Feds scrutinize UAW Solidarity House fire in expanded investigation

Robert Snell Daniel Howes
The Detroit News

Detroit — Federal corruption investigators have subpoenaed security camera footage and visitor logs from the United Auto Workers' Solidarity House for the day a fire damaged the union's headquarters amid a widespread bribery and embezzlement probe targeting labor leaders.

A team of federal agents from the FBI, Internal Revenue Service and Labor Department served the grand jury subpoena on the UAW within days of the July 13 fire at the UAW's riverfront headquarters along East Jefferson Avenue, according to two sources familiar with the investigation.

Plywood remains in place of windows on  October 31, 2019, after a July 13 fire tore through the United Auto Workers' Solidarity House at 8000 E. Jefferson at Van Dyke in Detroit. The fire appeared to have started in the IT department, according to court records on the alleged embezzlement scheme.

The grand jury subpoena reveals a new thread of the sprawling investigation into union officials receiving kickbacks and bribes, embezzling member dues and committing labor law crimes. The corruption investigation has implicated several former UAW officials, including former Presidents Gary Jones and Dennis Williams, and exposed the union to possible takeover by the federal government.

The UAW responded by Aug. 1, one source told The Detroit News, turning over surveillance footage and visitor logs for a period of several days surrounding the fire.

Details about the subpoena surfaced two weeks after U.S. Attorney Matthew Schneider faulted the UAW for failing to cooperate with investigators and accused union leaders of withholding information. 

“The Department of Justice is very suspicious about that fire if they’re asking for video and visitor logs. They’re concerned records may have been destroyed in the fire, and God forbid if it was arson,” said Peter Henning, a Wayne State University law professor and former federal prosecutor. “If evidence was destroyed, that’s obstruction of justice."

The status of the federal investigation is unclear. A U.S. Attorney's Office spokeswoman declined comment.

“The UAW continues to cooperate and respond to all requests made by the prosecutor, including any relevant material regarding the fire,” UAW spokesman Brian Rothenberg told The News. “The fire marshal has determined it was not arson and that it was related to an equipment malfunction.”

Fire officials determined that the blaze started in a storage area with unused electronics and was not suspicious, Detroit Deputy Fire Commissioner David Fornell said in October. "We do not think it's arson."

Federal oversight of UAW an option, top prosecutor says

On Tuesday, Fornell said the fire remained under investigation: “The cause is still undetermined, and there is still an open investigation."

The fire happened two years into a federal prosecution that has produced 11 convictions and charges against 13 people. The investigation is ongoing, and the UAW says it has produced produced "hundreds of thousands of documents and other materials to the government."

Yet the government has accused UAW leaders of trying to obstruct the investigation.

In October, prosecutors charged UAW officer Edward "Nick" Robinson with embezzling as much as $700,000 and splitting the money with Jones. In charging Robinson, prosecutors suggested they had secret recordings of Jones and others discussing crimes and obstructing the investigation.

Jones, who is referred to in court filings as "UAW Official A," has not been charged with a crime. But prosecutors have implicated him in an alleged scheme to embezzle more than $1.5 million. 

FILE — Then-UAW President Gary Jones hugs members of the Ford National Negotiating Team after they are recognized during the 2019 Special Convention on Collective Bargaining ‘We Are One’ at Cobo Center, Wednesday morning, March 13, 2019.

In January 2019, seven months after Jones became president, he met with Robinson and UAW Region 5 Director Vance Pearson and attempted to cover-up the alleged embezzlement scheme, prosecutors said.

"'UAW Official A' promised to provide a sham job to a relative of (Robinson) in order to 'take care of' the relative if Robinson agreed to falsely take sole responsibility for the ... cash embezzlement portion of the conspiracy, thereby attempting to protect 'UAW Official A' from federal criminal prosecution," prosecutors wrote.

The Solidarity House subpoena illustrates the government's thoroughness, said Erik Gordon, a professor at the University of Michigan’s Ross School of Business.

"It shows that the government is still putting large resources into learning more or bolstering its case," he said. "There are three possibilities of what's going on with this subpoena: they're just fishing, they want to confirm something or they're just being thorough."

Staff writer George Hunter contributed.

rsnell@detroitnews.com

Twitter: @robertsnellnews

daniel.howes@detroitnews.com