Tuesday, May 31, 2005

Andersen, Sweeney, and Global Crossings...

I saw two stories today that recalled my attention to what may be a much larger story. The first is the Supreme Court's ruling overturning the conviction of accounting corporation Arthur Andersen for destroying Enron-related documents (hat tip: Huffington Post). The other story is the New York Times' report of calls for AFL-CIO President John J. Sweeney to resign amidst his bid for re-election as head of that labor union.

Take Arthur Andersen and AFL-CIO President John Sweeney, stir in a healthy portion of telecommunications giant Global Crossings, pan-fry for a couple of years and the result is a flaming dish known as the ULLICO Stock Scandal.

In this little number, Sweeney and his fellow labor leaders from other unions form a pension investment corporation called the Union Labor Life Insurance Investment Company (ULLICO). A fews years before Sweeney was protesting against gutting Social Security by turning it over to risky investment companies, he was a member of the board at ULLICO turning a $7.6 million investment into $335 million. Unfortunately, the rank and file due-paying members of the unions were not as fortunate as the executives at ULLICO. Mr. Sweeney and his peers miraculously bailed out of the Global Crossings investments before their retirements and savings shrank to nothing in that company's precipitous descent to worthlessness.


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