FBI raids UAW president’s home as corruption investigation continues

FBI and IRS agents raided the home of United Auto Workers President Gary Jones in metro Detroit early Wednesday as part of a nationwide sweep of sites tied to the union. 

Agents also raided the California home of Dennis Williams, who preceded Jones as the UAW’s president; the union’s northern Michigan conference center; and additional UAW locations in Wisconsin and Missouri.

The raids were a major step as federal officials ramped up their corruption investigation of the autoworkers union — which is in the midst of contract negotiations with Detroit automakers.

As many as a dozen agents collected evidence from Jones’ home Canton, Michigan, and would remain there “as long as it takes,” Special Agent Mara Schneider said from the site late in the morning. The search lasted six hours.

She declined to say whether Jones, 62, was home when agents arrived or during the raid. The agents conducted what is called a “knock and announce” protocol.

One neighbor, 47-year-old J. Kevin Telepo, became so intrigued that he grabbed a pair of binoculars, sat in his dining room and zoomed in on Jones’ garage. That’s where he saw FBI agents combing through all sorts of stuff: cash, a golf bag and what appeared to be a safe, he said.

“I actually saw them going through bundles of cash,” said Telepo.

The raids presumably are linked to an ongoing scandal that’s been centered on misspent money intended for use by the union’s joint training center with Fiat Chrysler Automobiles, but has expanded in recent weeks to include vendor contracts and to touch officials tied to the union’s General Motors training center. 

The scheme redirected millions of dollars meant for worker training to goodies for former union and company officials. Nine people have been charged so far. 

Besides Jones’ home, agents were at the union’s Black Lake Conference Center, a 1,000-acre resort in northern Lower Michigan that includes a golf course, where the UAW is building an opulent cottage for Williams as a perk of his retirement last year.

The center near Onaway, subsidized by interest from the union’s strike fund, has bled tens of millions of dollars over the years.

The Free Press confirmed that Williams’ home in Corona, California, also was raided. Williams’ name surfaced in the scandal last year. 

UAW statement

Detroit automakers, whose contract with the UAW expires Sept. 14, declined to comment on the raids. On the broader corruption investigation, GM has said it is cooperating with authorities. Fiat Chrysler has said it is “a victim of illegal conduct by certain rogue individuals.”

The UAW issued a statement Wednesday saying that the union and Jones “have always fully cooperated with the government investigators in this matter. As the leader of the UAW, President Jones is determined to uncover and address any and all wrongdoing, wherever it might lead. There was absolutely no need for search warrants to be used by the government today — the UAW has voluntarily responded to every request the government has made throughout the course of its investigation, produced literally hundreds of thousands of documents and other materials to the government, and most importantly, when wrongdoing has been discovered, we have taken strong action to address it. The UAW will continue to cooperate with the government in its investigation, as we have been doing throughout. 

“Trust in UAW leadership is never more important than during the bargaining process, when profit-laden auto companies stand to benefit from media leaks, false assumptions, and political grandstanding,” the statement continued. “The sole focus of President Jones and his team will be winning at the bargaining table for our members.”

A UAW national leader who asked to not be identified because he was not authorized to speak publicly said the raid on Jones’ house could have a negative impact on talks. Some rank-and-file members already had expressed a lack of trust in union leadership in light of the scandal, he said.

This is likely to create more distrust among those members, the person said.

But he added that results of a strike authorization vote will indicate that the membership trusts negotiators to green-light a work stoppage if necessary. The results of that vote are expected Thursday or Friday, but it is usually procedural in nature and typically members authorize it.

Suspicions about timing

Plant workers were surprised and dismayed by the news.

UAW member Sean Crawford, who works at GM’s Flint Assembly plant, said the news will have a “really negative impact” on bargaining.

“Call me cynical but I feel the Trump administration willfully timed this to coincide with our negotiations so that the union would lose faith in the leadership,” said Crawford. “We’re getting ready to go into one of the biggest negotiations of our lifetime and we’re possibly going to lose faith in our union.”

Crawford said the union leadership is to blame and should take responsibility for its actions in the corruption scandal.

“All these people should step down and allow a democratic electoral process to take place, an election of leadership that is run by the members,” said Crawford. “The union has to be blamed for this too, and it’s disgusting. It makes us all look bad.”

Crawford said the corruption happened because leaders aren’t accountable to the membership. The UAW international executive board is elected now by delegates who represent locals at the UAW convention.

Obtaining a search warrant

Using a search warrant rather than getting a subpoena required prosecutors to go to a judge to show probable cause that a crime has taken place and that there was evidence of the crime at the location to be searched, said Peter Henning, a former federal prosecutor who teaches law at Wayne State University.

“It’s a way for prosecutors to ensure they get the materials they want. A search warrant is an escalation of the investigation. It indicates prosecutors are concerned there is evidence out there that they want to get,” he said.

“I would expect they may be looking at electronic documents,” Henning said. “You have to have a warrant to search a phone or a computer. If the warrant authorizes electronics, they can seize a computer and create a mirror image of the computer hard drive. They can seize phones. And people put things in text messages that maybe they shouldn’t. They’ll get emails … They are doing a pretty broad sweep.”

The raids Wednesday came on the same day as an arraignment in federal court for Michael Grimes, a former UAW administrative assistant who retired last year from the UAW-GM Center for Human Resources. Grimes was charged earlier this month in a federal criminal indictment alleging he conspired with unnamed union officials to accept hundreds of thousands of dollars in bribes and kickbacks. The schemes were allegedly connected to contracts for watches, backpacks and jackets worth millions of dollars.

Grimes entered a not guilty plea and the judge set unsecured bond at $10,000. 

The filing against Grimes cited unnamed union officials as being linked to the corruption scandal. The Detroit News has reported that those officials are Joe Ashton, a former UAW vice president who resigned from the GM board in 2017 as questions swirled about the federal investigation into training center corruption, and his former aide Jeff Pietrzyk.

Grimes was charged just over a week after former UAW Vice President Norwood Jewell was sentenced to 15 months for his role in the scheme.

Jewell’s plea agreement noted that a “culture of corruption” predated his start in the UAW Fiat Chrysler department in June 2014, led by former Fiat Chrysler Vice President Alphons Iacobelli and Jewell’s predecessor, the late General Holiefield. 

Among others who have pleaded guilty in the case are Monica Morgan, who is Hollifield’s widow; Jerome Durden, a financial analyst at Fiat Chrysler who allegedly helped conceal the fraud by cooking the books; Nancy Johnson, the one-time senior official in the UAW Chrysler Department, who spent thousands of dollars meant for autoworker training on personal items; and Virdell King, 65, of Detroit, who was accused of — among other things — buying designer shoes, clothing, jewelry and luggage using credit cards that were issued through the UAW-Chrysler National Training Center. 

Follow Detroit Free Press reporter Phoebe Wall Howard on Twitter @phoebesaid.