UAW agrees to government monitoring, settles corruption suit

UAW agrees to government monitoring, settles corruption suit

Consent decree with Justice Department calls for an independent monitor to investigate future corruption, discipline union officials.

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Detroit, Michigan – The United Auto Workers (UAW) union has agreed to a consent decree with the U.S. Attorney’s Office in Detroit, settling a long-running corruption investigation that led to convictions or guilty pleas from several Fiat Chrysler Automobiles (FCA) executives and union officials including ousted president Gary Jones.

The U.S. Department of Justice filed anti-corruption and anti-fraud civil lawsuits against the UAW and immediately agreed to a consent order, effectively settling those cases with the union.

The court will appoint an independent monitor who will have the authority to exercise disciplinary powers within the UAW, to investigate possible fraud or corruption within the union, and to seek discipline against UAW officers for the next six years. The union will pay the monitor’s salary and expenses, and the monitor will not be allowed to conduct any other union business such as contract negotiations.

The UAW will conduct a binding, secret-ballot referendum of its membership to determine whether to change the UAW’s election method from the current delegate system to a direct election model, where the entire UAW membership could vote for the UAW president and the other members of the UAW’s International executive board.

If members agree to direction election, the president will be selected by the membership as a whole for the 2022 election cycle.

The UAW also agreed to resolve a tax investigation by making a payment of $1.5 million to the Internal Revenue Service (IRS) in connection with administrative fees that the union received from the three joint training centers that were operated with the three car manufacturers. In addition, the UAW has already paid back more than $15 million to the training centers for improper chargebacks that the union received from two of the training centers. This money will be used by joint programs for the health and safety of auto workers.

U.S. Attorney Schneider said, “The men and women of the UAW deserve honest and faithful leaders dedicated to serving the best interests of the membership. Today’s settlement provides independent oversight to investigate and eliminate corruption within the union. It also brings real democratic change to the union by giving the membership the opportunity to decide for themselves whether to institute a direct election system.”

UAW President Rory Gamble said the agreement “builds upon the many reforms that the UAW has initiated and put in place ourselves over the past 13 months. This civil resolution brings to a close the government’s investigation and is testament to the hard work that has been done to make the necessary structural and cultural changes.”

Timothy Waters, special agent in charge of the FBI in Michigan said, “The 15 convictions obtained during this years-long investigation make it clear UAW leadership has been unworthy of its members’ trust for some time. This agreement is a result of the hard work done by the FBI, IRS, Department of Labor, and the U.S. Attorney’s Office to investigate and prosecute the leaders who were engaged in corruption at the UAW.”

The fifteen individuals convicted of fraud and corruption crimes include:

  • Former UAW Vice President Joseph Ashton: 30 months in prison
  • Former FCA Vice President for Employee Relations Alphons Iacobelli: 66 months in prison
  • Former FCA Financial Analyst Jerome Durden: 15 months in prison
  • Former Director of FCA’s Employee Relations Department Michael Brown: 12 months in prison
  • Former senior UAW officials Virdell King: 60 days in prison
  • Keith Mickens: 12 months in prison
  • Nancy A. Johnson: 12 months in prison
  • Monica Morgan, the widow of UAW Vice President General Holiefield: 18 months in prison
  • Former UAW Vice President Norwood Jewell: 15 months in prison
  • Former senior UAW official Michael Grimes: 28 months

The following UAW officials have pleaded guilty and are awaiting sentencing:

  • Former UAW President Gary Jones
  • Former senior UAW official Jeffrey Pietrzyk
  • Former UAW Region 5 Director and UAW Board member Vance Pearson
  • Former UAW Midwest CAP President Edward “Nick” Robinson
  • Former UAW President Dennis Williams.