- The Washington Times - Wednesday, November 27, 2002

November has been a bad month for AFL-CIO President John Sweeney, and December doesn't look like it will be any better. With Republicans capturing the Senate and securing their majority in the House, the midterm elections were a disaster for Big Labor, which poured nearly all of its political contributions into the Democratic debacle. Adding to the pain, Mr. Sweeney learned from Democratic pollster Stanley Greenberg that election-day surveys revealed that union members cast an historically paltry 58 percent of their votes for Democratic congressional candidates. Mr. Greenberg's numbers also showed that relatives of white union members actually favored Republican candidates, 47 percent to 46 percent.
Meanwhile, the burgeoning ULLICO scandal, which involves some of Big Labor's most powerful officials, offers Mr. Sweeney a lose-lose proposition.
ULLICO is the union-owned insurance company whose share price soared and then collapsed in tandem with the value of ULLICO's investment in once-high-flying Global Crossing, which is now bankrupt. Several of the union bosses who sit on ULLICO's board reaped hundreds of thousands in highly questionable profits through a secret scheme that permitted them to buy ULLICO shares at an absurdly low price of $54 and later sell them for an absurdly high price of $146. The stench from what has become known as Big Labor's Enron was so putrid that one beneficiary of the scheme Douglas McCarron, the president of the carpenters and joiners union has already pledged to return the nearly $300,000 in profits he made from the questionable insider-trading activity.
After the details of the stock-trading scheme became public in April, Mr. Sweeney, who is a member of ULLICO's board but apparently did not participate in the surefire get-rich scheme, insisted that ULLICO hire former Illinois Gov. James Thompson to oversee an investigation. Mr. Thompson has now completed the investigation. His review reportedly calls on other board members, including Chairman and CEO Robert Georgine, to return the millions of dollars in cumulative profits generated by the secret scheme. The report also describes the various laws that may have been violated.
The report was scheduled to be presented to the board on Nov. 20, but Mr. Georgine canceled the board meeting amid fierce infighting between himself and Mr. Sweeney, who wants the report made public. For his part, Mr. Georgine, who organized the secret scheme and reportedly made the most money from the questionable stock transactions, wants the report to be covered by attorney-client privilege.
In addition to being investigated by Mr. Thompson, the Department of Labor and the Securities and Exchange Commission, the ULLICO scandal has also become the subject of a federal grand jury criminal investigation. By claiming attorney-client privilege, Mr. Georgine wants to prevent the report from being subpoenaed by the U.S. attorney for the District of Columbia.
Most of ULLICO's board members appear to be siding with Mr. Georgine, who headed the AFL-CIO's Building and Construction Trades Department from 1974 to 2000. As it happens, many of ULLICO's directors also have strong ties to the 15 craft organizations that comprise the building-trades department. In a thinly veiled threat, one official sympathetic to Mr. Georgine told Business Week earlier this month that the building-trades bosses may well conspire with allies such as Teamsters President James P. Hoffa to replace Mr. Sweeney as president of the AFL-CIO.
The ULLICO showdown between Mr. Georgine and Mr. Sweeney will apparently take place at the Dec. 2 board meeting. In this instance, Mr. Sweeney's preference for full disclosure is surely a more honorable option than Mr. Georgine's self-serving efforts to put a lid on the latest scandal to envelop the upper echelon of Big Labor.
Yet, it should not be forgotten that it was Mr. Sweeney who obliterated 40 years of AFL-CIO policy in 1997 by protecting AFL-CIO Secretary-Treasurer Richard Trumka, who repeatedly asserted his Fifth Amendment privilege against self-incrimination over his role in the Teamsters election scandal. Under the anti-corruption campaign conducted by the incorruptible George Meany in 1957, the AFL-CIO's Executive Council adopted a straightforward policy: If a union official "decides to invoke the Fifth Amendment for his personal protection and to avoid scrutiny … into alleged corruption on his part, he has no right to continue to hold office in his union." Mr. Sweeney gave Mr. Trumka an undeserved pass.
The late Mr. Meany and his successor, the equally incorruptible Lane Kirkland, were from a different era. If the Thompson report were to be released publicly and obtained by the U.S. attorney, chances are quite good that more than a few of the nation's most powerful labor bosses would be asserting their Fifth Amendment privilege.


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