UAW accepts offer on controversial Black Lake home built for Dennis Williams
Detroit — The United Auto Workers has accepted an offer to sell a $1.3 million lakefront home built for retired President Dennis Williams as federal prosecutors signaled their interest in having the property forfeited to the government.
The sale to an unidentified buyer is pending, and UAW officials are in talks with the U.S. Attorney's Office to remove a lien filed against 27 acres of land and the cottage at the union's Black Lake Conference Center in Onaway.
A sale would yield an unspecified amount of money for the UAW and let the union shed a controversial property built with nonunion labor that has become a symbol of corruption during a scandal that has led to 14 convictions. New UAW President Rory Gamble detailed plans to sell the building last year as part of a broader series of reforms after the home was raided by federal agents as part of an ongoing embezzlement investigation targeting Williams.
The UAW confirmed the pending sale Wednesday, three months after federal prosecutors filed a lien on a 27-acre section of the Black Lake resort, which includes a golf course, hotel and conference center.
“This is the right thing to do,” Gamble said in a statement Wednesday. "We committed to this as part of our comprehensive reforms and I believe the government agrees that the sale of Cabin 4 should go forward to an independent buyer and the proceeds from the sale should go back to what our membership intended it be used for to begin with."
The property could be subject to forfeiture because of various crimes under investigation, including embezzlement, conspiracy to defraud the U.S. and violations of labor laws barring union officials from receiving money from auto executives, according to the lien filed in Cheboygan County.
The crimes are listed on an affidavit federal prosecutors filed in Cheboygan County on March 11, according to a copy obtained by The Detroit News.
“This means they could go and try to seize the Black Lake property because of the corruption issues going on,” said Peter Henning, a Wayne State University law professor and former federal prosecutor.
The prospective buyer has no ties to the UAW, union spokesman Brian Rothenberg wrote in a statement to The News: "It is our understanding that the U.S. Attorney’s Office has indicated they will remove the filing as soon as they have verified the buyer is an independent party, and we provided all requested information to them about the sale."
Gina Balaya, a spokeswoman for the U.S. Attorney's Office, said the affidavit on the property will be removed "at the appropriate time." She said the deal requires some local and state approval because of lake access and land division.
"We have absolutely no reason to believe the government is interested in blocking the sale and we have been working cooperatively with the government to finalize the sale," Rothenberg added. "We understand there have been some delays in finalizing the sale due to COVID-19."
The lien is the latest legal development in a years-long corruption investigation targeting UAW leaders, and the latest entanglement involving Black Lake. Federal agents raided Black Lake in August and searched a $1.3 million home on the shores of Black Lake the UAW built with nonunion labor for retired President Dennis Williams.
UAW leaders approved construction of the retirement home amid a federal investigation into whether union funds illegally benefited labor leaders. Last week, federal prosecutors accused Williams of helping embezzle more than $1 million spent on personal luxuries and illegally using money from Detroit automakers to renovate the union’s northern Michigan resort.
The 1,885-square-foot home — featuring a secret room hidden behind a hinged bookshelf — was recently listed for sale for $1.3 million as part of a broad series of reforms announced by Gamble.
The government lien could complicate a sale, Henning said: “If I’m a buyer, I’m very fearful that the government is going to seize the property. That’s going to be a problem.”
The Williams cottage is a contrast to the rustic lodging available to rent at the 241-room resort. Opened in 1970, the center features a campground, gym, Olympic-size pool and an adjacent golf course. The ashes of former UAW President Walter Reuther and wife May were scattered on the center’s grounds after the couple was killed in an airplane crash nearby in 1970.
The Black Lake conference center and golf course are valued at approximately $37 million, according to the union's 2018 Labor Department filing. The UAW flirted with selling the Black Lake retreat in early 2010 during the Great Recession, citing shrinking membership. At the time, the retreat had lost an estimated $23 million during the previous five years and the UAW was forced to borrow to keep it afloat, according to Labor Department filings.
The affidavit does not automatically signal that prosecutors will move to have the Black Lake property forfeited to the government. The U.S. Attorney's Office filed similar liens against others convicted in the corruption scandal, including former Fiat Chrysler Automobiles Vice President Alphons Iacobelli and Monica Morgan Holiefield, wife of the late UAW Vice President General Holiefield, but did not seize the homes.
The Associated Press contributed