Washington, DC (August 13, 2002) — A national employee rights advocate today filed federal charges at the National Labor Relations Board (NLRB) against the Union Labor Life Insurance Company (ULLICO) for secretly contributing to labor unions through their top officials at the expense of rank-and-file union members and compulsory fee payers.

With assets totaling over $4 billion today, ULLICO was established in 1925 and today invests funds from unions, labor pension funds, and individual stockholders. ULLICO, whose directors are almost exclusively presidents and other officials of major unions, is already the target of a federal grand jury investigation in Washington, DC, which is investigating possible criminal activity.

The federal unfair labor practice charges filed today by Stefan Gleason, Vice President of the National Right to Work Legal Defense Foundation, allege that ULLICO directors used their positions to allow themselves to sell their personal portfolios of ULLICO stock at a dramatically higher price than they were worth, but would not allow larger shareholders – such as individual union pension funds set up for the benefit of union members and compulsory fee payers– to sell their stock during the same period. These transactions were kept secret for nearly two years until they came to light in April.

“The self-dealing of ULLICO officials reveals the corruption that results from the numerous special privileges conferred upon union officials by federal law,” said Gleason. “While union officials have been talking about corporate corruption, at firms like Enron they have been similarly exploiting rank-and-file workers.”

During the late 1990’s, ULLICO bought significant holdings in Global Crossing which skyrocketed in value. In late 1999, before ULLICO’s stock price was to be increased, ULLICO President Robert Georgine sent a confidential letter to ULLICO board members – virtually all of whom are union presidents – encouraging them to purchase up to 4,000 shares of stock at $53.94. Georgine knew the stock’s value would increase significantly at the next revaluation. Then, in May 2000, ULLICO’s board raised the price of company stock to $146 per share, knowing that the new price was well above its true value since Global Crossing’s stock value had been plummeting dramatically throughout 2000.

In November 2000, ULLICO’s board authorized a stock repurchase at the inflated price of $146 a share, which permitted directors to sell back their personal holdings. But they permitted larger stockholders only to sell back a small portion of their ULLICO stock. By allowing themselves to liquidate their personal holdings at an inflated price, ULLICO’s board of directors made significant profits to the direct detriment of others who had invested in ULLICO. In Spring 2001, the value of ULLICO stock was revalued at $74 a share, and only then were union pensions, which are set up for employees, free to sell their ULLICO stock.

Public reports indicate that among those who personally profited from these secret transactions were Douglas McCarron, President of the United Brotherhood of Carpenters, Martin Maddaloni, President of the United Association of Plumbers and Pipefitters, and Morton Bahr, President of the Communications Workers of America.

The National Right to Work Legal Defense Foundation is a nonprofit, charitable organization providing free legal aid to employees whose human or civil rights have been violated by compulsory unionism abuses. The Foundation, which can be contacted toll-free at 1-800-336-3600, assists thousands of employees in more than 250 cases nationwide per year.