UAW President Gary Jones goes on paid leave amid corruption probe
Detroit — United Auto Workers President Gary Jones stepped aside Saturday, 16 months into a rocky tenure leading one of the nation's largest and most powerful labor unions — a union beset by corruption and accusations he helped steal $2.2 million from blue-collar workers.
Jones did not resign as president of the union, his attorney, Bruce Maffeo, told The Detroit News. Jones is taking paid leave from a post that pays more than $200,000. Effective Sunday, Vice President Rory Gamble, head of the union's Ford Department, will serve as interim president and become the UAW's first African American president in the union's 84-year history.
“The UAW is fighting tooth and nail to ensure our members have a brighter future. I do not want anything to distract from the mission," Jones said in a statement following a vote by the union's Executive Board. "I want to do what’s best for the members of this great union.”
Under agreement with the UAW, according to a source familiar with the situation, Jones would be obligated to reimburse the union for pay received while on leave should he be convicted in connection with the federal corruption investigation. His decision to step aside came two days after The News identified Jones as the unnamed "UAW Official A" accused by prosecutors of conspiring with a top aide to steal as much as $700,000 in member dues.
"Executives in trouble try to position themselves as making a sacrifice for the good of the organization by using the 'in order to avoid distraction' claim when they step aside," Erik Gordon, a professor at the University of Michigan's Ross School of Business, said via text message.
"Jones could help the union more by resigning than by going on leave and continuing to take pay. Positioning the step-aside as being Jones' request instead of the union's demand makes it look as if he still is in control. The union may have reacted too late and too weakly to credibly claim that it values integrity in its top leaders."
Chris Budnick, a UAW worker at Ford Motor Co.'s Kentucky Truck plant, praised the move Saturday: “It’s a win for the institution. I feel the membership put a lot of pressure on Jones. We can’t have a sitting president get indicted.”
Added John Barbosa, a 14-year veteran at Fiat Chrysler Automobiles NV's Dundee Engine plant who marched with a group of UAW dissidents at Detroit's Labor Day Parade: "This is something that we knew was inevitable. It should have happened a long time ago. There are many of us that want to see the Solid House completely swept clean and have a fresh start with new leadership."
The leadership change comes as federal authorities intensify their continuing investigation into UAW corruption, a nationwide probe stretching from Solidarity House in Detroit to northern Michigan, the Ozarks in Missouri and the desert of southern California, a perennial favorite of union leadership.
And the shakeup follows the union's six-week strike against General Motors Co. that ended in a ratified pattern agreement quarterbacked by Jones, as well as a comparatively quick and amicable tentative agreement with Ford. Negotiations will turn to Fiat Chrysler once UAW-Ford members ratify a contract.
'Decadent' parties, gifts
The News first reported in September 2018 that a team of investigators from the FBI, Internal Revenue Service and Labor Department were investigating union leaders spending $1 million of membership dues on condominiums, liquor, food and golf in Palm Springs, California, where Jones held annual conferences before becoming president.
Tour golf courses and resorts frequented by UAW officials in Palm Springs, Calif., where the union has spent more than $1 million in recent years. The Detroit News
Months later, the Palm Springs focus led to prison sentences and new criminal charges. Former UAW President Norwood Jewell, head of the union's FCA department, was charged in March, pleaded guilty and was sentenced to 15 months in federal prison for accepting bribes.
Jewell received illegal gifts and benefits from FCA executives that included a $2,182 shotgun, $8,927 for a three-bedroom villa with a private pool and hot tub in Palm Springs, a $25,065 "decadent" party with strolling models lighting labor leaders' cigars and wine bottles featuring Jewell's name on the label.
The accusations leveled by prosecutors that Jones stole money and tried to cover-up the crime persuaded members of the UAW's governing board that Jones, who survived a mutiny threat in September after federal agents raided his home the previous month, could no longer remain in office.
All that was left was negotiating terms of his exit, including whether the UAW would continue paying his legal fees, according to a source familiar with the investigation. But a union source briefed on the 8:30 a.m. Saturday conference call of top union leaders said legal fees were not discussed.
“As he has throughout his career, Gary has put the membership’s interests first," Maffeo told The News. "Gary reached this decision on his own and presented to the board, which approved his request.”
The leave for Jones comes after The News identified him as "UAW Official A" in a criminal filing Thursday accusing him and a top aide of conspiring to embezzle as much as $700,000, splitting the money and pocketing it. Sources familiar with the investigation have said the unnamed official is Jones, who has not been charged with wrongdoing. The News first identified Jones as "Union Official A" in September.
The alleged conspiracy outlined in court records Thursday includes a failed cover-up, attempts to obstruct the investigation, labor leaders using burner cell phones to thwart federal agents and a promised payoff designed to shield Jones from prosecution.
