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Auto Workers Union, US Agree To Reform Union Following Massive Corruption Scandal

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Thomas Catenacci Energy & Environment Reporter
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  • The United Auto Workers Union (UAW) agreed to a series of oversight measures including the implementation of an independent monitor with a 6-year term who would be able to investigate alleged fraud in the union, the Department of Justice announced Monday.
  • “The men and women of the UAW deserve honest and faithful leaders dedicated to serving the best interests of the membership,” U.S. Attorney Matthew Schneider said in a statement.
  • Former UAW President Dennis Williams – the most recent high-ranking official convicted in connection with the investigation – conspired with Gary Jones, another former president, to embezzle union members’ dues, the DOJ said.

The U.S. agreed to a settlement with the United Auto Workers Union Monday marking an end to the Justice Department’s extensive corruption investigation that resulted in 15 convictions.

The United Auto Workers Union (UAW) agreed to a series of oversight measures including the implementation of an independent monitor who would be able to investigate alleged fraud and exercise disciplinary power over the union, according to a Department of Justice press release announcing the settlement. The agreement completely resolved the criminal and civil investigation the DOJ initiated years ago.

“The men and women of the UAW deserve honest and faithful leaders dedicated to serving the best interests of the membership,” U.S. Attorney Matthew Schneider said in a statement. “Today’s settlement provides independent oversight to investigate and eliminate corruption within the union.” (RELATED: Second Ex-Auto Workers Union President, 15th Official Charged In Federal Corruption Probe)

The UAW also agreed to pay $1.5 million to resolve a tax investigation into administrative fees three training centers paid the union, the DOJ said. The union has already returned more than $15 million to two of the training centers for improper chargebacks.

In 2017, the DOJ alleged that Fiat Chrysler (FCA) paid UAW more than $9 million, money which was supposed to fund training centers, according to The Detroit Free Press. Instead, that money found its way into the pockets of high-level union officials.

“Today’s agreement builds upon the many reforms that the UAW has initiated and put in place ourselves over the past 13 months,” UAW President Rory Gamble said in a statement. “This civil resolution brings to a close the government’s investigation and is testament to the hard work that has been done to make the necessary structural and cultural changes.”

As part of the agreement the independent monitor, who will be in place for 6 years, will additionally be able to seek discipline against officials before a union trial committee, according to the DOJ. (RELATED: Union Bosses Allegedly Blew $1 Million On Cigars, Golf And Restaurants)

The UAW will also be required to conduct a binding secret-ballot referendum of membership, which will be conducted by the monitor and Department of Labor, the DOJ said in the announcement. UAW members will vote on reforming the union’s delegate voting system, the indirect method of voting that currently prevents members from directly electing leadership.

Former UAW presidents Gary Jones and Dennis Williams embrace on stage at the 37th UAW Constitutional Convention in 2018. (Bill Pugliano/Getty Images)

Former UAW president Gary Jones embraces another official during the 37th UAW Constitutional Convention in 2018. (Bill Pugliano/Getty Images)

Former UAW President Dennis Williams became the latest high-ranking official to plead guilty in connection with the corruption investigation in September. Williams conspired with Gary Jones, another former president, to embezzle hundreds of thousands of union members’ dues between 2010 and 2019, according to the DOJ. (RELATED: Ex-Auto Workers President Pleads Guilty To Embezzling Member Dues In Ongoing Federal Corruption Probe)

Williams, Jones and other high-ranking UAW officials charged the union for “multi-month long stays at private villas in Palm Springs, cigars, golfing apparel, green fees at golf courses, and high-end liquor and meals,” the DOJ said. They fraudulently labeled personal spending as expenses related to union conferences.

In addition to Williams and Jones, thirteen other union officials and FCA executives have been convicted, according to the DOJ. Former FCA Vice President for Employee Relations Alphons Iacobelli was sentenced to 66 months in prison while former UAW Vice President Joseph Ashton received a 30-month sentence.

“For unions to be effective, members must trust their leadership to do what is best for the entire union and not just for themselves,” said Timothy Waters, FBI Michigan special agent in charge. “The 15 convictions obtained during this years-long investigation make it clear UAW leadership has been unworthy of its members’ trust for some time.”

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