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UAW Corruption Scandal Widens With Raids On Homes And Latest Arrest

AILSA CHANG, HOST:

New charges today in a four-year long FBI corruption investigation of the United Autoworkers Union. Another high-ranking union official was arrested today. He's charged with conspiring to embezzle hundreds of thousands of dollars from the union. This comes just as the union is sitting down at the bargaining table with General Motors. Michigan Radio's Tracy Samilton reports that the focus on possible union corruption could increase the chance of a strike this year.

TRACY SAMILTON, BYLINE: The first sign of trouble came four years ago, when a former Fiat Chrysler financial analyst admitted he'd created false tax returns for UAW officials to hide bribes from company officials and to hide their embezzlement. The U.S. Justice Department said the bribes were made to keep union leaders, quote, "fat, dumb and happy" in the 2011 and 2015 contract talks. So far, the probe has led to guilty pleas by five people in the UAW. Four of them worked in the union's Fiat Chrysler department and one in the GM department. Then, in the worst possible timing for the UAW, five days before Labor Day...

(SOUNDBITE OF CBS BROADCAST)

DEAN REYNOLDS: FBI raids today on the homes of Gary Jones, the current president of the United Auto Workers, and Dennis Williams, his immediate predecessor.

SAMILTON: That report from CBS. The FBI is investigating allegations of lavish junkets for Jones and Williams paid for with union dues, according to The Detroit News, as well as possible improprieties by a charity Jones created. At the annual Labor Day parade in Detroit, a small group of UAW members refused to march this year, but union workers Kelly Durham and Martha Gravett said it's the wrong time to turn against the union.

KELLY DURHAM: Don't let a few bad apples spoil it for the rest of us.

MARTHA GRAVETT: And we're ready to strike. We want to stop the plant closings, and we want contract justice.

SAMILTON: The UAW says it has taken steps to prevent future wrongdoing and said the raids were unnecessary because it was cooperating with the investigation. But Peter Henning, a former federal prosecutor who now teaches law at Wayne State University, says that's not actually how this works.

PETER HENNING: They believe that they are going to find evidence of criminal conduct.

SAMILTON: While some workers called the timing of the raids political and see it as an attempt to weaken the UAW's bargaining position, Henning says the FBI keeps to its own timeline, not the union's, but he says the investigation could really throw a wrench into what were already going to be contentious contract talks.

HENNING: They had better get a good deal for their membership. Otherwise, I wonder whether the membership is going to trust the agreement that they reach.

SAMILTON: While things are bad now for the union, Henning says they could get even worse. In 1989, the federal government took over the Teamsters because of its long connection to the mob. This is a different kind of corruption.

HENNING: But if there's high-level corruption, the Justice Department has to think, what is it that we can do to protect this union? There are a hundred and fifty thousand members.

SAMILTON: So that's the shadow looming over what are going to be really tough talks for the UAW anyway. How tough? Remember plant worker Martha Gravett and the demand for contract justice? To workers, that means reopening the plants GM closed this year, paying newer workers the same as ones with more seniority, using full-time workers for jobs that temps are doing now, bringing jobs back from Mexico and an hourly wage increase. Michael Hicks is a manufacturing expert at Ball State University. He says those demands come at the wrong time in the boom and bust auto industry cycle.

MICHAEL HICKS: I don't see a real way out for the UAW at this - as we're staring a global recession in the face.

SAMILTON: The rank and file may not be sympathetic to what they see as a lackluster deal. After all, GM is making billions in profits right now, and some workers may suspect their negotiators are compromised. They could reject any deal presented as the best they can get. If they do, that would likely increase the chance of a strike, damaging both the UAW and GM.

For NPR News, I'm Tracy Samilton. Transcript provided by NPR, Copyright NPR.

Corrected: September 14, 2019 at 12:00 AM EDT
A previous introduction to this story incorrectly identified the person arrested this week as a former union official. Vance Pearson, who was charged with embezzlement, is a region director for the UAW. In addition, a previous headline and introduction implied the ongoing FBI investigation centered on Fiat Chrysler. Although the company was involved in an earlier part of the probe, the latest raids and arrests are not connected to Fiat Chrysler.

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