A U.S. District Court Judge has sentenced Vance Pearson, the former Director of the United Auto Worker’s Region 5 in Hazelwood, Missouri to 12 months in prison for conspiring with other UAW officials to embezzle hundreds of thousands of dollars from the union’s treasury. Pearson was a former member of the UAW’s International Executive Board. No other criminal charges pending against any former or current UAW officials. Pearson’s sentencing could mark the end of a federal probe that shattered the union’s reputation for integrity and left the UAW under the eye of a court-appointed monitor for the next six years
During a hearing in federal court in Detroit this week, Judge Paul Borman also ordered Pearson to repay the union $250,000 in restitution and to forfeit $122,258. He also said Pearson will face three years of supervised release after he completes his prison sentence. Acting U.S. Attorney Saima S. Mohsin noted in a statement Judge Borman based his sentence on the fact that Pearson had conspired with former UAW President Gary Jones and other senior UAW officials to embezzle UAW dues money and to further racketeering crimes between 2010 and September 2019.
Cooperation earned shorter sentence
Under federal sentencing guidelines, Borman could have sentenced Pearson to between 24 months and 30 months in prison. However, federal prosecutors handling the case asked for a measure of leniency, citing Pearson’s cooperation with the long-running federal investigation. Pearson’s testimony was instrumental in helping federal authorities build the case against Williams, one of the principal targets of the probe by the U.S. Department of Justice, according to federal investigators.
Despite the order for restitution, Pearson’s attorney argued the former UAW officer had not benefited personally from the corrupt scheme, and had simply followed orders from former UAW President Gary Jones and Dennis Williams. Both Jones and Williams have been sentenced to prison for their roles in the conspiracy uncovered by federal investigators.
Between June 2018 and September 2019, Pearson served as the Director of Region 5 of the International Union and before that had served as assistant director of UAW Region under Jones before he was elected UAW President in June 2018. Like Jones, Pearson took a leave of absence from his union post in November 2018 after the Office of the U.S. Attorney for the Eastern District of Michigan announced the criminal charges. The charges against Pearson were in part based on testimony from a former colleague turned federal informant. Pearson resigned from the union in December 2018.
The inquiry was carried out by agents from the FBI, the U.S. Department of Labor and the U.S. Internal Revenue Service.
A total of fifteen people, including three executives from the former Fiat Chrysler Automobiles (now Stellantis), eleven UAW officials and the wife of a UAW officer have pled guilty to charges ranging from accepting bribes from employers in violation of federal labor law, to embezzlement, mail fraud, conspiracy and racketeering.
UAW ready to move on from scandal
The UAW issued a terse statement, indicating it was preparing to put the scandal behind it.
“Today’s sentencing action brings necessary closure to a dark past chapter in UAW history, and while justice has been served, the UAW under President Ray Curry and the International Executive Board are committed to continue building a UAW focused like a laser on the members and families, transparent in its operations and committed to building upon the ethics reforms and bold future that our members deserve,” the statement said.
Curry was elected UAW president effective July 1, replacing Rory Gamble, who negotiated a settlement of racketeering charges brought against the union has a whole by agreeing to an outside monitor, which will oversee the union’s finances and internal elections but have no role in collective bargaining. The union will pay the cost of the outside monitor, according to the settlement signed in December 2020 by the union’s executive board.
Earlier this year, Stellantis also agreed to a $30 million settlement with the Department of Justice to settle a separate racketeering case and agreed to the appointment of an outsider to monitor its labor relations activities.
Despite the racketeering settlements with Stellantis and the UAW, federal authorities have not said whether the investigation is finished.
While no new criminal charges have been filed against individual union officials since 2019, David Gardey, the head of the Public Corruption unit for the Office of the U.S. Attorney for the Eastern District of Michigan, said during a recent court hearing the investigation was continuing.
However, one potential target, former FCA CEO Sergio Marchionne, has died and General Motors has asked for and received a statement from the U.S. attorney clearing the company of any misconduct.
The UAW currently represents over 400,000 active members and over 580,000 retired members in more than 600 local unions across the United States.