In a court filing this week, lawyers for the United Auto Workers endorsed the appointment of Neil Barofsky, a former federal prosecutor who has become an expert at monitoring troubled institutions, to keep watch over the union for the next six years.
The move is part of a consent decree signed last December aimed at ridding the union of the widespread corruption that has left two former UAW presidents facing prison terms.
Barofsky’s appointment as monitor was recommended by the office of the U.S. Attorney for the Eastern District of Michigan in Detroit. It must be approved by Judge David Lawson, the U.S. District Court judge to whom the racketeering case was assigned when it was filed in December.
Monitor was a TARP watchdog
Barofsky, who has a law degree from New York University and a degree in finance from Wharton School at the University of Pennsylvania, has been an assistant U.S. District Attorney in the Southern District of New York where he specialized in prosecuting financial crimes on Wall Street.
His record as a prosecutor helped him win an appointment by then President George W. Bush as the inspector general of Trouble Asset Relief Program, Congress put in place in 2008 to help salvage the U.S. financial system in the wake of Great Recession.
After resigning as inspector general in 2011, Barofsky wrote a book about his experience with TARP. Called “Bailout,” which reviewers described as behind-the-scenes look at how U.S. government officials served “the interests of Wall Street firms at the expense of the broader public — and at the expense of effective financial reform.”
He is now a partner in prominent law firm Jenner & Block and is considered an expert at monitoring large institutions as an outsider as well as promoting change within institutional cultures.
Under pressure from a lengthy federal investigation that led to the criminal convictions of two former union presidents, Dennis Williams and Gary Jones, the United Auto Workers agreed to a deal that will place the union’s finances and its internal elections under the supervision of the outside monitor for least the next six years.
The UAW also will have to pay for the cost of the monitor, which could run up substantial bills, UAW officials said.
Next step: Union elections
The official appointment of the monitor also will open the window on a referendum in which union members will decide whether to select the UAW’s top officers through a direct election or continue the union’s current system of choosing officers through a delegate and convention system.
However, UAWD, a group of union members bent on reform, fearful that entrenched union leadership will work to subvert any genuine change, are calling on the monitor to skip the referendum, which it expects the union’s administrative caucus is already working to subvert and implement the direct election of officer.
Barbara Harvey, the Detroit lawyer representing UAWD and a veteran of the battles to promote reform within the Teamsters Union, said opening the union to true democracy through direct election of officers is the only way to ensure genuine reform within the union.
Internal corruption led to monitor appointment
The five-year investigation of the UAW, which involved agents from the Federal Bureau of Investigation, Internal Revenue Service and Department of Labor, turned up no evidence of infiltration of organized crime figures, federal authorities said.
Schneider said his office is continuing the investigate corruption cases but made a point of exonerating Rory Gamble, the UAW’s current president, who negotiated the settlement with the U.S. Attorney. “I don’t have any reason to investigate Mr. Gamble,” Schneider said, adding he would not have agreed to a joint press conference with the UAW president if he had.
Nonetheless, a dozen UAW officers and appointed officials. have violated their oaths of office, while stealing from the union and its training funds, according to court records. Jones and Williams have pled guilty to federal crimes as have former UAW presidents Joe Ashton Norwood Jewell. Another former member of the UAW executive board, Vance Pearson, also has plead guilty to federal criminal chargers.
A third UAW vice president General Holiefield was accused in court papers of accepting bribes from officials from Fiat Chrysler Automobiles N.V. died before he could be indicted by a federal grand jury. Holiefield’s wife, Monica Morgan, pleaded guilty to tax evasion.
Gamble, who has served on the UAW’s top executive board since 2006, said he was shocked by the corruption uncovered by federal investigators. “I am just dumfounded by some of this behavior,” he said. “You think you know someone, but it turns out you don’t,” said Gamble, noting he believes those.