United Auto Workers Union Settles With DOJ Over Corruption Charges
On Monday the Justice Department said it has reached a civil settlement with the United Auto Workers union. The proposed settlement includes a court oversight arrangement that aims to prevent future fraud at the union, and the UAW has agreed to change the way it elects top leadership. In exchange federal prosecutors aren’t going to pursue a racketeering lawsuit against the union ( In the past with the Teamsters union a racketeering lawsuit was used to sever ties with organized crime in the 1980s).
The federal investigation has been going on for years and first became public in 2017 (investigation has lead to more than a dozen convictions, including two former UAW presidents). The settlement doesn’t rule out future criminal charges against individuals and a criminal investigation is still ongoing.
The investigation focused on the wrong doing of UAW’s top ranks and exposed what federal prosecutors deamed a culture of corruption around kickback schemes, embezzlement and other illicit activities ( 15 convictions so far). Prosecutors say they found evidence of the company’s former top bargainer and two other employees providing gifts and money to union leaders through a shared training center facility.
Fiat Chrylser has said the scandal was about personally enrich themselves and that these actions didn’t affect labor negotiations. A similar scheme was later discovered and involved another kickback scheme worth hundreds of thousands of dollars at another training center the union ran with General Motors Co.
Former UAW President Dennis Williams, who served a four-year term starting in 2014, pleaded guilty in September to one charge of embezzling union funds. His successor Gary Jones has pleaded guilty to embezzlement and racketeering charges.
Prosecutors later tied Messrs. Williams and Jones to a scheme where hundreds of thousands of dollars in union funds were used to pay for rental villas, golf outings, expensive meals, cigars and other expenses for labor leaders and their associates.
Mr. Jones has apologized to UAW members and asked for forgiveness. Mr. Williams said he deliberately overlooked Mr. Jones’s financial misconduct.