Chao appeared Feb. 26 before a closed session of the 53-member council at its annual winter meeting last month in Hollywood, Fla. She later told reporters that the discussions were "frank and productive," touching on a number of issues. She said she prides herself on keeping the door open to labor union concerns. "We want to work with those who want to work with us," she said. But AFL-CIO President John J. Sweeney saw it differently. Sweeney called Chao's remarks "insulting" and told reporters, "I've never seen a Secretary of Labor so anti-labor."

Chao's remarks served to "rally the [union presidents] and forced them to unify against Bush," says one observer. Sweeney vowed to fight back with year-round efforts to place control of the White House and both chambers of Congress in the hands of Democrats.

"It is the top priority of the labor political program in 2003 and 2004 to take the country forward again by removing our out-of-touch leaders," Sweeney said. The AFL-CIO announced the launch of its largest mobilization and grassroots effort, aiming for a year-long program rather than concentrating on the months before a general election.

The flap with Chao pushed aside most debate over labor's own controversy: the ongoing investigation into insider stock transactions by board members of Ullico Inc., the labor insurance and investment company that counts several building trades presidents as members. Many executive council members are angry with the Ullico board's decision not to release an independent report on the stock trades that put big financial gains into the pockets of several union leaders (ENR 2/3 p. 13).

But the council decided to wait until a special committee of "disinterested" Ullico board members releases its findings, expected in the next few weeks. In the meantime, Robert A. Georgine, Ullico president and former president of the AFL-CIO Building and Construction Trades Dept. (BCTD), is scheduled to appear March 10 in District Court in Washington, D.C., to explain why he has not responded to a U.S. Labor Dept. subpoena requesting documents relating to the stock transactions, including the independent report.

Separately, the council also agreed to grant additional time for discussions with the carpenters' union about reaffiliating with the labor federation before enforcing the AFL-CIO constitution. Carpenters' President Douglas J. McCarron withdrew the union from the AFL-CIO in March 2001, a move that cost the union its affiliation with BCTD. The carpenters and building trades reached agreement in December for the union to reaffiliate, but the AFL-CIO constitution prohibits a union from membership with an affiliated department if it is not a member of the federation.