ULLICO Inc., the insurer owned by union pension funds, has reached a $13-million settlement with Robert A. Georgine, its former CEO and longtime president of the AFL-CIO Building and Construction Trades Dept.
The insurer forced out Georgine in 2003 after a scandal erupted over an insider stock-trading scheme involving Georgine and other directors. An independent investigator in 2003 found that Georgine had breached his fiduciary duties to ULLICO by self-dealing in ULLICO stock and recommended the company get the profits back. ULLICO then sued Georgine and the directors. Several building trades presidents were forced to pay back their profits.
In a Nov. 10 letter to stockholders, ULLICO Chairman Terence M. OSullivan says ULLICO will receive cash and tax benefits from the Georgine settlement in excess of $13 million, including $10 million in compensation in bank trusts and $2.6 million in stock.
"The level of executive compensation at ULLICO was offensive to the labor movement," says OSullivans counsel, Damon Silvers. He claims board members were kept in the dark about some compensation.
Georgine gets to keep his ULLICO pension, which is protected by federal law from litigation, $8.1 million in deferred compensation paid to his retirement plan and a rich insurance policy.
In a statement, Georgines family says all stock programs were either prepared or approved by accountants, lawyers and directors and that Georgine had helped ULLICO turn a profit. They add: "Mr. Georgine devoted his entire professional life to the advancement of the interests of the labor movement and the well-being" of workers.