The Gary Jones era at the United Auto Workers was brief. But if Jones wants a brief prison sentence, he’ll be at the mercy of prosecutors. Two days ago, June 3, Jones, UAW president until last November, pleaded guilty in U.S. District Court for the Eastern District of Michigan to embezzlement, racketeering and tax fraud related to his role in the diversion of between $1 million and $1.5 million in union funds toward personal luxuries such as vacations, golf outings and cigars, and their coverup. He is set for sentencing on October 6. Thus far, more than a dozen union and auto industry officials have been convicted following an ongoing probe by the FBI, the IRS and the Labor Department’s Office of Labor-Management Standards and Office of Inspector General. A federal takeover of the 400,000-member UAW remains a possibility.
Union Corruption Update has been following this phase of the probe after FBI and IRS agents late last August conducted searches of various work and residential sites for evidence of corruption among UAW leaders, especially within the union’s General Motors Department. A couple weeks earlier, federal prosecutors had announced charges against a retired UAW senior official, Michael Grimes, for extracting about $2 million in kickbacks from vendors and keeping three-fourths of the money. Grimes would plead guilty in September. In short order, Auto Workers officials Joe Ashton, Jeff Pietrzyk, Vance Pearson and Nick Robinson were charged with offenses, pleading guilty afterward.
All this led a path to Gary Jones, now 63, who became United Auto Workers president in June 2018, and his predecessor, Dennis Williams. Thus far, Williams has gone unscathed. But if he’s got things to hide, the now-convicted Jones is more than likely to reveal them to prosecutors in exchange for a lighter sentence. His Canton, Mich. home was part of last August’s raids. During their search, the feds discovered $30,000 in cash and other things of value in the garage. The discovery was of more than passing interest. Prior to ascending to the presidency, 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 in February. Equally significant was a close Pearson associate, Edward “Nick” Robinson, who in early March would plead guilty to embezzlement. Court records showed that Robinson and six other UAW officials had stolen as much as $1.5 million in union assets since 2010. Much of that money went for nonbusiness indulgences such as private villa rentals, spa treatments, and premium cigars.
By last fall, the walls were closing in on President Jones. On November 2, in the face of pending charges under Article 30 of the UAW bylaws, he took a leave of absence. Less than three weeks later, on November 20, he resigned outright. With Pearson and Robinson each vowing to cooperate with prosecutors, charges against Jones, identified in court records as “UAW Official A,” were inevitable. This March 5, he was charged in an information with embezzlement, racketeering and tax evasion. And two days ago, he pleaded guilty to participating in a conspiracy to steal funds and concealing the thefts in reports to the U.S. Labor Department. “While some of these expenditures related to union activities, others were personal in nature and did not relate to union business,” Jones admitted. “I recognize that my actions violated the law as my sworn obligation to my fellow union members.”
As part of his plea deal, Jones has agreed to cooperate with prosecutors and forfeit $140,000 in cash. Federal guidelines call for a prison sentence of between 47 to 56 months. The U.S. Attorney’s Office in Detroit has agreed to seek a lesser sentence if Jones tells all. That’s not good news for Dennis Williams, who served as UAW president during 2014-18. Court records indicate that Williams, identified as “Union Official B,” had urged spending union money ways that would benefit himself and other union officials. During his tenure, the union, among other things, built a luxury lakeside cabin for Williams about 250 miles north of Detroit. Current Auto Workers President Rory Gamble, while calling out the behavior of Jones and his cronies as “selfish” and “immoral,” expressed optimism for the future. “Our union and mission will always be more powerful and resilient than any single individual or obstacle,” said Gamble. “Together, we’ve overcome insurmountable challenges from the Great Depression and the near-collapse of the American auto industry, to the GM-UAW strike and now COVID-19.”
Gamble may be looking at the sunny side of things, but U.S. Attorney Matthew Schneider hasn’t ruled out a government takeover of the union. It’s a wait-and-see thing for now. “With UAW President Gary Jones’ guilty plea today, we move into a new phase of the Justice Department’s investigation of the UAW,” said Schneider. “While our criminal cases and the investigation of criminal conduct by individuals and entities continue, we will shift our focus to reforming the UAW so it serves the working men and women of the union first and foremost. I look forward to meeting with UAW President Rory Gamble as soon as possible to have these important discussions.”