Former U.A.W. Chief Charged With Misusing Union Funds

Former U.A.W. Chief Charged With Misusing Union Funds

Federal prosecutors have charged a former president of the United Auto Workers union with embezzlement of union funds and other crimes, the biggest step yet in a broad investigation of financial wrongdoing by union and management officials.

In a criminal filing unsealed Thursday, the former official, Gary Jones, is accused of misusing more than $1 million of union money, even before he was elected president in 2018.

He is the highest-ranking U.A.W. official charged in the inquiry. In August, his home in Canton, Mich., was raided by agents from the Federal Bureau of Investigation. He resigned Nov. 20 after the union’s executive board found he had submitted false and misleading expense records and was moving to oust him.

Last fall, Mr. Jones guided the union through a 40-day strike against General Motors that ended with substantial pay increases, promises of large investments in plants in the United States and a process for temporary workers to become permanent employees.

More than a dozen people have been charged in the investigation, which began in 2015 and has focused on misuse of millions of dollars of U.A.W. funds in various ways. Three former Fiat Chrysler executives have been sentenced on charges that they allowed U.A.W. officials to divert money from worker training to personal travel and shopping. One of the Fiat Chrysler executives was found to have used training funds to buy a Ferrari sports car and renovate his home.

The allegations have also prompted a lawsuit by General Motors accusing Fiat Chrysler of bribing union officials to get a leg up on G.M. in contract negotiations.

Mr. Jones’s predecessor as union president, Dennis Williams, has also been a focus of the investigation. A plea agreement in February with a onetime deputy to Mr. Jones indicated that Mr. Williams had urged the use of union money to benefit himself and other officials.

Another senior union official, Joe Ashton, who once held a seat on G.M.’s board, has been charged with taking kickbacks from companies that supplied the union with commemorative watches.

Before becoming U.A.W. president, Mr. Jones headed a regional office spanning 17 states and organized union conferences in Palm Springs, Calif. Prosecutors contend in court filings that he and other officials spent more than $1 million in union money for extended stays in luxury villas, lavish dinners, and expensive clothing, cigars and golf clubs.

On the day Mr. Jones’s home was raided, federal agents also searched other locations, including the union’s 1,000-acre retreat, known as Black Lake, in Onaway, Mich.; the Hazelwood, Mo., office of U.A.W. Region 5, which Mr. Jones once led; and Mr. Williams’s home in Corona, Calif.

Among the sites searched at the Michigan retreat was a lakeside cabin being built for the exclusive use of Mr. Williams, who led the union from 2014 to 2018.

Mr. Williams, who joined the union as a welder, later served as a regional leader and secretary-treasurer. When the charges involving the misuse of training funds to benefit Fiat Chrysler and U.A.W. officials emerged in 2017, he said the union “had absolutely no knowledge of the fraudulent activities detailed in this indictment until they were brought to our attention by the government.”

As the case widened this year, an associate of Mr. Jones’s in Region 5, Edward N. Robinson, was charged on Oct. 31 with drawing more than $1.5 million from union accounts over several years and sharing the money with a person prosecutors identified only as “U.A.W. Official A.”

Two days later, the U.A.W. board convened and announced that Mr. Jones would take a paid leave. Rory Gamble, a union vice president who led the bargaining with Ford, was named interim president.

Union officials have confirmed that references in court filings to “Official A” and “Official B” referred to Mr. Jones and Mr. Williams.

Another union official, Vance Pearson, was charged in September with embezzlement, money laundering, wire fraud, conspiracy and other offenses. Mr. Pearson, who led the Region 5 office after serving as Mr. Jones’s lieutenant there, resigned on Nov. 24 as the union’s board took steps to remove him. He pleaded guilty on Feb. 7 after agreeing to cooperate with prosecutors in the investigation and awaits sentencing.

The plea agreement stated that a request by Mr. Williams, Mr. Jones’s predecessor, was “to a great extent” behind an order for over $13,000 worth of cigars and cigar paraphernalia in 2016. The agreement also said that Mr. Williams had directed Mr. Pearson to procure a private villa for him in California for months at a time, and that Mr. Pearson also helped arrange for Mr. Williams’s wife to charge expenses to the union through a resort.

At the time of Mr. Pearson’s plea, a lawyer for Mr. Williams did not respond to a request for comment, and a lawyer for Mr. Jones declined to comment.

The federal investigation is also looking into other unidentified union officials, according to court filings.

Noam Scheiber contributed reporting.

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