DETROIT – An independent monitor will watch the United Auto Workers’ finances and operations, and members will decide how they pick future leaders under a reform agreement with the U.S. Attorney’s office.
The deal was announced Monday in the wake of a wide-ranging federal probe into corruption that reached into the upper ranks of the 400,000-member union.
It forestalls a possible federal takeover of the UAW due to the probe into bribery and embezzlement that has lasted more than five years.
The monitor, to be nominated by the union and approved by the Justice Department, will stay in place for six years unless all sides agree to end or extend the term. The deal, spelled out in a federal court consent decree, still must be approved by a U.S. district judge.
Matthew Schneider, the U.S. attorney in Detroit, said Monday that the probe of the union has ended, but investigators still are pursuing unspecified individuals.
But he said that current UAW President Rory Gamble is not a target of the investigation. “I don't have any reason to investigate Mr. Gamble,” Schneider said.
Gamble said the settlement, while painful, takes the union another step toward “restoring the full faith and confidence of our members.”
He said it puts in place safeguards that go beyond what the union already has done, including a review of financial controls, hiring an ethics officer and retaining a third-party firm to review finances.
“The UAW going forward is clean, and we are a better union for it,” Gamble said.
The probe has led to 11 convictions of union members, including two former presidents. Schneider said it uncovered embezzlement of over $1.5 million in dues money, kickbacks to union officials from vendors, and $3.5 million in illegal payments from executives at Fiat Chrysler who wanted to corruptly influence contract talks.
The union, he said, already has repaid $15 million in improper charges to joint training centers set up with General Motors, Fiat Chrysler and Ford. It also agreed to pay $1.5 million to the Internal Revenue Service to settle a tax investigation.
Under the deal, union members will decide by secret ballots whether they will vote directly to pick the union's future leaders, within six months of when the monitor is appointed.
Schneider, whose office has been investigating union corruption since 2015, had floated the idea of a government takeover and has advocated for direct voting by members to elect union leadership. Currently the union’s members vote on delegates to a convention, who then vote on a president.
The monitor will administer the election, will have the power to approve hiring or discharges of union employees, and can end or approve contracts, the agreement says.
Lee Harris, a worker at a General Motors engine and transmission factory in Romulus, Michigan, near Detroit, said the union needs additional oversight because of the scandal.
He said he would love to see members directly vote on leaders because the old method was unfair to workers.
“I, as a dues-paying, rank-and-file member, have no say whatsoever,” he said.
Many of the union officials were accused by federal authorities of conspiring with others to cover up the use of union cash for boozy meals, premium cigars, golf and lodging in Palm Springs, California.
Former UAW President Dennis Williams in September pleaded guilty in the government’s investigation, and his successor as president, Gary Jones, pleaded guilty in June.
Williams, 67, was president from 2014 until he retired in 2018. He was accused of conspiring with others to cover up the source of cash for lavish meals, cigars and large expenses.
The union’s Region 5 leadership, which was based in Missouri and headed by Jones, would hold weeklong retreats in Palm Springs and invite Williams along. He said he stayed beyond “what my union business required.”
Williams told a judge that he wondered if money was being misused but that he was assured by Jones that “everything was above board.”
More than $53,000 in union money was used to rent a villa for Williams for monthslong stays in 2015-18, according to a court filing.
He faces a likely prison sentence of 18 to 24 months.
The Detroit-based UAW is best known for representing 150,000 workers at Detroit's three automakers.
Williams has repaid $55,000 in inappropriate travel expenses, the union said. Separately, the UAW is selling a lakefront house built for him at a union conference center in northern Michigan.
Eleven union officials and a late official’s spouse have pleaded guilty since 2017, although not all the crimes were connected. The first wave of convictions, which included some Fiat Chrysler employees, involved taking money from a Fiat Chrysler-UAW training center in Detroit.