In addition to the 9 persons already indicted in the United Auto Workers’ (UAW) corruption scandal, Federal Bureau of Investigation agents raided the homes of current UAW president, Gary Jones, and his predecessor, Dennis Williams.
The searches form a deeper investigation into “. . . allegations of bribes, kickbacks and other financial misconduct among union officials in their dealings with the car companies and during the bargaining process dating as far back to 2009,” according to Nora Naughton in the Wall Street Journal.
Jones took over as president of the union last year, with a vow to eliminate corruption. However, the FBI also searched the UAW’s Missouri office, the conference center in Black Lake, Michigan as well as other locations. Before taking over as president, Jones worked in the Missouri office.
In all, the government has raided 6 homes of union officials.
“The UAW in a statement said Mr. Jones has cooperated fully in the federal investigation and said the use of search warrants was unnecessary.
“The UAW has voluntarily responded to every request the government has made throughout the course of its investigation, produced literally hundreds of thousands of documents and other materials to the government, and most importantly, when wrongdoing has been discovered, we have taken strong action to address it,” the union said.
Mr. Jones, at a UAW convention in March, pledged to enact reforms aimed at providing more oversight of financial transactions involving union officials. His proposals mirror those presented by Mr. Williams in 2017.
Mr. Williams was union president during the prior round of contract talks with Ford, Fiat Chrysler and General Motor Co. in 2015. The UAW represents nearly 150,000 factory workers at Ford, Fiat Chrysler and GM. Last month, the union officially began bargaining with the Detroit car companies to replace labor deals expiring on Sept. 14, a process that is largely conducted in private.
The federal investigation has gained momentum after the conviction of Norwood Jewell, who as a top-ranking UAW official led bargaining with Fiat Chrysler. Mr. Jewell was sentenced to 15 months in federal prison earlier this month after pleading guilty to violating the Labor Management Relations Act.
Charges were recently entered against Michael Grimes, a former administrative assistant in the union’s GM department who stands accused of fraud and money laundering. He is the first official in the UAW’s GM department to be named in the investigation, which had largely focused on alleged misconduct between union officials and executives at Fiat Chrysler.
Alphons Iacobelli, a former head of labor relations at Fiat Chrysler, was sentenced to 5½ years in prison last year after pleading guilty to allegations that he made illegal payments to UAW leaders and filed a false tax return that failed to include income illegally siphoned from the company.
In Mr. Iacobelli’s 42-page indictment, federal prosecutors detailed a multiyear scheme to divert $1.2 million in payments and other gifts from a fund set up to train workers. The money went instead to union employees, including now-deceased UAW Vice President General Holiefield, who was the union’s top negotiator for bargaining with Chrysler.
Fiat Chrysler has said the misconduct involved a small group of individuals acting on their own and had no impact on the collective bargaining process.
The Italian-American auto maker disclosed in a securities filing in May it was negotiating a settlement with the Justice Department to resolve the investigation. These negotiations include the possibility of federal oversight of Fiat Chrysler and payments of less than $50 million, according to a person familiar with the talks.
In charges filed earlier this year, Mr. Jewell was accused of using a Fiat Chrysler-funded credit card to purchase a $7,570 dinner at a steakhouse in Palm Springs, Calif., and to make a $1,268 charge at a California golf resort.
In a sentencing memo, Assistant U.S. Attorney David Gardey described Mr. Jewell’s actions as eroding public confidence in the country’s collective bargaining system.”