UAW leader pleads guilty to embezzling member dues
Detroit — A United Auto Workers official accused of embezzling union funds and splitting the money with former President Gary Jones pleaded guilty Monday in federal court, giving prosecutors another building block in a possible federal takeover.
Edward "Nick" Robinson could be sentenced to more than three years in federal prison after admitting he conspired with at least six other UAW officials to embezzle more than $1 million since 2010 and spent the money on personal luxuries. Those luxuries included private villas in Palm Springs, Calif., lavish dinners, golf trips and more than $60,000 spent on cigars.
Robinson, 72, of Kirkwood, Mo., pleaded guilty five months after prosecutors filed a criminal case that elevated the years-long corruption scandal from one involving labor law violations and bribes to what legal sources called outright thievery. The Robinson case includes a failed cover-up, payoffs, labor leaders using burner cell phones and hints at undercover recordings of union officers discussing wrongdoing.
Robinson is the 13th and final person charged so far to plead guilty to criminal charges in a years-long federal crackdown on corruption within the U.S. auto industry. Federal oversight of the UAW is an option once government investigators determine the depths of corruption, a move that could cost tens of millions of dollars, lead to prolonged government control and involve replacing labor leaders.
He has agreed to cooperate with investigators and could receive a lesser sentence.
“You can build these guilty pleas into a racketeering case,” said Peter Henning, a Wayne State University law professor and former federal prosecutor. “That means basically disemboweling the leadership of the UAW.”
U.S. Attorney Matthew Schneider talks about the ongoing corruption case involving leaders of the UAW The Detroit News
Robinson's cooperation was apparent Monday. Inside federal court in Detroit, he greeted the team of government investigators with bear-hugs and big smiles before being released on $10,000 bond.
"He has worked very hard to rectify wrongs he's made and we are well on our way there," Robinson's lawyer, James Martin, told reporters. Robinson admitted sharing embezzled money with more than one UAW official, but did not name names. He itemized how he spent some of the money.
"Cigars, good liquor, golf items and sometimes I got the benefit of these items," Robinson told U.S. District Judge Paul Borman.
The guilty plea came as federal agents continue to investigate Jones and his predecessor, retired President Dennis Williams. The probe has led to labor leaders and Fiat Chrysler Automobiles NV executives convicted of breaking federal labor laws, embezzling union funds and receiving bribes.
A team of federal agents from the FBI, Internal Revenue Services and Labor Department also are investigating current UAW President Rory Gamble. Investigators are probing allegations of strip club payoffs and financial ties between Gamble, retired Vice President Jimmy Settles and one of the union's highest-paid vendors, sources told The Detroit News.
The agents are investigating whether UAW leaders received cash kickbacks or bribes in exchange for awarding lucrative contracts to Huntington Woods businessman Jason Gordon to supply union-branded merchandise, the sources said. Agents are investigating a tip that secret cash payments were delivered to UAW officials at a Detroit strip club, which The News has been told is the Bouzouki Greektown.
In a previous statement, UAW spokesman Brian Rothenberg said Gamble "can say he never took one red cent personally from Mr. Gordon or directly solicited anything from Mr. Gordon. And President Gamble has never been to that establishment with Mr. Gordon. It simply is not true and never happened."
Last fall, Gamble blamed the corruption scandal on a "few bad apples."
“The idea that the UAW has had one bad apple doesn’t ring true. It doesn’t ring true to anybody — the government or the UAW rank-and-file,” said Erik Gordon, a University of Michigan business professor. “It makes them sound silly. This is a big chunk of UAW leadership.”
Borman has broad discretion and could sentence Robinson to up to five years in federal prison for pleading guilty to conspiracy to embezzle union funds and conspiracy to defraud the U.S. He has agreed to pay $42,000 in restitution to the IRS and an unspecified amount of additional restitution.
"Nick Robinson violated his oath of office and betrayed the trust of our hard-working members," the UAW said in a statement.
Robinson is the latest Jones aide to strike a plea deal with investigators who have accused the former UAW presidents of participating in racketeering activity that involved embezzling union funds.
Last month, Jones aide Vance Pearson pleaded guilty after being accused of participating in racketeering activity and agreed to cooperate with the government. He pleaded guilty after being accused of helping embezzle more than $1.5 million in union funds.
