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Feds raid homes of UAW president and others in widening corruption investigation

The UAW contracts with GM, Ford and FCA will expire on September 14, 2015

The FBI on Wednesday upped its investigation into alleged corruption within the United Auto Workers with some dramatic raids on high-profile targets.

The government raided the Canton home of UAW President Gary Jones. It also raided the Corona, California home of retired President Dennis Williams, and the UAW’s Black Lake Conference Center in northern Michigan, among other targets.

The move signals a widening of the ongoing investigation into corruption within the UAW ranks, as well as accomplices within the business community, including the three Detroit automakers.

Eight former UAW officials and Fiat-Chrysler executives have pleaded guilty to misusing funds meant for a joint FCA-UAW worker training center over many years.

And just this month, several GM UAW officials were implicated by the governmentin an alleged bribery and kickback scheme involving union vendors.

The raids come as the UAW and all three Detroit automakers are in the midst of ongoing negotiations for a new, four-year contract. The current contracts expire in mid-September. UAW officials have always insisted the corruption did not impact collective bargaining or “buy off” union leaders, despite some government assertions to the contrary.

Harley Shaiken, a professor labor studies at the University of California-Berkeley, called raids on the top UAW executives “unprecedented.” He says the raids “create a feeling of distrust and raises a lot of speculation,” and questions whether they needed to happen in the midst of contract talks.

“By having these raids right now, you create a sense of instability in critical national contract negotiations,” Shaiken said. “Even if that affects a small number of workers, it could be decisive in a close contract vote.”

“The federal government tends to be silent, [and] the problem is silence breeds speculation. I think it’s important to hold the speculation and see what evidence is ultimately turned up, and what explanations there may be for that evidence.”

The UAW also questioned the timing in a statement released Wednesday.

The union says the raids were unnecessary as it has always cooperated with government investigators in the corruption probe, and that the resulting “media leaks, false assumptions, and political grandstanding” only serve to benefit “profit-laden automakers.”

Marick Masters, a business professor at Wayne State University, says the timing may be significant in another way: coming on the heels of money laundering and wire fraud charges against former GM UAW administrator Michael Grimes, which also implicate two other unnamed UAW officials, it may signal the defendants in that case “might have made revelations to the prosecutors, and that that might have been sufficient for them to get a warrant to conduct this kind of raid.”

Masters agrees that this “casts a cloud” over UAW leadership at a critical time, and “perhaps raises doubts among the membership and the rank and file about the integrity of the leadership.” He suggests the UAW convene its executive board to discuss the possibility of that leadership temporarily stepping down, as well as possibly bringing in an independent review board to root out potential corruption and take corrective measures.

UAW members “have to be supremely confident in the integrity and reliability of the leadership,” Masters said. “This is a delicate situation, and why I think it’s absolutely necessary they take some bold steps to at least assure the membership that they’re doing everything they possibly can to get out ahead of this story, make a full disclosure, and invite the kind of microscopic public scrutiny which is necessary.”

Sarah Cwiek joined Michigan Public in October 2009. As our Detroit reporter, she is helping us expand our coverage of the economy, politics, and culture in and around the city of Detroit.
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