(The Washington Post posted the following article on its website on May 14.)
WASHINGTON — The newly elected board of Ullico, the union-owned insurance company, yesterday voted at a closed meeting to call on past management to return $5.6 million in profits from a stock deal that is under state and federal investigation, sources close to the board said.
A number of former board members have returned profits, or announced plans to do so, including Douglas J. McCarron, president of the United Brotherhood of Carpenters and Joiners, whose pretax profit was $418,880; Martin J. Maddaloni, president of the Plumbers Union, who made $234,680; and Morton Bahr, president of the Communications Workers, who made $35,202.
Robert A. Georgine, the ousted CEO, chairman and president of Ullico, has said he would give back $2 million in severance pay to replace his profits. A special internal investigation commissioned by Ullico found that Georgine made $837,760 from the stock deals, and received many other benefits from the company.
The Securities and Exchange Commission, Labor Department, the Maryland insurance commissioner and a federal grand jury have been looking into the sales of Ullico stock to officers and directors under an arrangement virtually guaranteeing a profit. In 2000 and 2001, the company repurchased stock under terms that allowed officers and directors to sell at high prices just before Ullico stock was to be devalued.