Howes: Charges against ex-UAW boss inch union closer to federal oversight

Daniel Howes
The Detroit News

The biggest of the United Auto Workers’ many bad apples fell to earth Thursday in the federal crackdown on corruption inside the union.

The government charged former President Gary Jones with embezzling union funds in a racketeering conspiracy and with defrauding the IRS of income taxes. Each of the counts could land the 63-year-old union leader in prison for up to five years.

The charges, though widely anticipated, mark a stunning fall for the one-time leader of a cornerstone of the modern American auto industry — and likely bring the union closer to a federal takeover that could broom the top layer of leadership, install strict financial oversight and impose direct election of officers, including for the powerful president.

U.S. Attorney Matthew Schneider details criminal charges against former United Auto Workers President Gary Jones.

Reforms like those, and more, would shake the union's clubby leadership culture to its core. It would empower the rank-and-file to directly elect (and hold accountable) their leaders, and likely would imperil the powerful "Reuther Administrative Caucus" that effectively has selected leadership "slates" dating back to the end of World War II.

More: ‘We are not done’: Feds signal ex-UAW chief Gary Jones will cooperate

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More: Feds execute raids on UAW leaders in four states, seize cash and files

If Jones cooperates with investigators, as expected, the ex-president alleged to have masterminded an interstate conspiracy to embezzle member dues and pocket some of the cash, the leader whose scheming proved too shocking to ignore, could be the same guy who helps build the case for a federal takeover of the union in exchange for less jail time.

Should federal control of the UAW become a reality, the stain would prove indelible. It would undermine rank-and-file confidence in leadership; would strain trust with Detroit's automakers, suppliers and other employers; would become a recruiting poster for anti-union activists down south trying to block organizing efforts.

It would be humiliating for the UAW and its reputation as a “clean union”; would gut credibility with members whose dues fueled poolside villas and booze, cigars and rounds of golf played far from icy Detroit; would imperil the status of the leaders who survive — for now, until a federal takeover demands an entire layer of leadership be removed.

This is no theoretical threat. U.S. Attorney Matthew Schneider used his news conference Thursday to say a government takeover of the union remains under consideration. And he pointed to the International Brotherhood of Teamsters’ decades-long experience as a potential model to emulate, especially its move to direct elections.

"This isn't a situation where we're looking the other way," he said. "People at the top aren't getting away with it anymore. If it worked for the Teamsters, maybe that's something we need to look at here."

That’s exactly what Jones’ successor, President Rory Gamble, wants to avoid — a federally imposed end to the UAW's self-governance. He says he wants to, quote, “save my union” and prove it can responsibly run its own affairs. But the expanding record of charges, evidence and convictions — much of it clustered in the uppermost reaches of leadership — suggests that will be increasingly hard to demonstrate.

The federal investigation has produced charges against one former president and enmeshed two others. Two former vice presidents have been convicted, a third was implicated after his death from cancer a few years ago, and a fourth is said to be under federal scrutiny. Current and former regional directors and staffers were charged in schemes financed by training center funds, member dues or both.

Altogether, 14 individuals —11 of them connected to the UAW, three once employed by Fiat Chrysler Automobiles NV — have been charged in the corruption roll-up. And federal authorities signaled in toughly worded language that they are not close to done.

A Department of Labor official, Thomas Murray, condemned “an outrageous abuse of power." An IRS official, Sarah Kull, accused Jones of creating “a culture of corruption that became standard practice … for over a decade … using other people’s money.”

The FBI’s special agent in charge of the Detroit office, Steven D'Antuono, expressed “collective disgust at the illegal conduct of auto executives and union officials.” And the U.S. attorney said the federal investigation is “another step closer to ridding the UAW of its corrupt leadership.”

The message was unmistakable. Even as federal oversight technically remains “an option” to consider, the array of law enforcement agencies detailing the case against Jones signals that federal oversight is a near certainty — especially if the arc of corruption widens as the investigation continues.

The tool to make it happen would be the kind civil racketeering lawsuit that summarily retired an entire cadre of Teamsters leaders, excised elements of organized crime and imposed direct elections on the union Hoffa built.

With each new set of charges, and the convictions that follow, the UAW looks increasingly likely to get its turn — and the members would get their union back.


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Daniel Howes’ column runs most Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN. Or listen to his Saturday podcasts at detroitnews.com or on Michigan Radio, 91.7 FM.