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NY Times: Auto Workers Union Rocked by Embezzlement Scandal

Rory Gamble, acting head of the United Auto Workers union answers questions in Southfield, Michigan
Rory Gamble, acting head of the United Auto Workers union answers questions in Southfield, Michigan. (Paul Sancya/AP)

By    |   Thursday, 26 December 2019 06:16 PM EST

An embezzlement scandal is shaking up one of the nation's largest unions.

In federal court filings in September, officials of the United Auto Workers are accused of spending roughly $1 million in union money on golf outings, dinners, and villa rentals — including $60,000 for pricey boxes of cigars, The New York Times reported.

The scandal comes on top of a probe into company and union officials' improper use of millions from a joint Fiat Chrysler-UAW training center, the Times reported.

A complaint filed in September in Michigan federal court against union leader Vance Pearson refers to several unnamed individuals.

But according to the Times, government documents and interviews with more a dozen people suggest Gary Jones, who resigned last month as president of the UAW, and his predecessor Dennis Williams allegedly are portrayed as more fat cats than defenders of workers.

Meanwhile, Pearson is facing charges including embezzlement of union funds, filing false reports and maintaining false union records, money laundering, conspiracy, and mail and wire fraud, the Detroit Free Press reported.

Neither Jones nor Williams has been charged, and they appear in court filings only as "Official A" and "Official B" — pseudonyms that two unnamed officials told the Times referred to the pair.

"There was a culture of corrupt activities spanning years. That's what we're trying to turn around," said Matthew Schneider, the United States attorney in Detroit, who is leading the investigation into the UAW. "The purpose of the union is not to serve the leadership. It is to serve the members."

At the heart of  a scandal dating back to at least 2013 was a hospitality tab known as the "master account." Union officials opened such accounts at hotels like the Renaissance Palm Springs, the site of an annual series of conferences. According to the federal complaint, union officials billed to this account not just rooms and food that they bought at the hotel but also a variety of other expenses weeks before and after the conferences, the Times reported.

Among the expenses charged to the master account were the villas, which were tucked away in a gated community and cost about $5,000 a month, and dinners that cost thousands of dollars. The bill for one meal at LG's Prime Steakhouse topped $6,500 and featured a $1,760 charge for four bottles of Louis Roederer Cristal Champagne.

Union officials also spent more than $80,000 at the Indian Canyons Golf Resort in Palm Springs for greens fees, shoes, golf bags, sunglasses, shirts, and "fashion shorts," according to the complaint, the Times reported — shipping some of the booty home to Michigan on a semi-truck.

According to documents filed by prosecutors, the orchestrator of the master account was Jones, the Times reported.

In an email, Bruce Maffeo, a lawyer for Jones, dismissed the accusations as stemming "from public documents in which Gary was not charged."

A person close to Williams rejected the reported allegation that he urged the diversion and misuse of training center funds.

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Officials of the United Auto Workers are accused of spending roughly $1 million in union money on golf outings, dinners, villa rentals, including $60,000 for pricey boxes of cigars, according to federal court filings in September, The New York Times reported.
united, auto, workers, union, michigan, embezzlement, scandal
495
2019-16-26
Thursday, 26 December 2019 06:16 PM
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