Ex-Michigan Officials Convicted of Extortion in Hiring Scheme

united-auto-workers-logoNearly a decade ago, in the spring of 1997, General Motors assembly plant workers in Pontiac, Michigan walked off the job in what became a nearly three-month-long strike.  It could have been longer had the automaker not accepted an offer they couldn’t refuse from a United Auto Workers local.  A half year ago, two surviving instigators of the scheme had a date with justice in a federal courtroom.  On June 27, 2006 a jury returned a guilty verdict against Donny Douglas and Jay Campbell, respectively, a former UAW servicing representative and a former shop committee chairman for Local 594, for conspiracy to violate the Taft-Hartley Act and Hobbs Act anti-extortion statutes.  The pair had been indicted nearly four years earlier for using their positions to demand the hiring of unqualified persons, in violation of a contract with GM.  A third man, William J. Coffey, now deceased, also had been indicted, though charges against him were posthumously dismissed.   

 

Local 594 represents around 6,000 workers who make GMC Sierra and Chevrolet Silverado medium-duty pickup trucks rolling off the assembly lines at GM’s Pontiac, Michigan Assembly Center.  From roughly August 1995 to August 1997, prosecutors alleged, Douglas, Campbell and Coffey conspired to demand that GM hire family and friends for skilled trade positions.  They did this fully aware that these persons were unqualified, and that such hiring would be in conflict with hiring procedures spelled out in the union’s contract with GM.  During 1997, the Big Three automaker was hit by a wave of strikes by United Auto Workers affiliates from Detroit to Dayton to Oklahoma City.  The Pontiac plant was among them.  Union leaders saw an opportunity to lay down a quid pro quo to General Motors:  You hire our people and we’ll end the strike.  After a two-month holdout, GM caved in.  The delay was costly.  All told, the 87-day strike cost the company more than $400 million and UAW rank and file about $10,000 to $20,000 per member in lost wages.  GM did make up for lost production, however, by shifting work to other sites.

Three years passed, with Local 594 members growing suspicious that they’d been sold out by their bosses.  In August 2000, more than 20 local members filed a class-action suit alleging the 1997 strike was prolonged by local bargaining committee members.  They accused the committee members of keeping the strike going until GM provided kickbacks for them and jobs for family members of union officials.  Quickly, more than 100 other workers joined in.  “GM paid off this extortion plot,” said Harold Dunne, a Michigan attorney (and a former UAW international official) who represented the workers.  “The UAW leaders used the membership for their own personal gain.”  The suit alleged that Douglas, Campbell and Coffey, in addition to pressuring their employer to engage in illegal hiring, generated $200,000 in bogus overtime payments from GM, splitting the money among themselves and unidentified union representatives.  The suit led to a joint investigation by the FBI and the Labor Department’s Office of Inspector General, which in turn led to indictments in 2002 by a federal grand jury.  The charges were dismissed the following year by U.S. District Judge Nancy Edmunds, but reinstated in 2004 by the Sixth Circuit of the U.S. Court of Appeals.  General Motors has been running in the red for much of this decade; the actions of Local 594 leadership are at least a small reason why.  (U.S. Department of Labor, Office of Inspector General, Semiannual Report to Congress, April 1 – September 30, 2006, Volume 56; other sources).