The House Education & the Workforce Committee today released the final report on its investigation of the questionable stock transactions at the union-owned life insurance company ULLICO Inc., on Oct. 28. The cmte. report questioned whether the scandal-plagued company violated federal labor and pension laws and called on the U.S. Dept. of Labor to strictly scrutinize that question of law.
Based on witness testimony and more than 95,000 documents the Cmte. reviewed during its inquiry, there remain serious questions about whether the questionable transactions at ULLICO violated federal labor law (the Labor-Management Reporting and Disclosure Act) and federal pension law (the Employee Retirement Income Security Act). These questions were not addressed by former Ill. Gov. James Thompson, who investigated the ULLICO transactions and authored an independent report on the stock deals, because ULLICO told him not to look into those areas.
“At the very same time that union leaders were joining the chorus of well-deserved criticism of Enron and others for corporate misconduct, ULLICO set up a system of insider stock deals that made millions for the board at the expense of rank-and-file union members,” said Rep. John Boehner (R-OH), chairman of the Education & the Workforce Committee.
“When are sweetheart stock deals no longer shady stock-selling schemes? Apparently, only when the people reaping the windfalls are big labor bosses. Sadly, this came at the expense of rank-and-file union members,” said Rep. Sam Johnson (R-TX), chairman of the Employer-Employee Relations Subcommittee.
“The corruption and blatant disregard for workers that exists among far too many union leaders and was allowed to take place at ULLICO is troubling and simply unacceptable,” said Rep. Charlie Norwood (R-GA), chairman of the Workforce Protections Subcommittee.
Since April, the Education & the Workforce Committee has been conducting an investigation into alleged insider stock trading by the ULLICO board. In the course of the investigation, the Committee has requested the production of approximately 95,000 pages of documents about these transactions. Based on a review of these documents, the Committee held a hearing on June 17 to examine whether the ULLICO board of directors who participated in alleged insider stock deals acted in the best interest of their unions and union members. At the June hearing, key witnesses connected to ULLICO failed to ease congressional concerns that the sweetheart stock deals at the union-operated company did not violate federal labor and pension laws. During the hearing, former ULLICO Chairman and CEO Robert Georgine refused to testify, instead invoking his Fifth Amendment right against self incrimination. [U.S. Hse. Of Rep. Cmte. on Educ. & the Workforce, 10/28/03]