In a deal with federal authorities, former UAW President Gary Jones faces up to five years in prison after pleading guilty to embezzling more than $1 million in union funds for his personal use and to a separate count of tax evasion while the union remains under scrutiny.
“With UAW President Gary Jones’ guilty plea today, we move into a new phase of the Justice Department’s investigation of the UAW,” Matthew Schneider, the U.S. Attorney for the Eastern District of Michigan, says in a statement.
“While our criminal cases and the investigation of criminal conduct by individuals and entities continue, we will shift our focus to reforming the UAW so it serves the working men and women of the union first and foremost,” Schneider says in a statement released after Jones’ video hearing. “I look forward to meeting with UAW President Rory Gamble as soon as possible to have these important discussions.”
The UAW has cooperated with federal authorities and handed over 1 million pages of documents to federal authorities during the investigation, which became public in the summer of 2017, union spokesman Brian Rothenberg says.
In a statement issued after Jones’ plea, Gamble (below, left) says the union is working to put the scandal created by Jones and other union officers behind it.
“Our Union and mission will always be more powerful and resilient than any single individual or obstacle,” says Gamble, who succeeded Jones as union president. “As we close this chapter, we will continue to focus on implementing the necessary reforms to protect our members.”
Reading from a prepared statement, Jones said he was sorry for betraying his “UAW family, his wife and daughters and their families.”
U.S. District Judge Paul Borman set Jones’ sentencing for Oct. 6.
Jones is the fourteenth defendant to be convicted in connection with the ongoing criminal investigation into corruption within the UAW or relating to illegal payoffs to UAW officials by Fiat Chrysler executives.
The union says it has tightened up its accounting procedures and spending practices, which had been exploited by senior officers such as Jones and other UAW officials including former vice presidents Norwood Jewell and Joe Ashton.
The reforms prevent UAW officers from setting up personal charities and other funds that have been misused in the past. More reforms are planned, Gamble says.
However, the UAW’s executive board has not agreed to other changes to the UAW Constitution long sought by the union’s internal reformers, such as the direct election of officers.
Jones, 63, who served as UAW president from June 2018 until stepping aside in November, pleaded guilty to one count of conspiring to embezzle UAW dues money and conspiring to use a facility of interstate commerce to aid racketeering crimes.
He also pleaded guilty to a separate count of conspiring to defraud the United States by evading the payment of taxes on embezzled funds and causing the UAW to file false tax returns during the same period.
Jones acknowledges that while serving as UAW regional director in charge of the UAW’s western region, he deliberately falsified expense reports filed with union headquarters in Detroit for personal gain.
According to court documents, Jones admitted to conspiring with at least six other union officials to embezzle money from the UAW for his and the other officials’ personal benefit.
Between 2010 and 2018, Jones and other UAW officials admit submitting fraudulent expense forms seeking reimbursement from the UAW’s Detroit headquarters for expenditures supposedly incurred in connection with Region 5 leadership and training conferences.
Jones and his co-conspirators used the conferences to conceal hundreds of thousands of dollars in UAW funds spent on lavish entertainment and personal spending for the conspirators, according to the government.
As part of the plea agreement, Jones agrees to cooperate with the government in preparing charges against other union officials. He also agrees to forfeit his interest in $81,000 in a UAW Region 5 “flower fund,” as well as $38,000 from Jones’ Members in Solidarity account used for internal union political campaigns.
Under the agreement, Jones will forfeit a set of Titleist golf clubs seized when federal agents executed a search warrant at his home in August 2019. Finally, he will reimburse the government for $32,377 in cash seized from his residence.