Embezzling union dues
Jones' aide Edward "Nick" Robinson, 72, of St. Louis, president of a regional UAW community action program council, was formally charged Thursday and accused of conspiring with Jones and other UAW officials — including "UAW Official B," whom sources identify as former President Dennis Williams — to embezzle more than $1.5 million in member dues and spend the money on private villas, meals, rounds of golf, golf gear, cigars and alcohol.
Robinson's charges include conspiracy to embezzle union funds and conspiracy to defraud the United States, felonies punishable by up to five years in federal prison. They are the latest in a lengthening string of charges and convictions ensnaring UAW leaders across the country.
During a series of raids by federal agents Aug. 28 in four states, federal agents seized $32,000 in cash and a set of Titleist golf clubs purchased four years ago with union money, according to court filings, in Jones' Canton Township home. He had ties to half of the search sites, including the Region 5 office and the home of Robinson.
That search resulted from an investigation into financial dealings involving the nonprofit charity Jones founded and whether he or other union officials spent member dues on junkets to California, The News previously reported. The Region 5 office is listed as the base of Jones' charity, which Robinson oversaw until last year.
IRS records obtained by The News indicate Jones' defunct nonprofit, the 5 Game Changers Charity Fund, received $20,000 from a charity linked to Joe Ashton, a former UAW vice president and director of its GM Department whom prosecutors have accused of participating in a multimillion-dollar bribery scheme, though they have not charged him.
Ashton is vice president of his own charity, the Ashton Fund. Until 2015, its board included Ashton's top aide, Jeff Pietrzyk, who pled guilty in the same bribery scandal. From 2016-17, the nonprofit gave $20,000 to Jones' charity, according to tax filings obtained by The News.
In March, The News reported that agents were investigating whether senior UAW staff members were forced to contribute money to funds originally established to buy flowers for auto workers' funerals and whether union executives kept the money.
Jones previously was president of one flower fund called Members in Solidarity, which Robinson also oversaw until last year. According to state documents obtained by The News, "the objects of this association shall be to advance the interests and welfare of its members ... to provide flowers for the sick and to the families of deceased members and to friends of the club," among other charitable and social causes.
After Jones was elected UAW president last year, Region 5 Director Vance Pearson assumed control of the flower fund, state business records show. The flower fund was not mentioned in the affidavit charging Pearson.
The appointment of Gamble to become interim president, meanwhile, is being hailed as a historic milestone for a union long known for championing civil rights and the equal treatment of minorities on the shop floor and in other assignments.
"Today I salute the UAW for its vision to place Rory Gamble in this leadership position, pray for him and for the restoration of the integrity of the UAW, and I trust that through his leadership that the workers and members of the UAW will move forward in solidarity for 'the union makes us strong,'" community leader the Rev. Horace Sheffield III said in a statement Saturday.
Gamble's ascension likely would position him to make a permanent run for the presidency should Jones' leave and his mounting legal troubles open the presidency for new candidates. Should Jones eventually resign, be indicted or both, the union's governing International Executive Board could select the next president, according to Article 10, Section 17 of UAW constitution.
By placing Gamble in the president's seat, it appears the UAW had few options but to put "another member of the Jones' gang" at the helm, Gordon said. "I think they're stuck. It makes you wonder if there’s anyone capable of stepping in who is clean of the Jones’ taint."
Jones' decision to take a leave of absence is "not an admission of guilt, but he is saying that he does not want to interfere or get in the way of upcoming negotiations" with FCA that are likely to prove difficult, said Art Wheaton, an automotive industry specialist at Cornell University's Industrial and Labor Relations School.
"It’s a great move to have the president leave on his terms," he added. It also was a good move to pick Gamble as interim president, "a very strong candidate who is proven he can bargain the tough contracts" and lead the union in Jones' place.
The UAW-Ford negotiating team lead by Gamble just delivered members a tentative agreement with the Blue Oval that includes wage increases, retained health coverage, a $9,000 ratification bonus and $6 billion in plant investments.
"It’s important for the members to not have additional distractions they don’t need," Wheaton said. "They need someone who can represent them and get the most for them at the table and Rory has proven he can do that."
Still, challenges loom. At the UAW's special bargaining session in March at the former Cobo Center, the union distributed a list of 10 reforms the union had implemented and would make to prevent further corruption. It was called "The UAW's Clean Slate," and largely replicated reforms presented by Williams in 2017. The list included a three-bid process for awarding contracts, stricter oversight of staff expenditures, requirements for disclosing conflicts of interests and a gift ban.
Jones, elected in June 2018 to become the 12th president of the international union, made a rare appearance before members of the news media at the March conventions and offered three minutes of remarks. A union spokesman said Jones wanted to be the "reform president."
"I am deeply saddened and irritated that some leaders in this union and some leaders at the auto companies exploited their positions to benefit themselves," Jones said at the time. "It is my responsibility from this day forward to strengthen your trust in your union."