Retirement Income Security Act also is a possibility, depending on whether board members were legally required to act in the interests of shareholders and the company.þþAlso investigating are the Justice and Labor departments, the Securities and Exchange Commission and the Maryland Insurance Administration. A federal grand jury has subpoenaed former board members and company officials to testify in its probe.þþThe Senate Governmental Affairs Committee has scheduled a hearing Thursday.þþGeorgine in 1999 invited Ullico directors to buy company stock at $54 a share just before they planned to upgrade the value. Because the company is privately held, the stock price isn't determined by markets and can be set by executives.þþThe stock shot up to $146 per share, then started falling. The board voted in 2000 to buy back shares at the high price before downgrading it to $71.þþThe stock deals were limited to board members and officers, and the profits came at the expense of shareholders -- mostly unions and union pension funds. Officers, including Georgine, also made millions in special purchases and other bonuses, which Thompson's report said may not have been properly approved.þþGeorgine's stock deals and compensation packages have totaled more than $12.6 million since 1998.þþThompson, in his report, recommended that labor leaders return the profits, but not all have done so.þþ
Source: NY Times
