UPI's Capital Comment for July 26, 2002

WASHINGTON, July 26 (UPI) -- Capital Comment -- Daily news notes, political rumors and important events that shape politics and public policy in Washington and the world from United Press International.

Union don'ts -- Republicans on Capitol Hill are taking a serious look at ULLICO, a privately held diversified financial services company largely owned by unions and their pension funds. Allegations of corruption and insider stock trading made against the company may present an opportunity for the GOP to blunt the political damage sustained following the Enron and WorldCom bankruptcies and the corporate confidence crisis.

In the May 15, "Labor Talk" column of The Labor Educator, a pro-labor, pro-reform online publication, writer and activist Harry Kelber explains the ULLICO issue: "A federal grand jury in Washington, D.C., is investigating the self-enrichment schemes approved by the (ULLICO) board, which enabled many of its members to gain personal profits totaling more than $6.5 million. A separate investigation is being conducted by the U.S. Labor Department to determine whether union leaders on the board, in their management roles, breached their fiduciary responsibilities to their union pension funds," Kelber writes.

"All but two of the 28 board directors are current or retired national union presidents and secretary-treasurers and include AFL CIO President John Sweeney and Executive Vice President Linda Chavez Thompson. (ULLICO CEO Bob) Georgine, who chose most of them as directors, was president of the AFL-CIO Building and Construction Trades Department for 26 years before his retirement in January 2000," Kelber explains.

In testimony before a U.S. House subcommittee, Ken Boehm, the president of the National Legal and Policy Center, a conservative group, called ULLICO "an early major investor in Global Crossing and (ULLICO's) directors used the telecom's volatile stock price history to personally enrich themselves at the expense of the union members and retirees whose pension funds own ULLICO."

Boehm went on to tell the subcommittee members that "The ULLICO board also jumped into deals with Pacific Capital Group, an investment firm owned by (Global Crossing chairman Gary) Winnick. Together with PCG, ULLICO invested in the high-flying Internet company, Value America, another non-union company which quickly went into bankruptcy. And ULLICO went in with PCG on Playa Vista, a troubled Los Angeles real estate deal plagued with environmental and regulatory problems... As revelations continue to grow... (the) reaction appears to be how closely the actions of the ULLICO board resemble what the union chiefs so often denounce as wrong with corporations." ULLICO declined a request for comment on the issue.

Republicans hope that by raising the visibility of the ULLICO scandal, they can force the Democrats to face the same kind of questions about their political relationship with organized labor and its leaders that the GOP has been forced to address because of Enron, WorldCom and the other troubled corporations. According to several studies, close to 100 percent of organized labor's political money goes to Democrats -- as opposed to business community dollars.

Partial birth politics -- The National Abortion Federation, the lobby organization for abortion providers in the United States and Canada, is coming out strongly against the passage of an anti-partial birth abortion measure in the House of Representatives. "We are extremely disappointed that House legislators motivated by election-year politics voted to pass a deceptive, intentionally vague and unconstitutional bill that would jeopardize the lives and health of American women and their families," NAF President Vicki Saporta said in a statement. He said, "The legislators who voted for H.R. 4965 have shirked their responsibility and ignored Supreme Court precedent in favor of playing election-year politics with the lives and health of women and their families."

The politics of division -- Washington is buzzing about a front-page story that appeared in Wednesday's New York Times, suggesting the same religious conservatives who strongly backed the nomination of Attorney General John Ashcroft are having second thoughts about him. In the piece, "Ashcroft's Terrorism Policies Dismay Some Conservatives," writer Neil A. Lewis quotes prominent conservatives Paul Weyrich of the Free Congress Foundation, Ken Connor of the Family Research Council and Grover G. Norquist, president of Americans for Tax Reform and a confident to several senior White House aides, as expressing concerns about proposals put forward by Ashcroft's Justice Department in the war against terrorism. Weyrich, he says, reports many of the conservative leaders who participate in a weekly luncheon he hosts voice unease about some of Ashcroft's initiatives.

Ashcroft opponents on the left suggest this means support for the attorney general among his strongest supporters is softening considerably -- and across the board. Critics of the attorney general on the right tell a different tale, that the unhappiness is specific to war against terrorism plans that can be found in a letter from mid-June to Rep. James Sensenbrenner, R-Wis., the chairman of the House Judiciary Committee. The letter, signed by close to 30 conservative leaders -- including Norquist, the Free Congress Foundation's Lisa Dean, the Family Research Council's Connie Mackey, and William J. Murray of the Religious Freedom Coalition -- praises Sensenbrenner for his initiative "to protect our constitutional rights and liberties regarding the recent decision of the attorney general to loosen the guidelines restricting the surveillance of religious and political organizations in the United States."

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