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Howes: As FBI probe follows the money, former UAW VP resigns from GM board

Detroit's Renaissance Center
Michigan Municipal League
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Just weeks after being linked with a federal grand jury probe into auto industry corruption, a retired UAW vice president has resigned his seat on the board of General Motors.

Detroit News business columnist Daniel Howes co-reported this story with his colleague Robert Snell. Howes joined Stateside today to share his updates.


Listen above for the full conversation, or catch highlights below.


On the investigation


"What they're looking at is a lot of these vice presidents have their own foundations that typically are created once they become vice presidents. They actually call them charities but they're typically, as I understand it, a 501c3 and people make contributions. They can come to a golf outing one of these vice presidents has, and give them an envelope with $100 in it that is supposed to go to his charity. Well, the question is, is it going to the charity or is going to some other means which is not charitable? Is it going in someone's pocket? And I think they're trying to drill down and found out how systemic this thing is, if it is systemic at all.”


On what's being found


What we're looking at here is a potential where a number of the vice presidents, both sitting and former, are implicated in some way, shape, or form in this thing, and some of this stuff may be very, very small potatoes. I think when some people read the details of some of this, it's kind of unbelievable about how small some of this stuff is, but that's not the point. The point is that these monies are for either charitable purposes, or joint training funds are set aside by the companies — these are not dues money from the membership, these are monies that are funded by the auto makers that have been negotiated at contract time, and instead of using it for joint training of employees and union members, they're using them to buy various goods and lavish experiences and things like that.”


On precedent

Walter Reuther, [the UAW's] legendary president, warned after WWII when they began to get pensions and healthcare coverage and they started to win those at the bargaining table, he warned, he said, 'Listen, do not allow those monies to be managed by union people. It's too tempting. They're not expert at it, and those monies should be managed by professionals whose job it is to do that and to be fiduciaries of that money.' Depending on where this thing goes, I think that may be the situation where Reuther kind of smiles down and goes, 'I told you.'”

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