One of the saddest days in the history of the United Auto Workers came in May 1970, when founder Walter Reuther and his wife May died in a plane crash.
The once-proud union passed another sad milestone last week when federal authorities charged former UAW President Gary Jones with conspiring to embezzle more than $1 million in union funds. Jones also was charged with evading income taxes on the money taken illicitly from the UAW.
Federal prosecutors also added a racketeering charge against the former head of a union that under Reuther and for much of its history was considered a model of integrity.
The charges against Jones, 63, cap off a months-long corruption investigation that began last summer amid negotiations with Detroit’s three automakers when federal agents raided Jones’ home in suburban Detroit.
According to court documents, they found golf equipment, bottles of expensive liquor and boxes of pricey cigars as well as thousands of dollars in cash.
Two of Jones’ top lieutenants, Vance Pierson, who succeeded Jones as director of UAW Region 5, and Edward “Nick” Robinson, president of the Region 5 political arm, have pleaded guilty to charges tied to the embezzlement conspiracy.
In court last week, Robinson promised to cooperate with federal authorities in return for a lighter sentence – 24 months in prison – for his part in the conspiracy, which involved filing phony expense vouchers and distributing cash to his co-conspirators.
Under federal sentencing guidelines, Jones could face up to 10 years in prison at a hearing scheduled for March 19. But, like each of 13 other defendants in the corruption scandal, the former UAW president is expected to seek a plea deal with the U.S. Attorney’s Office in Detroit.
Federal investigators have made it known they also are interested in Jones’ predecessor, Dennis Williams (below, left), who led the UAW from 2014 to 2018 and served as the union’s secretary-treasurer from 2010 to 2014.
Jones was UAW president from June 2018 until resigning in November.
Federal prosecutors say Jones conspired with at least six other senior UAW officials in a multiyear embezzlement conspiracy.
Jones and other UAW officials allegedly concealed personal expenditures racked up during UAW Region 5 conferences held in Palm Springs, CA; Coronado, CA; and Missouri. Between 2010 and 2018, prosecutors say, Jones and other UAW officials submitted fraudulent expense forms seeking reimbursement from the union for expenses supposedly incurred in connection with Region 5 leadership and training conferences.
Norwood Jewell, a former UAW vice president serving a 15-month federal sentence for violating U.S. labor law, said in court last year he misused Fiat Chrysler-UAW training funds while he headed the union’s FCA department from 2014 to 2017.
As a candidate for UAW president, Jones’ resume was relatively thin compared to those of his predecessors. He had served as the union’s chief accountant before becoming an assistant director of the UAW’s Missouri office, but he had never bargained a major contract and was unknown to most union members. His campaign for the union presidency apparently hinged on an effort to win Williams’ endorsement.
Federal prosecutors charged last week that Jones and other senior UAW officials created accounts meant to be used for legitimate conference expenses in California. Instead, they used the money to pay for personal expenses including golf clubs, private villas, cigars, golfing apparel, greens fees at golf courses, and high-end liquor and meals costing more than $750,000. Jones, for example, allegedly ordered over $13,000 in cigars for high-level UAW officials.
When federal investigators moved in last summer, Jones sought to cover his tracks by suggesting Robinson and Pierson destroy documents and begin using “burner phones” to avoid detection, according to court documents.
U.S. Attorney Matthew Schneider says federal supervision of the union is “still on the table.” Jones’ attorney, J. Bruce Maffeo of New York, has declined comment.
“The charges today demonstrate our continuing progress towards restoring honest leadership for the over 400,000 men and women of the UAW,” Schneider said in announcing the charges against Jones last week. “The union’s leaders must be dedicated to serving their members and not serving themselves.”
The scandal broke into public view in 2017 when Alphons Iacobelli, at the time FCA’s vice president for labor relations, was charged with bribing the late General Holiefield, a then-UAW vice president, to win a favorable contract with the union. Iacobelli is serving a 5½-year prison sentence on federal tax-evasion and conspiracy charges.
The scandal has battered the UAW’s reputation. It has undermined union organizing efforts at Volkswagen of America, Nissan and Tesla and led to suggestions last fall’s 40-day strike at General Motors was prolonged to cover up the problems of union leaders.
It also has curtailed the union’s political influence, which Reuther always maintained was the best protection for gains at the bargaining table. The union’s annual political conference in Washington once was a major event. But this year’s event received little attention, even though 2020 is turning out to be an epic year for politics.