If a government takeover of the United Auto Workers looked like a possibility a few days ago, that possibility just became more real. Yesterday, March 5, Gary Jones (in photo), former president of the United Auto Workers, was charged in an information in Detroit federal court for his role in the embezzlement of well over $1 million in funds from the union, enabling himself and other union leaders to splurge on indulgences unrelated to UAW business. Forced from his post in November, Jones is the biggest catch yet in a union-auto industry probe that so far has netted over a dozen guilty pleas. As this is an information, not an indictment, a plea deal is virtually certain. The actions follow a probe by the FBI, the IRS and the U.S. Labor Department’s Office of Labor-Management Standards and Office of Inspector General.
Union Corruption Update has covered this case since it broke publicly more than a half-year ago. FBI and IRS agents late last August, armed with warrants, searched work and residential sites in four states for evidence of a massive web of corruption involving UAW leaders, especially in the union’s General Motors Department. Only a couple weeks earlier, prosecutors had announced charges against a retired UAW senior official, Michael Grimes, for extracting about $2 million in kickbacks from vendors and keeping around three-fourths of the money. Grimes would plead guilty in September. Also eventually charged were union officials Joe Ashton, Jeff Pietrzyk, Vance Pearson and Nick Robinson; each pleaded guilty. These actions were apart from a scandal at the union’s Chrysler Department and the automaker-funded National Training Center that led to eight guilty pleas.
All this served as a pathway to the top of the UAW hierarchy, which is to say, former Presidents Gary Jones and Dennis Williams. Williams, who immediately preceded Jones, hasn’t faced charges yet. But it’s entirely possible that he will. Jones hasn’t been as lucky. When the feds raided his Canton Township, Mich. home in August, they discovered $30,000 in cash and other things of value in the garage. The discovery was more than coincidental. Prior to assuming the helm of the 400,000-member UAW, Jones had served as director of the union’s Region 5, which covers 17 states. His successor at the Hazelwood, Mo.-based regional office was Vance Pearson, who pleaded guilty this February 7 to his role in the scheme.
Especially significant was a close Pearson’s associate, Edward “Nick” Robinson. He pleaded guilty to embezzlement four days ago. Court records show that Robinson and six other UAW officials had ripped off more than $1 million in union cash since 2010, a sum not including missing noncash assets, spending the money on such personal luxuries as private villas, high-end restaurant dinners, golf green fees, spa treatments, premium liquor and premium cigars. He also allegedly split much of the loot with Jones. “Cigars, good liquor, golf items, and sometimes I got the benefit of these items,” Robinson admitted to U.S. District Judge Paul Borman at his plea hearing.
Gary Jones, whose tenure as president lasted slightly less than a year and a half, has been out of the UAW picture for several months. He took a leave of absence from his post on November 2, and then, in the face of pending charges under Article 30 of the UAW bylaws, resigned outright on November 20. With Pearson and Robinson each vowing to cooperate with prosecutors, charges against Jones lay just around the corner. Yesterday the inevitable happened. Jones, cited in earlier documents as “UAW Official A,” was charged in an information with conspiracy to embezzle, racketeering and tax evasion. Matthew Schneider, U.S. Attorney for the Eastern District of Michigan, was blunt. Jones and other union top brass, Schneider said, “spent UAW money on items that the workers of the union could scarcely afford. These improper expenses are completely unrelated to union business.”
Jones’ lawyer, the New York City-based Bruce Maffeo, was unavailable for comment. But things don’t look good for his client. A court filing noted: “After Edward N. Robinson obtained the cash, he split the hundreds of thousands in dollars in cash proceeds with UAW Official A…Between 2010 and 2017, UAW Official A deposited over $93,000 in cash into one of his personal bank accounts.” Robinson also headed a dues-financed UAW activist group in Missouri that spent more than $190,000 on junkets for union leaders during 2014-18. And he also oversaw Jones’ personal charity, the 5 Game Changers Fund, and another group previously controlled by Jones, the Members in Solidarity Fund, each of which have been investigated for financial irregularities. According to prosecutors, Jones attempted to conceal thefts. “UAW Official A (i.e., Jones) also cautioned (Robinson) to avoid cashing any check in excess of $10,000 so as to avoid causing a bank to generate any currency transaction reports,” the brief read. No, things aren’t looking up for Gary Jones.
A conviction of Jones wouldn’t necessarily mean an end to the federal probe. Indeed, it is possible that new United Auto Workers president, Rory Gamble, despite having instituted certain reforms, might be investigated as well. “Our focus is on any corrupt activities within the UAW,” said U.S. Attorney Schneider. “It doesn’t matter who’s doing it. We’re not going to comment on who are our targets are.” Schneider also is circumspect about the possibility of placing the union under a federal trusteeship. “That’s always an option,” he said.
The UAW, most of all, has reason to be angered over this turn of events. The union expressed its grievance in an official statement following the announcement of the charges against Jones. “All UAW members, including the UAW leadership, are and should be angry about the charges of former UAW member Gary Jones and his alleged actions,” read the statement. “This is a violation of trust, a violation of the sacred management of union dues, and goes against everything we believe in as a union. Jones and all who betrayed the trust of our union should be held accountable to the fullest extent of the law.”