Washington, DC (October 31, 2002) — Acting in response to legal pressure as well as embarrassing media coverage, Douglas McCarron, President of the Carpenters’ and Joiners of America union, announced he will return nearly $300,000 in personal profits he made through a notorious insider trading deal while serving as a director of a massive union-owned insurance company, increasingly known as “Big Labor’s Enron.”
While using his position on the $6 billion Union Labor Life Insurance Company (ULLICO) board to line his own pockets, McCarron also received a $110,000 raise from the Carpenters union, increasing his annual compensation to $356,000 in 2001, according to government disclosure documents obtained by the National Right to Work Foundation.
Mr. McCarron still faces possible indictment from a federal grand jury convened to investigate insider trading by union officials on the ULLICO board. Meanwhile, the National Labor Relations Board is investigating charges filed by attorneys with the National Right to Work Legal Defense Foundation against ULLICO, whose board is composed primarily of former and current union officials.
In a failed effort to win backing from top officials of the Carpenters and Teamsters unions, the White House political office has been pursuing a strategy to make policy concessions that have increased compulsory unionism power exercised by union officials over rank-and-file workers. Yet despite the White House’s efforts, these two unions have continued to give virtually all of their soft money contributions to Democrat party committees, and the two unions have given 95 percent of their PAC contributions in closely contested House and Senate races to Democrat candidates.
“The President of the United States should not be cozying up to union officials like Doug McCarron who are knee-deep in allegations of corruption,” said Stefan Gleason, Vice President of the National Right to Work Foundation. “This is another example of the corruption and arrogance that results from the numerous special privileges conferred upon union officials by federal law, and those involved in the ULLICO scandal should be prosecuted to the fullest extent of the law.”
Despite McCarron’s public relations stunt to pay back his personal ULLICO profits, the legal inquiries continue into whether ULLICO directors, including McCarron, violated the law by writing special rules which allowed themselves to sell their personal portfolios of ULLICO stock at an inflated price, while at the same time preventing larger shareholders, including union pension funds set up for the benefit of workers, from selling their larger holdings. These transactions were concealed for nearly two years until they came to light in April. Under the special rules, McCarron sold 3,000 shares at a profit of $92 a share.
In addition to McCarron, public reports indicate that other union officials, including Martin Maddaloni, President of the United Association of Plumbers and Pipefitters, and Morton Bahr, President of the Communications Workers of America, personally profited from these secret transactions.
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.