Opinion: Give UAW a major overhaul
Gary Jones resigned as president of the UAW last month after federal prosecutors implicated him in a scheme to embezzle $700,000 in members’ dues money. Jones’ replacement as president announced an ethics reform package designed to rebuild members’ trust and ward off a potential government takeover.
The United States attorney leading the federal investigation told The Detroit News he was unimpressed with the union's proposed reforms, and rightly so. If the UAW is serious about regaining its moral credibility and avoiding the same government-imposed fate as the Teamsters, it needs to do more than tinker with the status quo.
Start with the creation of a new corruption-focused ethics office independent of the UAW, with the power to investigative tips brought directly by union members or employees of the union. (This would be separate from the union's Public Review Board.) Such an office would ideally be housed in a law firm, funded by a no-strings-attached payment from the UAW, and have unfettered access to investigate complaints. Uber's 2017 decision to retain Eric Holder and his law firm Covington & Burling to address reports of a toxic workplace culture suggests a possible model for the union to follow.
The need for an authority figure independent of union leadership is clear. The federal investigation established that a “culture of corruption” existed within the union's leadership; officials tolerated or engaged in criminal behavior because speaking up could mean retaliation by their peers, including a forced return from cushy leadership offices to the factory floor. A corruption watchdog would provide an anonymous portal for future whistleblowers to be heard.
The wisdom of this approach is apparently lost on the UAW’s executive board, whose own proposed ethics ombudsman would be an employee of the union and ultimately accountable to UAW leadership. In this scenario, complaints approved by the ombudsman or the union’s executive board would then be referred to an independent ethics officer. The conflict here is obvious: A union whistleblower could find his complaint buried by an implicated official, or face retaliation from union leadership for speaking up.
Once an independent ethics office is created, its first task is a comprehensive report for the membership on every misuse of dues money — and how members will be made whole for that loss. Federal prosecutors have detailed how millions of dollars intended to benefit members instead underwrote a luxury lifestyle for the union’s leaders; high-end cigars, fine wine, steak dinners and five-star accommodations were the norm for the union's captain class. The union must reckon with the multiple failures of oversight systems — or the lack of those systems — that permitted such institutional corruption to exist.
Any oversight program should also include a new regime of radical transparency for members to observe how their money is spent. Presently, UAW members have little insight on this spending; the union's annual federal spending reports (called LM-2s) aren’t well-publicized, and it's easy to disguise improper spending under broad six- or seven-figure expense categories. Starting next year, the union should commit to publicize any significant expense (I'd recommend a $5K threshold) that directly benefits a member of the union's executive team.
Today's technological advances should make it simple to provide members with this kind of real-time insight. Did the executive board spend several thousand dues dollars on a high-end steak dinner downtown? Was a six-figure check written to cover a leadership retreat at a tropical destination? Members should be able to view these expenses online and ask questions as necessary.
Real change at the UAW starts with a reckoning over its leaders’ criminal behavior, but it ends with providing union members real choice in who leads their union.
As recently as 40 years ago, the UAW had more than 1.5 million members and was arguably the most-powerful labor union in the country. Today, it's a shell of its former self: The union's membership dropped below 400,000 last year, and its major organizing gains are happening outside the auto industry. True reform will be difficult for the UAW, but failure to do so could mean the union's end.
Michael Saltsman is a partner at Berman and Company, where he serves as managing director of the nonprofit Employment Policies Institute