Georgine Out as CEO, Now Faces Hearings in House and Senate

Robert Georgine gave up his fight to keep his job as chairman of the union-pension-owned Ullico on May 8, recognizing that an almost entirely new board was intent on pushing him out.  “I can count the votes and it is clear to me that ULLICO will have new management,” he said in a news release. 

Georgine said he would allow the Board to keep his $2 million severance payment to repay the insurance company for his and other directors’ profits from insider deals of Ullico stock.  It won’t go far toward covering Ullico’s pretax loss of $115.9 million last year, much of it due to the free-fall of Ullico stock in tandem with Global Crossing’s spiral toward bankruptcy.  And Georgine would have done better to not run up $10 million in legal bills, some of it spent fighting the release of a report criticizing the transactions.  Georgine’s stated willingness to give up his severance is also an about-face from his previous insistence that neither he or the other union directors who profited from selling their shares of Ullico stock before it collapsed were obligated to return their profits. [For a summary of the transactions, see]

Replacing Georgine as Chairman is Terrence O’Sullivan, president of the Laborers Intl. Union of N. Amer., one of the few reelected board members, who did not participate in the stock deals.  Georgine’s problems are not over.  A federal grand jury has subpoenaed several board members and company officials.  The House Education and Workforce Committee has subpoenaed Georgine to testify about the scandal on June 10, and the Senate Governmental Affairs Committee has scheduled a hearing for June 19. [ULLICO News Release, 5/8/03: New York Times, 5/9/03: Associated Press]