Takeover of UAW amid ongoing corruption probe remains an option

U.S. Attorney Matthew Schneider speaks during a news conference March 6, 2020 to discuss charges against former UAW President Gary Jones in Detroit.

U.S. Attorney’s Office

A takeover of the United Auto Workers union by the U.S. government to eliminate a “culture of corruption and greed” remains an option, according to federal officials.

U.S. Attorney Matthew Schneider said Thursday a civil racketeering case similar to one that led to a takeover and decades-long oversight of the Teamsters union is “one of the options” as federal prosecutors continue investigating corruption in the highest ranks of the UAW. 

Aside from implications for the union, a case under the Racketeer Influenced and Corrupt Organizations Act, or RICO, could have political ramifications for the Trump administration. While the UAW has historically supported Democrats, President Donald Trump has touted the support of blue-collar workers in unions such as the UAW.

For the union, government intervention could mean an upheaval of its leadership and operations and force the union into direct elections rather than caucuses, a process some believe has assisted the corruption.

“That has worked well for the Teamsters,” Schneider said Thursday during a news conference in Detroit to discuss unsealed charges against ex-UAW President Gary Jones. “I think that’s something we should all pay attention to and could potentially be a good model here.”

Schneider said it would be “be premature” to comment any further as the investigation is ongoing. The multiyear probe has already led to convictions of 13 others, including 10 people affiliated with the union and three Fiat Chrysler executives. 

FBI agents finish loading materials into a truck out of the home of United Auto Workers President Gary Jones on Wednesday, Aug. 28, 2019.

Michael Wayland / CNBC

Depending on how active a role the government were to take, the Detroit automakers could be directly dealing with government officials rather than elected union officials during negotiations, grievances and other discussions, according to attorney Edwin Stier, who led an anti-corruption task force for the Teamsters from 1999 to 2004.

“The range of things the government has done over the years is a wide spectrum,” said Stier, a former state and federal prosecutor based in New Jersey.

Prior to working for the national Teamsters union, Stier was appointed a U.S. trustee of a corrupt local chapter of the Teamsters. He was responsible for all operations of the union. That compares with the national takeover of the Teamsters union that was more of an oversight and disciplinary.

The Teamsters union is scheduled to end 30 years of government oversight this year following a consent decree to settle racketeering and corruption charges brought against union leaders in 1989.

“What the government needs to do is to look at the problem that they’ve identified, determine whether or not its origins are systemic, and if they’re systemic, how do you make changes? Do you need to take over control of the union completely? Do you need to control some aspect of it?” Stier said.

Although RICO is best known for being used against organized crime, it can be and has been used to prosecute widespread corruption in other organizations.

United Auto Workers (UAW) acting president Rory Gamble speaks to Reuters from his office in Southfield, Michigan, November 6, 2019. REUTERS/Rebecca Cook

Rebecca Cook | Reuters

UAW President Rory Gamble, who took over following Jones taking a leave of absence in November, has said he is concerned that the corruption probe could lead to a RICO case and government oversight.

“It’s a concern, but we’re going to operate going forward to self-govern and save our union,” he told CNBC in November. “I would hope that the government would look at that and recognize that, and going forward give consideration to that. We have the ability by what we put in place to do just that, self-govern our union.”

A UAW spokesman reiterated Gamble’s previous comments as well as reforms the union has taken when questioned Friday about a potential government takeover.

When the federal investigation was made public in July 2017, it focused on a training center jointly operated by the UAW and Fiat Chrysler. But it quickly expanded to probes into similar operations with General Motors and Ford Motor, which both previously confirmed they were cooperating with the investigation.

More recently, the probe has widened to include top union leaders unaffiliated with the training centers being charged with embezzlement of union funds, money laundering and other illegal activities.

No one from the union’s Ford department has been charged, nor have any executives with GM or Ford.

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