New York Times
By STEVEN GREENHOUSE
April 24, 2003
Robert A. Georgine, chairman and chief executive of Ullico, the embattled union-owned insurer, told the company's board yesterday that he would step aside as chairman in the face of a threatened proxy fight by his critics, company officials said.
But company officials said he planned to remain as Ullico's chief executive and president, even though a group of his critics expressed optimism that they would be able to push him out of those positions after an election for directors on May 8.
Critics of Mr. Georgine said a new 15-person slate, representing more than half of the board and including some of these critics, hoped to replace Mr. Georgine with a financial professional to run a financially troubled company.
Mr. Georgine, a longtime building trades union official, and 17 other Ullico directors have come under fire and are under federal investigation because they made more than $6 million selling the company's stock. In an investigative report that was disclosed last month, an outside counsel, James R. Thompson, the former governor of Illinois, recommended that the directors repay that money to the company, having concluded that they made profits at the expense of Ullico's shareholders.
Mr. Thompson's report singled out Mr. Georgine for the harshest criticism, noting that he made a separate $6 million in profits selling Ullico stock to the company at a high price, shortly before Ullico's board set a lower price. Mr. Georgine has insisted that he did nothing wrong.
Mr. Georgine's critics said his decision to leave the chairman's post along with their efforts to select a new chief executive would turn a page on a scandal that has badly embarrassed organized labor.
“It was important to put Ullico's difficulties behind us and show that labor is committed to high standards of corporate accountability,” said John J. Sweeney, the A.F.L.-C.I.O.'s president, who quit the company's board out of anger that it was not acting aggressively to resolve the stock scandal. “We are confident that this agreement will lay the foundation for a bright future for Ullico and allow it to continue its long tradition of service to working families.”
Officials from several unions, led by electrical workers, carpenters and laborers, were threatening a proxy fight to topple Mr. Georgine and unseat his board supporters.
Ullico officials said Mr. Georgine and his supporters and critics had agreed on the unified slate of 15 that would include Martin Maddaloni, the plumbers' president; Terrence O'Sullivan, the laborers' president; Alexis Herman, former labor secretary; Richard Trumka, the A.F.L.-C.I.O. secretary-treasurer; Richard Ravitch, the New York builder; and Abner Mikva, the former White House counsel and federal judge.
Mr. Maddaloni said yesterday he would return his profits from his selling of Ullico stock. He made $418,800 in pretax profits, according to Mr. Thompson. The presidents of the carpenters' and communications workers' unions have already returned their profits.
Copyright 2003 The New York Times Company