UAW turmoil: Strike looms as top union leaders swept up in a criminal probe

  • September 13, 2019

Three more United Auto Workers leaders were implicated in a federal embezzlement probe today, plunging the union into chaos as a contract deadline approaches.

The Detroit News reported Friday that UAW President Gary Jones and former president Dennis Williams are two unnamed officials accused in an indictment of helping orchestrate years-long embezzlement of training center funds. Separately, authorities arrested a member of the union’s executive board, Vance Pearson, on money laundering and fraud charges in connection with the same scheme.

The news came as the UAW raced toward a last-minute deal with General Motors, Ford and Fiat Chrysler before contracts with these automakers expire Saturday night. Union leaders may call a strike if a tentative agreement is not reached by midnight.

UAW spokesperson Brian Rothenberg declined to comment on the reported charges against Jones and Williams but said the union stood by Pearson.

“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,” Rothenberg said in a statement. “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 UAW seeks pay raises for workers to guard against a possible economic downturn, according to The Associated Press, though the company instead wants to pay lump sums tied to earnings. The union also wants new products to restart four idled GM factories in Michigan, Lordstown, Ohio and greater Baltimore.

The training-center scandal has sent eight people to prison so far, including high-level UAW officials accused of accepting bribes aimed at making them more pliable in bargaining. Former Vice President Norwood Jewell was sentenced to 15 months behind bars in August for using training-center funds to pay for 29 rounds of golf in Palm Springs, Calif., rent a three-bedroom villa with a private pool and hot tub, and purchase $2,000 of tickets to Disney World and Universal Studios theme parks, among other spoils.

The FBI last month raided Jones’ home in Canton, Mich. and Williams’ home in California. Agents also reportedly searched the union‘s 1,000-acre retreat in Northern Michigan, a regional office in Missouri where Jones worked before becoming president, and the Wisconsin home of Williams’ former top aide.

Agents reportedly seized more than $30,000 in cash from Jones’ house and a set of Titleist golf clubs purchased with union money. Jones’ neighbor told the Detroit News he observed agents counting “wads” of cash on the garage floor and searching a safe on the day of the raid.

“They were on the floor counting cash, going through the wads,“ said the neighbor, Kevin Telepo. “They pulled out a five-foot tube that was a UAW banner. They were really examining the golf clubs.“

Pearson is the director of a UAW regional office in Missouri where Jones worked before becoming president. Prosecutors say he and other union officials spent more than $100,000 on golf clubs and accessories, in addition to $60,000 on cigars, cutters, and lighters between over a four-year period. Pearson allegedly filed false reports with the Labor Department to conceal the expenses.