Some officials of a union-owned insurance company probably violated state law by participating in improper insider stock deals that generated almost $10.7 million in profits for union leaders, investigators say.

The Ullico Inc. stock deals were structured to disproportionately favor directors and officers and apparently weren't properly authorized, according to investigators' findings, obtained Tuesday by The Associated Press. Also, shareholders and sometimes the board apparently were misled by "material misstatements and omissions."

"Most directors who approved the stock offer and repurchase programs had the opportunity to personally benefit from them, and many of them did," said the report by former Illinois governor James Thompson and his law firm, which Ullico's chairman, Robert Georgine, hired last year to investigate the stock trades.

Georgine later refused to disclose findings to shareholders and fought government lawsuits to obtain the report. Ullico's board on Friday voted to disclose the report this week after several directors conducted their own review and said they found no wrongdoing.

Georgine did not return a message left at his office after business hours. He said in a statement Friday that he was pleased that the second review found "no wrongdoing by any corporate officer or member of the board. We sought the advice of attorneys and other professionals at the time to ensure that would not happen."

Thompson's report said federal securities and criminal laws probably weren't violated, though state securities laws may have been.

It recommended the labor leaders return at least $5.6 million in profits, which the board so far has ignored. Five directors have resigned in protest, including AFL-CIO President John Sweeney.

The AFL-CIO had not received a copy of the report Tuesday night. Neither had Rep. John Boehner, R-Ohio, chairman of the House Education and Workforce Committee, who had requested it and other documents from Ullico and had not received a response.

"We will not be satisfied until Ullico has turned over all the documents the committee has requested," said committee spokesman Kevin Smith.

The report singled out Georgine, who, along with two other officers, obtained bank loans without board approval -- using Ullico as collateral -- to buy company stock in the special purchase program.

It questioned the legitimacy of that and other purchase deals in which Georgine made millions of dollars in profits. His total compensation was almost $5.4 million in 2000, up from $1.9 million in 1999.

The Labor Department has subpoenaed the 139-page report in its own investigation. Also investigating are the Justice Department, Congress and a federal grand jury.

But Thompson's report said some directors and officers violated their legal obligations to Ullico's union shareholders as required by Maryland state law. Ullico is incorporated in Maryland.

The law requires directors to act in good faith in the best interests of the company, using prudent care. Those requirements weren't satisfied, the report said.

"The stock offers lacked a clear business purpose and involved an excessive, and perhaps unauthorized, delegation of responsibilities," it said.

Georgine in 1999 invited Ullico directors to buy up to 4,000 shares of company stock at $54 a share just before they planned to upgrade the cost. The stock later reached $146 per share, then started falling. The board voted in 2000 to buy back shares at $146 per share with the knowledge that they would be revalued at $71.