BUSINESS NEWS
Federal corruption probe involves UAW’s president, ex-president
Eric D. Lawrence and Tresa Baldas
Detroit Free Press
Published 11:55 AM EDT Sep 13, 2019
The man who leads the union representing autoworkers at Ford, General Motors and Fiat Chrysler Automobiles is “UAW Official A” in the latest complaint filed in the corruption probe into union activities.
A source with knowledge of the case told the USA TODAY Network’s Detroit Free Press that United Auto Workers President Gary Jones was one of the unnamed union officials in the criminal complaint charging UAW Region 5 Director Vance Pearson with wrongdoing. Dennis Williams, Jones’ predecessor, is “UAW Official B,” the source said.
Pearson, who succeeded Jones as head of a 17-state region stretching from Missouri to California, was arrested Thursday in Missouri and faces six charges ranging from embezzlement of union money to money laundering.
Agents seized $30,000 from UAW Official A’s home during nationwide raids last month of union-affiliated individuals, according to the Pearson complaint. A neighbor told the Free Press he saw agents taking “wads” of cash from Jones’ garage in Canton, a Detroit suburb.
FBI raid: Investigators raid home of UAW presidents as corruption investigation continues
The Pearson complaint unsealed Thursday in U.S. District Court in Detroit details “an embezzlement scheme whereby UAW officials hid their personal use of UAW money without any legitimate union business purpose.” The complaint refers to conferences in California and Missouri and alleges that UAW officials misspent union money for swanky lodging, expensive cigars and rounds of golf and golf equipment.
The corruption probe initially focused on the alleged misuse of worker training funds by union and Fiat Chrysler officials, but it spread to include senior union officials accused of improperly spending money on themselves, the source told the Free Press. Nine people have been convicted in a series of cases that implicated senior UAW leaders and ensnared Fiat Chrysler and General Motors.
The charges and allegations hang over UAW contract talks with the Detroit Three. Contracts expire this weekend, and the UAW is trying to assure its members that their interests are a top priority.
The Pearson complaint says “off-site condominiums and villas with private pools and hot tubs in gated communities” were secured for Pearson, Officials A and B and other unnamed “high-ranking union officials.” In one case, a three-day union conference in 2014 led to a 31-day stay for Officials A and B, the complaint says.
The complaint refer to tens of thousands of dollars spent at fancy restaurants, as well as “expenses that on their face are inconsistent with the legitimate conduct of union business.”
One example included an almost $900 purchase at a Palm Springs, California, golf resort for hats, gloves, a golf bag, jackets, socks and “fashion shorts” with an invoice appearing “to bear the signature” of UAW Official A.
The Detroit News first identified Jones and Williams as the unnamed officials.
The UAW released a statement related to the Pearson charges pushing back against the allegations.
“While these allegations are very concerning, we strongly believe that the government has misconstrued any number of facts and emphasize that these are merely allegations, not proof of wrongdoing. Regardless, we will not let this distract us from the critical negotiations underway with GM to gain better wages and benefits for the more than 400,000 members of our union,” the statement said.
GM, which is negotiating with the union on what UAW hopes will be a template contact for Ford and Fiat Chrysler, weighed in Thursday.
“GM is outraged and deeply concerned by the conduct of union officials as uncovered by the government’s investigation and the expanding charges revealed today,” the automaker said in a statement. “These serious allegations represent a stunning abuse of power and trust. There is no excuse for union officials to enrich themselves at the expense of the union membership they represent.”
Follow Detroit Free Press reporter Eric D. Lawrence on Twitter: @_ericdlawrence.
