:: rawblogXport ::

:: Tuesday, June 15, 2004 ::

SEN. COLLINS’ COMMITTEE RELEASES NEW STAFF REPORT ON ULLICO INSIDER STOCK DEALS Senate Committee on Governmental Affairs
4 ULLICO Directors Invoked Fifth Amendment Rights Instead of Answering Committee Questions
 
“This was an extraordinary case of insider dealing, corruption, and abuse of power. The ULLICO Board of Directors and management utterly failed in their responsibilities to their shareholders. The company betrayed the trust of the unions and pensioners that owned ULLICO, which makes it all the more unacceptable,” said Senator Collins, who chaired a Committee hearing on ULLICO in June 2003.

Key findings of the report include the following:

-- Although ULLICO was a corporation directed by leaders of organized labor, company management structured stock transactions largely for the benefit of insiders rather than the union members whose unions and pension funds were the company’s primary shareholders.

-- ULLICO spent almost $14 million on legal, consulting, and lobbying fees to deal with the multiple investigations spawned by the stock transactions. The company spent more than $2 million on the Thompson investigation. Then they spent twice as much, more than $4 million, on representation of individuals investigated by Thompson and to hire another firm, Sidley Austin Brown & Wood, to represent the company and to review and critique the Thompson Report. One lobbyist friend of Robert Georgine’s billed ULLICO for nearly 650 hours of work at $500 per hour, yet the company could not locate a single letter, memo, or note, other than billing records, reflecting the work performed. ULLICO’s new management has committed to investigate the services provided by Sidley and a number of other firms to see whether these professionals faithfully served the company’s interests, as opposed to its former management’s interests.

-- ULLICO’s Board appointed a Special Committee of directors to consider the Thompson Report. The Special Committee rejected the primary recommendation of the Thompson Report, that ULLICO seek a return of the ill-gotten gains from the stock transactions. Early drafts and notes from the Special Committee report suggest that some Special Committee members took a hostile view of the Thompson investigation.

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