DETROIT — The UAW’s efforts at rooting out corruption from within have failed to impress federal prosecutors, who allege that an intricate embezzlement scheme reached the union’s highest office and are weighing the option of pursuing a government takeover of the nearly 85-year-old labor organization.
In charging former President Gary Jones with stealing more than $1 million from members and spending it on lavish vacations, dinners and golf outings, U.S. Attorney Matthew Schneider strengthened an argument that the union’s top ranks have been marred by greed and illegal behavior for years. He stressed that the Justice Department is “not done” prosecuting the case, which has so far produced 13 convictions of former union and automaker officials, including two retired UAW vice presidents and a onetime top negotiator at Fiat Chrysler Automobiles.
“It’s not the people working the jobs; it’s the leadership,” Schneider said last week. “That is a real indicator there’s a larger problem here, and that’s why we haven’t taken government oversight off the table. That could be appropriate when you have a situation where it’s embedded, systemic, long-term corruption.”
Schneider pointed to the Teamsters, which spent more than two decades in federal receivership under the Racketeer Influenced and Corrupt Organizations Act. That “could possibly be a good model here,” he said.
Those not-so-subtle indications of what the government is planning come after efforts by Jones’ successor, Rory Gamble, to clean up the union from within.
Gamble has enacted numerous reforms, including hiring an independent ethics officer, ending promotional item purchases with joint program funds and putting a northern Michigan cabin built for former President Dennis Williams up for sale.
The UAW also dissolved Region 5, which was at the center of the corruption scandal for years under the leadership of Jones and Vance Pearson, who has pleaded guilty to embezzlement and awaits sentencing.
Still, Schneider said more could be done. “We have to talk about real reforms, genuine reforms,” he said.
In a statement, the union said: “All UAW members including the UAW leadership are and should be angry about the charges of former UAW member Gary Jones and his alleged actions. This is a violation of trust, a violation of the sacred management of union dues, and goes against everything we believe in as a union. Jones and all who betrayed the trust of our union should be held accountable to the fullest extent of the law, with no exceptions.”
The union’s statement said that nobody referred to in the charges against Jones, “whether by name or by alias, is a current UAW official, board member, or employee.”Still, Schneider said he could not comment on whether the government was investigating current members of the union’s International Executive Board. Gamble has previously told Automotive News he is “confident” the union’s current board members are clean.
The charges mark a dramatic fall from grace for Jones, who denounced the emerging scandal and promised to restore members’ trust in UAW leadership as president.
“When Gary Jones became president, he positioned himself as a reformer, that he was somebody that was going to stop this from happening,” Schneider said. “As we can see, that did not take place.”
Jones was charged in a criminal information, indicating that he intends to plead guilty. He faces up to five years in prison, although that could be reduced if he cooperates with the investigation.
Erik Gordon, a law professor at the University of Michigan, said he hopes this is the end of the corruption within the UAW but that it’s hard to believe it will be.
“You hope … the union can move on with being a union,” Gordon said.
The picture painted by government officials doesn’t suggest that’s likely.
Sarah Kull, a special agent in charge of the Internal Revenue Service office in Detroit, said last week that Jones and others “created a culture of corruption and greed which became regular practice at the UAW for over a decade.”
Kull said the IRS would hold Jones and others accountable.
“The behavior of Mr. Jones and other current and former UAW officials is inexcusable and served one purpose: self-enrichment,” she said. “The hardworking members of the UAW deserves a leadership team it can trust.”