ULLILCO Kicks off Internal Inquiry
The board of the union-owned ULLICO tapped former Illinois governor James Thompson to lead the investigation of the company’s investment in Global Crossing Ltd., as well as into insider trading allegations, according to a BNA news report.
Although the union company had no official comment, BNA quoted an unnamed source as saying that the ULLICO board set no deadline for the Thompson probe. Thompson is also expected to operate without board restrictions, the BNA report said.
ULLICO, formerly known as Union Labor Life Insurance Company, which was founded in 1925 to provide affordable life insurance for workers, also invests and manages approximately $6 billion of largely building trade union pension fund assets.
Insider Trading Charges
Allegations that some members of the board personally profited from the sale of ULLICO stock as a result of insider trading surfaced last month during a federal grand jury investigation of Jake West, former president of the Bridge, Structural and Ornamental Iron Workers.
West, who was elected to ULLICO’s board in 1990, was indicted last year for allegedly embezzling union funds and filing false reports with the Labor Department.
At the same time, the value of ULLICO’s investment of union pension funds, which were heavily invested in Global Crossing, dropped when the price for Global Crossing shares plummeted.
In March, John Sweeney, president of the AFL-CIO and a member of ULLICO’s board, sent a letter to Robert Georgine, chairman of the company, urging a prompt review of the matter and proposed criteria for members of the review panel.
Georgine acknowledged Sweeney’s letter but said he would be taking a “somewhat different” approach. Georgine also said he expected ULLICO’s board to be vindicated in the investigation.
Global Crossing, a former high-flying telecommunications network builder, filed for bankruptcy in January. Its insolvency was the fourth largest public company bankruptcy in terms of assets ($22.4 billion), according to BankruptcyData.com.
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