Disgraced UAW boss Jones appears in court in racketeering case
Detroit — Former United Auto Workers President Gary Jones was arraigned on embezzlement, racketeering and a tax charge Thursday following repeated delays in the criminal case against one of the top targets in a years-long corruption scandal.
Executive U.S. Magistrate Judge Steven Whalen entered a not-guilty plea for Jones, 63, on charges that could send the former labor leader to federal prison for more than five years. It's the first step in a legal process that is expected to intensify June 3.
That is when Jones is scheduled to plead guilty for his role in a conspiracy that has undermined worker confidence, and to help federal investigators build a criminal case against others, including former President Dennis Williams, that could lead the Justice Department to seize control of one of the nation's largest and most powerful unions.
Jones, dressed in a black suit and dark tie, appeared from an undisclosed location via a videoconference set up during the COVID-19 pandemic. The hearing lasted less than 12 minutes and spared Jones the public embarrassment suffered by union brothers and sisters ensnared in the corruption scandal. He was released on a $10,000 unsecured bond, ordered to surrender his passport and pistol license and restrict his travel to the continental U.S.
Jones did not have to run through a gauntlet of reporters and photographers stationed outside federal court in downtown Detroit. That prospect forced close aide Vance Pearson to walk more than four blocks out of his way to avoid the press following his November court appearance. The gambit failed.
And Jones didn't have to face disgruntled UAW workers. A dozen rank-and-file members filled the courtroom and engaged in a tense staring competition with former UAW Vice President Norwood Jewell when he was sentenced in August to 15 months in federal prison.
“He is getting what he deserved,” said Scott Shingledecker, a 56-year-old autoworker employed in repairs at General Motors Co.’s Flint Assembly plant. “He lied when he took office. That was evident. He’s gotten caught.”
Shingledecker understands that federal law protects Jones to be able to receive his pension and other retirement benefits. He wants to see Jones receive the maximum sentence.
“I think that an apology is definitely owed to the membership now as a member who was in a place of authority,” he said. “It was definitely disheartening to a lot of people. I think it caused a righteous distrust in leadership in Solidarity House. He got caught stealing from the membership. That puts a very big distrust in light of what’s happening right now with people returning to work.”
Jones said nothing beyond "Yes sir, your honor" when asked several routine questions during the arraignment Thursday.
Jones was arraigned more than two months after being charged with embezzling more than $1 million, some of which was spent on personal luxuries, including private villas. He is the highest-ranking UAW official charged during a years-long crackdown on corruption within the U.S. auto industry that has revealed labor leaders and auto executives broke federal labor laws, stole union funds and received bribes.
The criminal case against Jones continued a prolonged fall for a labor leader who ascended to the top of the UAW two years ago, vowing to reform an embattled union. Since August, federal agents have raided his home, searched his bank accounts, seized more than $32,000 and portrayed him as a thief who tried to cover up crimes and obstruct investigators, according to court records that identified him by the alias "UAW Official A."
Jones is expected to cooperate with ongoing investigations of Williams, President Rory Gamble and former Vice President Jimmy Settles, The News has learned. The three labor leaders have not been charged with wrongdoing.
Investigators are probing allegations of strip club payoffs in exchange for contracts to supply union-branded merchandise, sources told The Detroit News, as well as financial ties between Gamble, retired Vice President Jimmy Settles and one of the union's highest-paid vendors. Gamble has denied wrongdoing, and a lawyer representing Settles declined comment.
After leading a 40-day strike against General Motors Co. that cost the automaker $3 billion, Jones resigned in November as the union's governing International Executive Board moved to revoke his membership and distance itself from the embattled president.
Jones was first publicly linked to the scandal in September 2018, less than three months into his tenure. That's when The News reported that federal investigators were questioning UAW officials spending almost $1 million on condominiums, liquor, food and golf in California, where Jones held annual conferences before becoming president.
The investigation escalated last August when teams of federal agents launched a series of nationwide raids, including searches at the homes of Jones, Williams, a lakeside UAW retreat in northern Michigan and at locations in Missouri and Wisconsin.
Federal prosecutors implicated Jones in wrongdoing one month after the raids, accusing him and Williams of orchestrating a years-long conspiracy that involved embezzling member dues. Williams is referred to in numerous court filings as "UAW Official B."
More than $1 million was spent on private villas in Palm Springs, lavish meals, expensive liquor and $60,000 cigar-buying sprees, according to the government.
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
The conspiracy described by prosecutors started in 2010 and ended in September. Allegations by the government dismantled an oft-repeated defense from a UAW spokesman that while union leaders bought $1,000 pairs of shoes, Italian-made shotguns and paid for $15,000 steak dinners with bribe money from Fiat Chrysler Automobiles executives, no member dues had been misspent.
The criminal case against Jones clashed with the UAW's narrative about Jones. In June 2018, Jones assumed the union presidency and ordered the union to tout him as a "reform president" whose "Clean Slate" agenda would implement changes to end corruption within the union and its company-funded joint training centers. Federal court filings would soon challenge Jones' reputation as a reformer who started staff meetings with a prayer.
At the UAW's special bargaining session that March in Detroit's Cobo Center, the union distributed a list of 10 reforms it would make that would aim to prevent further corruption. Called "The UAW's Clean Slate," it largely replicated reforms presented by Williams a year earlier — a list that included a three-bid process for awarding contracts, stricter oversight of staff expenditures, requirements for disclosing conflicts of interests and a gift ban.
After Jones formally became the 12th president of the international union, he made a rare appearance before the news media: "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. It is my responsibility from this day forward to strengthen your trust in your union."
Instead, a continuing spiral of convictions and new details in federal court records portrayed a widening corruption scandal that implicated the past two UAW presidents, three former vice presidents, current and former regional directors and staffers in schemes financed by training center funds, member dues or both.
Jones was a thief, prosecutors said in October. On Halloween, prosecutors said Jones and aide Edward "Nick" Robinson conspired to embezzle as much as $700,000 in member dues and split the money.
Court filings provide insight into how Jones and others conspired to defraud the U.S. The UAW's 2017 tax filing contained false statements that prevented the IRS from making an accurate tax assessment regarding money diverted from the union that benefited Robinson, Jones, Williams, Pearson and others, according to the criminal case filed Thursday.
The UAW's tax filing falsely reported the diverted income as a legitimate business expense. The filing also failed to disclose $290,852 in reportable compensation to Jones and other UAW officials, according to the government. In 2017, Jones and others helped transfer $133,611 in union money by issuing checks, prosecutors said. Jones split some of the money with Robinson, prosecutors said.