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Ex-UAW boss Williams charged in embezzlement scandal as federal probe continues

Detroit — Retired United Auto Workers President Dennis Williams was charged Thursday with conspiracy to embezzle union funds following a years-long investigation into racketeering, bribery and other crimes that has pushed one of the nation's most powerful unions to the brink of a federal takeover.

Williams, 67, of Corona, Calif., is the second UAW president charged during an investigation by agents from the FBI, Labor Department and Internal Revenue Service during a probe that has led to 14 convictions.  It has revealed labor leaders and auto executives broke federal labor laws, stole union funds and received bribes and illegal benefits from union contractors and Fiat Chrysler Automobiles NV executives.

That criminal investigation is ongoing, U.S. Attorney Matthew Schneider told The Detroit News in an interview: "We're not done. This is a very significant step and we are going to continue."

UAW President Dennis Williams

Williams was charged in a criminal information, which means a guilty plea is expected. The criminal charge is punishable by up to five years in federal prison and a $250,000 fine.

“We are aware of criminal charges filed against former UAW President Dennis Williams," UAW spokesman Brian Rothenberg said in a statement. "Any violation of Mr. Williams' oath of office and his responsibility to oversee our members and their sacred dues money, should rightfully face criminal penalty. Today’s development is a sad day for UAW members. But it is also a humbling day of truth and justice demonstrating that no one is above the law, regardless of their position." 

Under President Rory Gamble, the UAW is focused on "comprehensively reviewing and strengthening our union's financial and ethical policies and controls," Rothenberg said. "As we have committed to our membership, when the UAW finds there has been wrongdoing, we will take all available actions to hold that person accountable, no matter how high the office they hold. Let us begin to turn the page to a better union — but let us never forget the painful lessons of the past.”

The case against Williams was filed one day after The Detroit News was first to report that criminal charges against the former UAW president were imminent. His criminal defense lawyer, Chicago attorney Sean Berkowitz, did not respond immediately to a message seeking comment.

“The charges today are further steps forward in our relentless effort to ensure that the over 400,000 men and women of the UAW have honest and ethical leadership," Schneider said in a separate statement. “The UAW’s members deserve leaders dedicated to serving the members and their families, not serving themselves.” 

Schneider declined to talk about the status of an investigation focusing on Gamble, the current UAW president. The News reported in January that federal agents were investigating ties between Gamble and one of the union's highest-paid vendors as well as whether labor leaders received bribes. Gamble has denied wrongdoing.

“It is not our policy to comment on ongoing investigations and whether they exist or not,” Schneider said. “It takes time to follow up on leads in any case.”

Thursday's filing "is consistent with the government's view that there is a long-lived conspiracy amongst one UAW leader after another," said Erik Gordon, a professor at the University of Michigan’s Ross Business School. "That's important to the government's attempt to wrestle management of the union from its current leaders, who, in the government's eyes, could be just the next round of leaders in a long line of leaders who have been found to be corrupt."

The criminal filing caps a prolonged period of uncertainty for Williams, who retired in June 2018. He was publicly implicated in the corruption scandal the next month when The News named Williams as the unidentified UAW official accused in a federal court filing of illegally ordering underlings to offload entertainment and travel expenses to Fiat Chrysler Automobiles.

Williams is the 15th person charged with wrongdoing since the investigation emerged publicly three years ago.

“It’s sad to see that happen,” Neal Kesterson, an electrician at General Motors Co.’s aftersales parts distribution center in Ypsilanti, said of the federal probe’s findings. “Experience is usually a good thing. But your experience has dated you and caused you to go sour. Now, you’re a bad example. They need to get out of the picture, so we can have good examples for the future generations coming up."

Art Wheaton, an automotive industry specialist at Cornell University's Industrial and Labor Relations School, however, does not expect Thursday's filing naming Williams to change the calculus: "There is nothing new here. These are all part of the original allegations from the very beginning."

In Wheaton's view, the federal government is ill-equipped to manage a large union, and he does not believe the case rises to the level of, for example, the influence of organized crime on the International Brotherhood of Teamsters that led to 30 years of federal oversight.

A more productive outcome, he believes, would be a negotiated set of reforms, including changing the UAW's constitution to allow direct elections of union officers: "There is a way to have government auditing, government assistance and check-ins, but it doesn't mean it has to be a complete and total takeover of the union. I'm a firm believer in collective bargaining in which they make changes that everybody can live with."

Some UAW members think some type of third-party oversight could help: “I don’t see a problem with that if they’re making sure it is done right,” Kesterson said. “I think it’s a great idea. Where there’s an opportunity to have votes be falsified, whether it’s a president’s election of the elections of the (local) UAW, we need to have the proper votes.”

Others through the rank-and-file Unite All Workers for Democracy movement are calling on their colleagues to step up and demand a special convention be held to implement the direct election of officials and bring greater accountability to the union.

Scott Houldieson, an electrician at Ford Motor Co.'s Chicago Assembly plant and a founding member of the movement, said his request for the UAW in October to investigate and charge Williams under the union's constitution recently was denied. He is working to appeal it with the union's Public Review Board, but he would welcome the international leaders taking action now.

"It was very disappointing that they felt the federal government needed to step in before they would," Houldieson said.

The conspiracy outlined by federal prosecutors started in 2010, when Williams was the UAW’s secretary/treasurer, and lasted until September. The conspiracy involved top leaders in the UAW assigned to Detroit and a regional office in Missouri.

Williams and his co-conspirators spent hundreds of thousands of dollars on lavish entertainment, private villas, meals, cigars, golf and more during UAW junkets, prosecutors said. And the union bosses hid the expense from members.

There were at least seven members of the conspiracy, prosecutors said. That includes his successor Gary Jones, who pleaded guilty earlier this year and is awaiting a federal prison sentence. Other members include Jones aides Vance Pearson, who oversaw the UAW's regional office in Missouri, and Nick Robinson, who worked at that office. 

Prosecutors use letters to refer to three other members of the conspiracy who have not been charged. The News has previously identified them as: Former Jones aide Danny Trull, aka "UAW Official C." Former Williams aide Amy Loasching, aka "UAW Official D," whose home in Wisconsin was raided by federal agents last year.

Sources helped decipher pseudonyms used by the government to identify former UAW officials implicated in alleged racketeering activity. They are (clockwise from center): Gary Jones, aka "UAW Official A"; Dennis Williams, aka "UAW Official B"; Danny Trull, aka "UAW Official C"; Amy Loasching, aka "UAW Official D"; the late Jim Wells, aka "UAW Official E"; Edward "Nick" Robinson and Vance Pearson.

The late Missouri regional Director Jim Wells, aka "UAW Official E." Wells died in 2012. Jones was previously identified as "UAW Official A," and Williams as "UAW Official B."

The News last year was the first to identify Williams as "UAW Official B," the pseudonym federal prosecutors used in court filings while accusing Williams of criminal wrongdoing. Prosecutors often use nicknames to refer to people in court filings who have not been charged with a crime.

The United Auto Workers used nonunion labor to build this lakefront home for retired President Dennis Williams at the union's 1,000-acre retreat in Onaway.

In court filings, prosecutors accused "UAW Official B" of helping embezzle more than $1 million spent on personal luxuries and illegally used money from Detroit automakers to renovate the union’s northern Michigan resort, where the union built him a $1.3 million lakefront home.

rsnell@detroitnews.com

Twitter: @robertsnellnews

jgrzelewski@detroitnews.com

bnoble@detroitnews.com