New York Times

 

 

Private Sector; The Fighting O'Sullivan

 

By STEVEN GREENHOUSE

May 18, 2003, Sunday

 

CALL it a sudden reversal. Two months ago, Terence M. O'Sullivan was part of a lonely minority on the board of Ullico, the union-owned insurer, and was badly outvoted when he sought to require the directors to return profits from a stock trading deal that is the subject of four investigations.

 

That deal has become an embarrassment to organized labor because 17 Ullico directors, most of them past and present union presidents, are being investigated for making more than $6 million in profits from what some investigators suggest was illegal insider trading.

 

Ten days ago, Mr. O'Sullivan, 48, was elected Ullico's chairman and chief executive after he played a major behind-the-scenes role in forging a new slate of directors that vows to restore integrity to the company.

 

As if that task is not tough enough, Mr. O'Sullivan, who is president of the 800,000-member Laborers' International Union of North America, must also seek to reverse Ullico's financial woes. The company, which provides insurance and pension services to millions of union members, lost $116 million last year. Mr. O'Sullivan said it needed a cash infusion of $50 million or more to go forward.

 

At first glance, he may not appear to be the right man for the job. For the last three years, he has headed the laborers' union, which not long ago was considered one of the nation's most corrupt labor organizations.

 

But Mr. O'Sullivan says his union has largely rid itself of corruption after an eight-year internal cleanup that removed 220 officials for wrongdoing, including more than 120 found to be members or associates of organized crime. He generally gets high marks from union members, government officials and other labor leaders for moving his Washington-based union away from its dark past.

 

“He's the greatest breath of fresh air to come along at the top level in the labor movement in a long time,” said John W. Wilhelm, the president of the Hotel Employees and Restaurant Employees International Union.

 

“Terry has simultaneously led a process of very dramatic change in one of the nation's most important unions and has taken a very strong leadership role in the labor movement as a whole.”

 

In late March, Mr. O'Sullivan and Mr. Wilhelm, members of a special committee of Ullico's board, were outvoted 6 to 2 when they sought to force other directors to return their profits from buying and selling Ullico stock.

 

Mr. O'Sullivan was so upset by that vote and by the reluctance of the chairman at the time, Robert A. Georgine, to clean up the mess that he began working with other union leaders to oust Mr. Georgine.

 

“What Terry did was unify a lot of diverse elements to bring everything together,” said Peter G. Aylward, president of Strategic Property Advisors, which controls more than 10 percent of Ullico's stock.

 

Once the new slate was elected, Mr. O'Sullivan became chairman, and at his first full board meeting last Tuesday, he pushed through a resolution that required all directors who profited in the stock trading to return their earnings within 30 days.

 

“We need to put these matters behind us so we can focus our time and attention on addressing the needs of the working men and women of organized labor,” Mr. O'Sullivan said.

 

When he talks about helping working men and women, it does not sound like hollow pandering. His father was member of the laborers, a union that often does the heaviest lifting and dirtiest work at construction sites. Mr. O'Sullivan said that thanks to the union, his father, Terence J. O'Sullivan, was able to give his family a middle-class life.

 

“I love this union,” he said. “Everything that I have, the clothing on my back, the shoes that I wear, the education that I got, was because this union provides for working men and women.”

 

Mr. O'Sullivan was born in San Francisco in 1955 and moved to Virginia in 1968, when his father was elected the laborers' secretary-treasurer. After graduating from American University, where he majored in business administration, he taught high school and coached baseball for three years. After starting his own computer-services company and running it for seven years, he returned to the union, running a training center in West Virginia that taught courses on construction and safety.

 

In 1994, he became assistant to the union's president, Arthur A. Coia, and then the union's chief of staff. Mr. Coia was forced to resign in 1999 before pleading guilty to federal fraud charges involving his purchase of three Ferraris. After Mr. O'Sullivan was vetted by federal and internal investigators, the union's board elected him to succeed Mr. Coia.

 

“Maybe there's some ghost in the closet about Terry,” said Ronald Nobili, a dissident under Mr. Coia and a business manager of a laborers' local in Bridgeport, Conn. “But I only have nice things to say about him. He's a motivator, and he's very well liked by everybody.”

 

In his free time, he watches his son, Brendan, 16, play baseball and his daughter, Caitlin, 11, play basketball. He runs up to four miles a day.

 

AT the office, Mr. O'Sullivan is focusing on restoring Ullico's integrity and financial health and making the laborers' union grow. He is meeting with investors, looking for someone to run the company day to day and overseeing Ullico's response to investigators.

 

As for helping the union grow, he has increased its spending on organizing to 26 percent of the union's budget -- to $11 million a year from $2 million. The union added 32,000 members last year, he said, as part of his strategy of increasing the union's share of the construction market in many cities.

 

“My war cry is: 'Increase our market share,' “ he said. “With significant market share, we increase our ability to negotiate the kinds of wages, benefits and working conditions that our members need, want and deserve.”


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