Robinson served as president of a regional UAW community action program council. Prosecutors say he conspired with Jones, Williams and other union officials to embezzle money. Jones and Williams are not identified by name. Instead, prosecutors call them "UAW Official A" and "UAW Official B."
Since 2010, Robinson cashed as much as $700,000 in checks from the UAW council and split the money with Jones, according to court records.
"After Edward N. Robinson obtained the cash, he split the hundreds of thousands in dollars in cash proceeds with UAW Official A...," Assistant U.S. Attorneys David Gardey and Steven Cares wrote in the court filing. "Between 2010 and 2017, UAW Official A deposited over $93,000 in cash into one of his personal bank accounts."
Robinson is listed on Labor Department filings as president of a UAW community activist group in Missouri financed by taxes from member dues. The UAW group spent more than $190,000 on junkets for union leaders from 2014-18, according to court records. More than $45,000 was spent by the UAW on meals and liquor, more than $75,000 on golf green fees, golf clubs and merchandise, more than $8,000 on spa treatments and $1,000 at a gun range, according to the government.
Robinson helped oversee Jones' personal charity, the 5 Game Changers Fund and a separate fund previously controlled by Jones. That group, the Members in Solidarity Fund, is part of a long tradition within the UAW of leaders establishing funds to buy flowers for auto workers' funerals but, as The Detroit News exclusively reported last year, federal investigators are questioning whether UAW officers forced staffers to contribute money and kept the cash.
In charging Robinson last fall, prosecutors allege he and Jones tried to hide the alleged scheme. Jones occasionally instructed Robinson to issue checks in odd amounts to conceal the embezzlement from UAW accountants, prosecutors said.
"UAW Official A also cautioned (Robinson) to avoid cashing any check in excess of $10,000 so as to avoid causing a bank to generate any currency transaction reports," prosecutors wrote.
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
By late 2017, with Jones a few months from ascending to the presidency of the UAW, Jones ordered a halt to the embezzlement conspiracy, prosecutors said.
“UAW Official A advised (Robinson) that they needed to halt the cash embezzlement portion of the conspiracy because of the ongoing federal criminal investigation of the United Auto Workers union and because of a new UAW position being taken by UAW Official A," prosecutors wrote.
Jones was elected UAW president in June 2018 but quit in November.
A video primer on corruption: Count the kickbacks, cash and bribes pocketed by Metro Detroit's most corrupt UAW bosses, auto execs and politicians. The Detroit News
The criminal case against Robinson reflects the government's ongoing focus on a UAW Region 5 office near St. Louis. The branch was the UAW's largest region, covering 17 states, including Missouri, Texas and California, but was dissolved last month after being linked to the scandal.
Federal agents raided the regional office Aug. 28 as part of a broader series of searches at six locations in four states. The raids included searches at the home of Jones, Williams and the home of Pearson.
During the raid at Jones' home, investigators seized more than $32,000 cash and a set of Titleist golf clubs similar to the ones purchased during a UAW junket paid for by the UAW community activist group Robinson headed.
In January 2019, seven months after Jones became president, he met with Robinson and Pearson and attempted to cover up the alleged 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.
UAW Official A and Robinson met again in March and talked about whether the government had obtained documents from the UAW and hotels involved in the alleged embezzlement scheme, prosecutors said: "UAW Official A told (Robinson) that he wished they 'burned the records.'"
Four months later, on July 13, a fire tore through UAW headquarters in Detroit, damaging one floor. The fire appears to have started in the IT department, according to court records.
Federal corruption investigators have subpoenaed security camera footage and visitor logs from the UAW Solidarity House for the day of the fire.
“The fire is still under investigation pending results from lab tests from the equipment, including computers that were taken from the building,” said Pat McNulty, Detroit Fire Department’s chief of fire investigation, on Monday.
McNulty said the fire is classified as undetermined pending further investigation. The timeline on a determination is unclear, he said.
In a court filing, a UAW lawyer downplayed defending the union against claims that evidence could be in jeopardy.
"The fire has had a negligible effect on the UAW's ability to fully respond and to continue producing documents in the ongoing government investigation," wrote Jeffrey Sodko, the UAW's deputy general counsel.