UAW unloading Williams' lakefront home as part of broad corruption reforms
In a bid to restore the United Auto Workers' credibility amid a federal corruption probe, acting President Rory Gamble is ordering the sale of a lakefront home built for a former president as part of reforms that include appointing an independent ethics officer and stiffening internal financial controls.
“When the United Auto Workers union was created more than 84 years ago, it was built on the idea that the whole is greater than the sum of its parts; that together we are stronger than any one person alone," Gamble said in a statement Wednesday. "And this is still true today.”
The reforms come five weeks after The Detroit News reported that federal agents were investigating whether Detroit automakers indirectly paid to build a lakefront home for retired UAW's President Dennis Williams at the union's northern Michigan compound on Black Lake. And the ethics moves follow a series of charges, delivered amid national contract talks, that implicate leaders at the highest levels in alleged embezzlement and stealing of member dues.
“They’re a little late to the game,” said Peter Henning, a Wayne State University law professor and former federal prosecutor. “These are basic corporate governance reforms that should have been in place years ago."
The proposed reforms might not be enough to stave off a government takeover of the UAW, Henning said — a growing possibility that Gamble has mentioned publicly in media interviews since rising to the presidency of the union. The reforms appear to be an attempt to answer allegations revealed in the years-long corruption probe.
The ongoing federal investigation — including August raids at the homes of Williams and then-President Gary Jones — and 10 convictions so far amplify the possibility the federal government could assume oversight of the union under anti-racketeering statutes.
“This may get them out of a (racketeering) lawsuit," Henning said, "but the UAW is going to have to show that these are real reforms and not just window dressing.”
Added Erik Gordon, a professor at the University of Michigan's Ross School of Business: “Well, these are not reforms. These are a list of things on paper. They say it’s just the beginning, but it’s not even a baby step.
"They need to change the culture, and to change the culture, they need to change the people. Do any auto workers who could be reassigned to the worst job in the plant think it is safe for him or her to say anything to an ethics officer?”
And Chris Budnick, an employee at Ford Motor Co.'s Kentucky Truck Plant and member of the Local 862, called the reforms “a great step forward” and a start to winning back the membership’s trust. But “the membership still wants to see restitution of our dues and for all legal fees paid for the ones convicted.”
This fall, agents were questioning whether as much as $1 million from Detroit automakers was spent on personal luxuries for union leaders, according to sources familiar with the investigation who are not authorized to speak publicly. Those luxuries include a three-bedroom, three-and-a-half bath, 1,885-square-foot home for Williams, boats and a dock exclusively used by UAW officers, the sources said.
The home's design plan includes granite counters, stainless-steel appliances, a wood-burning fireplace, a wine cooler, a patio and a storage room hidden behind a hinged bookshelf door, according to blueprints obtained by The News. The UAW used nonunion labor to build the home for Williams after the union solicited bids that showed the project would cost more than $1.3 million.
Jones and Williams have been accused of participating in a conspiracy that involved embezzling member dues and spending the money on personal luxuries. Neither of them have been charged despite appearing in federal court filings as "UAW Official A" and "UAW Official B" — whom sources told The News are Jones and Williams, respectively.
In response to the widening scandal, the union under Gamble also plans to implement "stringent monetary controls" and to increase oversight by the UAW accounting department; to ban all charitable contributions from joint-training centers, vendors or employers to charities run or controlled by UAW officials; to enact accountability measures for joint programs; and to "permanently" ban "purchases of promotional items using joint program funds."
Gamble is ordering creation of an Ethics Hotline for members and employees to "anonymously and confidentially" report violations of the UAW's ethics code or relevant policies.
“As the acting president, I’m committed to putting in place the right mechanisms to safeguard our union, regaining the trust of our members, and ensuring the misconduct that has recently come to light will never happen again," Gamble said. "That is why I am ordering immediate actions that will lay the foundation for a more transparent, more accountable, and more responsible future for our union.”
The moves come little more than a week after the union's governing International Executive Board named Gamble, the former head of UAW's Ford Department, acting president in the wake of a paid leave of absence for Jones. Jones was named the 12th president of the UAW in June 2018.
At the time, the new UAW president said he was "deeply saddened and irritated that some leaders in this union and some leaders at the auto companies exploited their positions to benefit themselves. It is my responsibility from this day forward to strengthen your trust in your union."
Gamble's reforms aren't the first effort by a UAW president to address the deepening scandal. In March, during its special bargaining convention, the union implemented a number of reforms it later dubbed the "clean slate" agenda. The reforms, began under Jones' predecessor, include requirements for a three-bid process for awarding contracts, stricter oversight of staff expenditures, requirements for disclosing conflicts of interests and a gift ban.
The actions ordered by Gamble include naming an ethics officer to "investigate allegations, complaints or matters" referred to them; stiffening enforcement against members or officers "found guilty of misusing funds;" and seeking "recovery of all misused or misappropriated funds," the union said.
The union also said it would ban spending joint-training center money on promotional items, colloquially known as "trinkets and trash." Three former UAW officials, including former Vice President Joe Ashton, have been charged with receiving bribes and kickbacks from vendors — seven months after The News reported that federal agents were investigating the trinket-and-trash vendors and union officials.
“What Rory Gamble has put in effect is a plan that is designed to react quickly and proactively when there is any scent of any corrupt act taking place,” said Harley Shaiken, a professor at the University of California, Berkeley, who studies labor issues.
“The UAW historically over its 84-year history has been characterized as one of the least corrupt unions. It has a sterling reputation. The recent events underscore no institution — whether it’s a school, a church or a fraternal organization — is immune from this.”
Kalea Hall and Breana Noble contributed.