DETROIT—In a major development that avoids a federal takeover, the Auto Workers reached agreement with the U.S. attorney in Detroit over moves to clean up the wide-ranging financial scandal that tarred the historic union.
The settlement imposes a federal monitor on the UAW for up to six years, and the investigation will continue at GM and FiatChrysler, whose execs bribed past UAW leaders, U.S. Attorney Matthew Schneider announced in a joint Dec. 14 press conference with union President Rory Gamble. The probe is now complete at the union.
Gamble said the UAW board “embraced” the monitor and “hopes to make his job a boring one” thanks to new internal ethical and financial controls, including its own independent financial officer, put in place since he took over.
And in another big move for accountability, both said union members will vote in a secret-ballot referendum—details and timing to be announced before the next scheduled officers’ election in 2022—on whether UAW should elect its top leaders by direct one-person-one-vote balloting union-wide.
If UAW’s members agree to that, the union would be one of the few to elect its officers by direct balloting, rather than by locals’ delegates at a convention. The others include The News Guild-CWA, the Teamsters, the Letter Carriers, and the Laborers.
In their joint statement, Schneider and Gamble said that, as a formality, the U.S. sued the UAW for corruption and fraud in U.S. District Court and simultaneously filed a settlement agreement of the case.
“Under the terms of the proposed settlement, the court would appoint an Independent Monitor who would have the authority to exercise disciplinary powers within the UAW, to investigate possible fraud or corruption within the union, and to seek discipline against UAW officers and members before a UAW Trial Committee, or before an Independent Adjudications Officer also appointed by the court.”
That monitor would work for up to six years, with the oversight shortened if the government determines the UAW’s corruption is cleaned up by then, or more than six if it is not, the feds and the union agreed. The monitor would leave bargaining and day-to-day union operations in the hands of the UAW board unless the monitor again got evidence of corruption.
Gamble inherited the mess when the union board named him to replace Jones, who resigned both the presidency and from the UAW before the board threw him out. Gamble initiated a cleanup drive and said the pact with the federal government “builds upon the many reforms the UAW has initiated and put in place ourselves over the past 13 months.
“This brings to a close the government’s investigation and is testament to the hard work done to make the necessary structural and cultural changes.” That included “weeding out individuals who put their personal benefit over our members’ interests and who abused their positions of trust to defraud our union and our membership.” Like Jones, they were internally charged, then thrown out of the UAW.
And while Gamble didn’t mention it, the UAW undertook one other structural change: Abolishing Kansas City-based Region 5, which Jones headed before becoming UAW president, and union “home” to some of the others who defrauded the UAW. Its locals were absorbed into two other regions.
Gamble also reminded listeners that since UAW threw out former President Gary Jones, its executive board overhauled internal controls “to ensure no one in our union will have the ability to repeat these misdeeds of the past.”
“As I said upon taking office, my overriding goal is to deliver a clean, reformed, and ethical union to my successor. Today’s collaborative agreement with the government ensures that we are well on our way toward achieving that goal.”
Corruption involving 15 top UAW officers, including former presidents Jones and Dennis Williams landed the union in hot water with the feds. The investigation took years and has landed nine union participants in jail along with the widow of a tenth. She also participated in the fraud. Terms range from two months to five and a half years. Five others, including Williams and Jones, are awaiting sentencing.
The union also agreed to pay the feds a $1.5 million fine. It previously agreed to repay its own training centers for FiatChrysler and GM workers $15 million to replace the money from them that the 15 officers siphoned off for luxury living, including a house for Williams. That money will go for health and safety training of rank-and-file workers, the joint statement said.
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