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Major US union goes on warpath

Enron Corp directors should be removed from the boards of nearly two dozen other companies, including Motorola Inc, Lockheed Martin Corp, and Qualcomm Inc, the AFL-CIO labor union federation said.

"In our opinion, directors who permitted the accounting deception that led to the collapse of a company worth over US$70 billion are not suited to serve on other boards," Richard Trumka, secretary-treasurer of the AFL-CIO, which represents about 13 million union members, said in a written statement.

AFL-CIO-affiliated union pension plans held 3.1 million shares of Enron stock when the company went bankrupt, causing those pension plans about US$250 million in losses, union officials said.

Enron filed the largest US bankruptcy on Dec. 2 after admitting it overstated profits by US$586 million since 1997. Ten congressional committees, the US Department of Justice and the Securities and Exchange Commission are investigating the role played by executives, analysts and auditor Arthur Andersen LLP in the collapse.

The AFL-CIO sent letters to 21 companies this week asking them to either remove or not re-nominate Enron directors on their boards. In a letter to Motorola, the union federation asked the company not to re-nominate Ronnie Chan, an Enron director, to another term on the board of directors. A Motorola spokeswoman wasn't immediately available for comment.

"Unless Mr. Chan can show he personally took meaningful steps to protect Enron investors," the AFL-CIO's letter said, "he should not serve on the board of Motorola or any other public company."

The other 18 companies targeted by the AFL-CIO because Enron directors serve on their boards are Westport Resources Corp; Comdisco Inc; Owens Corning; Han Lung Group Ltd; Standard Chartered Plc; Group 1 Automotive Inc; AMVESCAP PLC/Invesco Funds Group; California Water Service Group; NewPower Holdings, Inc; ImClone Systems Inc; Alliance Capital Management LP; Bristol & West Plc; Vosper Thornycroft Holdings Plc; Michael Page International Plc; Rothschilds Continuation Holdings Group; NATCO Group, Inc; CCC Information Services Group, Inc and DynCorp Inc.

The Enron directors named by the federation are Chan, chairman of Grand Hotel Holdings Ltd and Hang Lung Group Ltd; Robert Belfer, chairman and CEO of Westport Resources Corp; Norman Blake Jr., chairman and CEO of Comdisco Inc; John Duncan, former president of Gulf & Western Industries Inc; Wendy Gramm, wife of US Senator Phil Gramm; Robert Jaedicke, an accounting professor at Stanford University; Ken Lay, former Enron chairman; John Mendelsohn, president of the MD Anderson Cancer Center; John Wakeham, chairman of Vosper Thornycroft Holdings; Herbert Winokur, chairman of Capricorn Holdings LLC and Frank Savage, former chairman of Alliance Capital Management Inc. Savage, who is on the board of Qualcomm, is also on the board of Bloomberg LP, parent of Bloomberg News.

"Frank has been on our board since 1996," said Qualcomm spokesperson Julie Cunningham.

"We see no reason to take any action."
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