Ullico Directors Claim: Actions Perhaps Unethical, But Not Illegal

April 7, 2003

A report prepared by the law firm of Winston & Strawn and former Illinois Gov. James Thompson says directors of labor-owned insurer Ullico Inc. personally benefited from the stock deals and repurchase programs.

Winston & Strawn was hired last year by Ullico Chairman Robert Georgine to conduct the investigation. He later fought lawsuits filed by the government to obtain the independent third-party report.
A statement released by Ullico said that Gov. Thompson was not privy to the applicable law on the breach of fiduciary duty, and said that all sources agreed no one at Ullico violated the law.

The Thompson report actually speculated that while federal laws probaly were not broken, state securities laws may have been. Thompson’s report also recommended that Ullico directors return at least $5.6 million in profits, and five directors have resigned in protest, among them John Sweeney, president of the powerful AFL-CIO.

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