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UAW, U.S. DOJ, settle corruption investigation with consent agreement


Five years after the FBI began investigating corruption in the leadership ranks of the United Auto Workers union, the U.S. Justice Department and the union have agreed to a consent order that places the union under the oversight of an independent monitor.

The investigation began with charges against a former Fiat Chrysler official, and spread from there, ending with two former UAW presidents, Gary Jones and Dennis Williams, pleading guilty to embezzlement, among other crimes.

The monitor will be in place for six years, at least, unless he or she determines the oversight is no longer necessary sooner than that. The monitor will oversee most functions of the union except its contract negotiations with employers such as Detroit automakers; that is, unless there is evidence of corruption or fraud in those negotiations.

U.S. Attorney Matthew Schneider announced the settlement on Monday, and said the agreement includes allowing the rank and file members of the union to decide how future leaders are elected, whether through the current delegate system, or a "one member, one vote," system of direct election.

"This will not be a system imposed upon the UAW by the United States government," said Schneider. "Instead, the members, the workers, will decide for themselves how to be governed."

Schneider said the government did not pursue a RICO Act prosecution of the union because the corruption is a matter of individuals engaging in graft and other bad acts, but not the wholesale control of the union by a criminal enterprise such as a mob.

The UAW will also pay $1.5 million to the Internal Revenue Service, and it has already paid more than $15 million to its training centers for improper chargebacks. The union will also pay the costs associated with reforms required by the independent monitor, but Schneider said no other fines will be assessed because those would have to come from union dues paid by the union's blameless rank and file members.

Current UAW President Rory Gamble said he fully supports the appointment of a monitor, which will be chosen by the government from a slate of candidates suggested by the union, and the union will offer "education and information," to represent its position in the matter of direct elections.  

No exact timeline for the members to vote on the issue of how leaders are chosen was put forward, other than it's expected soon.

Gamble said those who used their positions for personal enrichment violated the trust of the membership, as well as his.

"I have a sworn oath and dedication and respect for my union and they betrayed that," he said.

Schneider said Gamble himself is not under investigation for any crime. Gamble then took The Detroit News to task, saying the newspaper had made baseless allegations against him, allegations that the paper repeated on Monday

"At least two members of the UAW’s governing board have been linked to the ongoing investigation, including union President Rory Gamble and Vice President Cindy Estrada," the story by Robert Snell alleged.

The list of those implicated in the scandal, from the U.S. Department of Justice website:

The fifteen individuals convicted of fraud and corruption crimes include former UAW Vice President Joseph Ashton (30 months in prison) former FCA Vice President for Employee Relations Alphons Iacobelli (66 months in prison), former FCA Financial Analyst Jerome Durden (15 months in prison), former Director of FCA’s Employee Relations Department Michael Brown (12 months in prison), former senior UAW officials, Virdell King (60 days in prison), Keith Mickens (12 months in prison), Nancy A. Johnson, (12 months in prison), Monica Morgan, the widow of UAW Vice President General Holiefield (18 months in prison), former UAW Vice President Norwood Jewell (15 months in prison), and former senior UAW official Michael Grimes (28 months). In addition, the following UAW officials have pleaded guilty and are awaiting sentencing: former UAW President Gary Jones, former senior UAW official Jeffrey Pietrzyk, former UAW Region 5 Director and UAW Board member Vance Pearson, former UAW Midwest CAP President Edward “Nick” Robinson, and former UAW President Dennis Williams.

Tracy Samilton covers energy and transportation, including the auto industry and the business response to climate change for Michigan Public. She began her career at Michigan Public as an intern, where she was promptly “bitten by the radio bug,” and never recovered.
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