- The Washington Times - Wednesday, June 18, 2003

ASSOCIATED PRESS

The former chairman of a union-owned insurance company asserted his Fifth Amendment right against self-incrimination and refused to testify before Congress yesterday about accusations that he set up exclusive stock trades that earned some labor leaders almost $6 million in questionable profits.

Robert Georgine, former chairman and chief executive officer of ULLICO Inc., appeared under subpoena before the House Education and the Workforce Committee, but when committee Chairman John A. Boehner, Ohio Republican, asked whether he was the architect of the stock trading plans, Mr. Georgine cited his constitutional protection against self-incrimination.

Mr. Georgine, with his hands clasped on the table and his lawyer next to him, said: “Mr. Chairman, while I am confident that I have done nothing wrong, on the advice of my attorney, I respectfully decline, based upon my rights under the Fifth Amendment of the Constitution of the United States.”

Mr. Georgine also refused to answer whether ULLICO’s officers directed the investigator they hired to examine the stock trades — former Illinois Gov. James Thompson — to ignore federal pension laws in his assessment of potential wrongdoing.

Mr. Thompson’s report found that the stock deals from 1998 to 2000 probably violated securities laws in Maryland, where ULLICO is incorporated. The special trades were not offered to other shareholders.

House Republicans also are trying to determine whether the stock trades violated federal labor and pension laws.

“What seems clear is that these officers and members of ULLICO’s board — which was overwhelmingly comprised of the top officials of some of this country’s largest unions — acted inappropriately and reaped personal benefit at the expense of the very union members and pensioners they have a moral and legal duty to represent,” Mr. Boehner said.

Mr. Georgine was forced out last month by other labor leaders in an overhaul of the company’s top tier. Some union officials have returned their profits; a new board has been appointed; and a new chairman and an interim president are in place.

Other officials have been told they have 30 days to return the remaining profits.

“ULLICO’s painful experience should reinforce the lessons of the last two years of corporate scandal,” said Damon Silvers, counsel to ULLICO’s new chairman, Terry O’Sullivan, president of the Laborers International Union of North America.

The ordeal has been an embarrassment for organized labor, which mounted a campaign last year calling for tougher laws to counter corporate greed amid a wave of accounting scandals.

Organized labor cleaned up the mess, which ultimately caused little financial harm to unions and their pension funds that are invested in ULLICO, Mr. Silvers said. In comparison, other corporate scandals, such as Enron and WorldCom, imploded, causing workers to lose their jobs, their homes and their retirement savings.

Rep. George Miller of California, the committee’s top Democrat, complained that Republicans have showed little interest in those corporate scandals. Labor unions are big backers of the Democratic Party.

But Rep. Charlie Norwood, Georgia Republican, said labor laws need to be strengthened to protect union members.

“The time may be here for this committee to demand more than self-policing” from unions, he said.

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