Judge approves UAW watchdog, triggers referendum vote on direct elections

Robert Snell Breana Noble
The Detroit News

Detroit — A federal judge judge Wednesday appointed a government watchdog to oversee the corruption-plagued United Auto Workers on Wednesday, one day after former President Dennis Williams was sentenced to 21 months in prison.

The move by U.S. District Judge David Lawson to appoint New York attorney Neil Barofsky is part of a broader deal reached between federal prosecutors and the UAW to settle a long-running criminal investigation targeting the union. The appointment sets in motion a process that could give UAW members the first chance in the union's history to directly elect new leaders.

Within six months of selecting the monitor, the UAW must hold a referendum vote on amending the constitution to allow for the direct election of the UAW's executive board.

United Auto Workers' Solidarity House in Detroit.

For roughly 70 years, UAW officers have been voted upon by elected delegates representing their locals. With a few exceptions, the powerful Reuther Administrative Caucus effectively controlled who would ascend to top leadership — and who wouldn't.

“We have lots of organizing to do,” said Scott Houldieson, chairperson of the new Unite All Workers for Democracy caucus within the UAW and an electrician at Ford Motor Co.’s Chicago Assembly Plant.

He is a a proponent of the “one member, one vote” model, though he noted the closures of many of the auto plants resulting from the global semiconductor shortage have made such outreach difficult.

“We hope Mr. Barofsky will make that a fair process,” he said of the referendum vote.

The judge's order comes one day after former UAW President Dennis Williams was sentenced to 21 months in federal prison for scheming to embezzle union funds. 

In all, the ongoing crackdown on auto industry corruption has led to the convictions of 15 people, including former UAW president Gary Jones. The investigation 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.

The government oversight is expected to last as long as six years, cost millions and subject the UAW to rigorous oversight. Barofsky will head a team tasked with implementing reforms that target union election, compliance, and investigations.

“We look forward to working with Mr. Barofsky and his team to help ensure democracy in the UAW and to help to do our part and clean up our union,” Houldieson said. “We look forward to setting up a meeting soon. We are hopeful that whatever he doesn’t know, we can help him understand.”

Barofsky was selected after UAW officials proposed multiple candidates, who have not been publicly identified. Federal officials — who had veto power — interviewed candidates and conducted background checks.

Barofsky and his team will have the power to combat fraud within the UAW and decide whether to discipline or remove high-ranking labor leaders. Barofsky served as special inspector general for the $700 billion Troubled Asset Relief Program, a series of moves created during the Great Recession to stabilize and strengthen the financial sector.

The UAW also will be subject to an adjudications officer. The monitor and adjudications officer will be able to employ the personnel necessary to perform their functions. The UAW will be responsible for compensating those positions and their activities.

Barofsky, a partner at the law firm Jenner & Block, leads the firm’s monitorship practice. He monitored Credit Suisse Securities LLC and Credit Suisse AG After billion-dollar settlements and was appointed by the Justice Department and New York State Department of Financial Services. He previously served as an assistant U.S. Attorney in the Southern District of New York.

His team will include:

• Jenner & Block partner Kali Bracey, who would work on overseeing a referendum vote and other election issues. She participated in the Citigroup monitorship and is a former deputy assistant Attorney General.

• Glen McGorty, partner at the Crowell & Moring law firm in New York. He has served as independent monitor of the New York City District Council of Carpenters and is a former assistant U.S. Attorney in the Southern District of New York.

• Jenner & Block partner Reid Schar, who would focus on investigating corruption within the UAW. He is the former lead prosecutor in the corruption case against former Illinois Gov. Rod Blagojevich.

• Jenner & Block partner Erin Schrantz, who will focus on compliance. She has worked alongside Barofsky on the Credit Suisse monitorships.

rsnell@detroitnews.com

Twitter: @robertsnellnews