Federal prosecutors took the investigation into the UAW to another level describing the union’s two previous presidents, Gary Jones and Dennis Williams, as being part of a “racketeering enterprise.”
The new charges were leveled in new court documents filed as part of the preliminary hearing in the government’s case against former UAW Region 5 executive Vance Pearson. The hearing in front of the federal magistrate in Detroit was delayed at the request of Pearson’s attorney, who apparently is attempting to negotiate a plea deal on behalf of his client in exchange for his testimony against other union officers, including Jones and Williams.
Neither Jones, who resigned from the union presidency in early November, nor Williams, who retired in June of 2018 after four years as president, have been charged by federal authorities.
(Former UAW President Jones resigns from union)
The charges against Pearson, the former director of UAW Region 5, filed by the U.S. Attorney’s office, however, cited him for conspiring to embezzle union funds and to use the internet to aid in a “racketeering enterprise for nearly a decade.”
Court documents claimed from at least in or about 2010 and continuing through September, 2019, Pearson and Edward N. Robinson, a colleague of Pearson’s, who also is now facing federal criminal charges, did “unlawfully, knowingly and willfully combine, conspire, confederate, and agree with each other and with other individual known and unknown to commit offenses against the United States.”
Five other union officers or officials identified as UAW Officials A, B, C, D and E in court documents, also participated in the conspiracy. UAW Official A is thought to be Jones while Official B is thought to be Williams, given the clues scattered through the court papers the U.S. Attorney began filing more than two years ago.
Court documents indicated that Pearson, with help from UAW Official A, illicitly helped divert $19,041 in UAW funds to pay for more than $10,000 in golf clothing, as well as shoes, hats, balls and sunglasses purchased by nine different UAW officials. The money diverted was charged off against union funds as outlays for meals during a union conference.
In addition, prosecutors said in another instance, Pearson and UAW official diverted $13,000 to pay for more than two dozen boxes of expensive cigars. The expenditure for cigars was hidden among legitimate conference expenses, prosecutors said.
Brian Rothenberg, communications director for the UAW, which is trying to fend off any kind of racketeering charge against the union itself, was quick to point out that the union was moving ahead with an overhaul of its accounting practices and procedures.
(UAW President Jones takes leave of absence from the union)
“Make no mistake about it. If Vance Pearson misused Union funds to buy personal items for himself and others, and then lied about and hid that conduct from the UAW, he blatantly violated his oath of office and betrayed the trust of all our hard-working members” the UAW said in a statement.
“In November 2019, the UAW International Executive Board filed its own action against Mr. Pearson not just to remove him from his elected position but taking away his membership in the UAW entirely. While our Union is moving forward, we will never forget the costly lessons from our past. Under the leadership of President Rory Gamble, working tirelessly with the Board, the UAW continues to implement a series of critical reforms necessary to strengthen the union’s financial controls, oversight and its overall accounting system so this type of conduct cannot happen again,” the statement said
The spending on the golf equipment and cigars came as Jones was gearing up to run for the UAW’s presidency and to elevate Pearson to be the director of UAW Region 5, which covered the western half of the United States.
While the union nominally elects its top officers at a constitutional convention held every four years, the actual decision on who becomes president actually takes place at a closed caucus of members of the UAW’s top executive board. In turn, the choice of the caucus with fewer than 15 members is than dictated to the convention with the help of small army off UAW officials and local officers.
After a rebellion by union members in the early 1990s who mounted a challenge to the administrative caucus, the union’s leadership made wider use of patronage, favors and if necessary, cash to retain control off key union offices.
The system also gave more power to regional directors and union vice presidents, who had direct control over patronage, which was supported by the joint company-union funds at Chrysler, now Fiat Chrysler, Ford and General Motors.
(FBI Widens UAW Investigation, Raids Current, Former UAW Presidents’ Homes)
Federal investigators also have uncovered widespread abuse of the joint funds at FCA and GM.
Will there be a refund of union dues?