Howes: As delegates arrive in Detroit, federal corruption probe weighs on UAW
More than 3,000 delegates and members of the United Auto Workers are set to descend on Cobo Center next week for a quadrennial rite: anointing a new slate of leaders.
The difference this year, amid record profitability for Detroit’s automakers and near-record profit-sharing payouts, is a stark break from the past. The union’s three joint-training centers, each funded by corporate dollars, remain under a federal corruption investigation that already has claimed convictions and plea agreements.
It's credited with forcing the early retirement of at least one sitting vice president, Norwood Jewell, who did not complete his term after the feds raided his home. It forced another retired vice president, Joe Ashton, to resign abruptly from General Motors Co.’s board of directors. And Secretary-Treasurer Gary Casteel, a potential contender for the president's job who was renominated last November, confirmed plans to retire to Tennessee.
Federal investigators are combing records of non-profit organizations with ties to current and former union leaders. They're reviewing expenditures of training-center funds, grants from each of Detroit's three automakers that are determined during national contract talks. They're questioning staff about spending practices and sexual-harassment charges surfaced in a New York Times report focusing on Ford Motor Co.'s Chicago Assembly Plant.
And the feds aren't finished.
Business as usual it’s not, whatever spin is likely to come from the rostrum inside Cobo. The feds are shining a harsh light on the backscratching culture and self-dealing all too common among some of the union’s most senior leaders, affirming fears on assembly lines across the country that the UAW brass is more interested in enriching themselves than enriching the people who do the work and pay their dues.
It's not supposed to work this way. Union members pay dues with expectations their leaders will represent their interests first. And while the training-center monies implicated in the federal charges, chiefly at the UAW-Fiat Chrysler center, do not come from member dues, the earmarked money is intended to finance training programs to benefit members.
Earlier this year, UAW President Dennis Williams issued a statement saying the union is "shocked and saddened by the crimes uncovered by this investigation." He said the "wrongdoing here did not involve the loss of any union funds, the monies at issue did not come from union member paychecks or wages, and the misconduct did not affect the negotiation of the terms of our collective bargaining agreements."
As far as the feds are concerned, the last part is debatable. Central to their ongoing investigation is a simple question government investigators are trying to answer: did the funneling of training center dollars, documented in the case of FCA's chief labor negotiator, Alphons Iacobelli, and the wife of deceased UAW VP General Holiefield, corrupt the bargaining process?
Proving the linkage could be difficult. Fiat Chrysler Automobiles NV's UAW ranks in 2015 rejected the first tentative agreement offered by their bargaining committee, prompting the union to turn its attention to reaching deals with GM and Ford before returning to FCA with a richer deal for its members to consider – and to subsequently approve.
Proving the petty corruption, at least inside the UAW-FCA National Training Center, is turning out to be less difficult. And the mess speaks to the wisdom of legendary UAW President Walter Reuther, who warned against giving union folks access to large sums of money intended to benefit the interests of dues-paying members.
His caution was simple – don't do it, because the temptation may be too great for some. And eight years ago, leaders attending the union's 35th Constitutional Convention approved "Ethical Practices Codes," saying, "membership is entitled to assurance that Union funds are not dissipated and are spent for proper purposes."
It continues: "No officer or representative shall accept 'kickbacks,' under-the-table payments, valuable gifts, lavish entertainment or any personal payment of any kind, other than regular pay and benefits for work performed as an employee from an employer with which the Union bargains or from a business or professional enterprise with which the Union does business."
Straightforward enough. Knowing the rules and following them, however, can be two different things for a lot of folks – and those who made bad choices are undermining the credibility of the union with the members it serves.
Meeting in Detroit next week, the union's leaders have more than a few things to celebrate. They have prosperous employers, slow but steady gains in membership and profit sharing, and what Williams calls "fiscally balanced ... finances three years in a row."
But they also have federal investigators rummaging through their training-center books, interviewing junior staff and scouring the non-profits of many of their key leaders. That's a discomfiting kind of attention all its own.
Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN, listen to his Saturday podcasts, or catch him 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.