WASHINGTON, D.C.- Senate Governmental Affairs Committee Chairman Susan Collins (R-ME) today recognized the steps ULLICO Inc.-a union-owned financial services company-has taken to clean itself up following its recent stock scandal, but said that ULLICO’s new leaders still have a long way to go to restore investor confidence.
“Like Enron and WorldCom, the wrongdoings at ULLICO involve the same betrayal of trust, the same breach of duty, and the same profiteering by executives,” said Collins during a committee hearing that focused on questionable stock transactions by former ULLICO senior officials. “Senior ULLICO officials who profited from those transactions should return those funds to their rightful owners-the workers and families who own shares in the company.”
Following an extensive investigation by Gov. James Thompson, a new ULLICO board of directors agreed to implement reforms recommended by Thompson, with eight of the 27 board members voting against the recommendations. As part of the recommendations, the board requested that the senior officials who profited from the stock transactions but have not yet returned their profits to the company do so within the next 30 days. In his resignation letter, the company’s former CEO, Robert Georgine, requested that his severance package be used to cover those unreturned profits.
During today’s hearing, Collins asked ULLICO’s current chairman and CEO, Terence O’Sullivan, to provide her Committee with the names of the eight board members who voted against the reform recommendations at its most recent meeting. Collins is interested in finding out more about the relationship between Georgine and any of the members who reportedly opposed the recommendations.
“These reform efforts are promising developments, but it shouldn’t take the spotlight of a Senate investigation or grand jury subpoenas for a company to clean up its act,” said Collins. “Given that, until recently, one of the officials under investigation was on ULLICO’s payroll without the new management’s knowledge-and almost became eligible for a lucrative early retirement program-it’s clear that the reform effort will be an ongoing process.”
O’Sullivan’s testimony and Thompson’s PowerPoint presentation are available on the Committee Web site at http://govt-aff.senate.gov.