DETROIT — As recently as the middle of this year, UAW President Rory Gamble assumed that the 85-year-old union would soon be stripped of its power and independence by the federal government.
A 3-year-old corruption investigation was continuing to uncover crimes at the labor organization’s highest level, including by Gamble’s two most recent predecessors, and U.S. Attorney Matthew Schneider publicly criticized the UAW’s lack of “active cooperation.” Schneider made clear that one option available to him involved placing the union under federal receivership through the Racketeer Influenced and Corrupt Organizations Act.
“It was very dim,” Gamble told Automotive News last week. “I knew I needed to sit down with the prosecutor, but I also knew I couldn’t go into that meeting empty-handed. The only way we were going to be able to salvage this thing is if we took some severe actions and got some value-added, serious reforms in place. We needed to show we could self-govern.”
The UAW’s fortunes appeared to turn after Gamble and Schneider met June 30, and their periodic dialogue from that point on culminated in last week’s consent decree that spares the union from a government takeover in favor of an independent monitor and the chance for members to get a direct say in choosing leaders.
“When I had the opportunity to sit down with him and had a very long, open discussion, I made sure everything was transparent on our side and I believe he saw that,” said Gamble, who became president in late 2019 after Gary Jones resigned. “The talks kicked off from that point in a more positive direction.”
The deal essentially ends a probe that netted guilty pleas from 15 people — including Jones and 10 other former UAW officials — and ultimately will cost the union millions to resolve tax issues and reform worker training practices that became the basis of a culture of corruption.
Schneider, who declined to comment beyond a joint news conference with Gamble last week, previously indicated that he hoped to wrap up negotiations by the end of the year, as he’s likely to be replaced by the incoming Biden administration. After initially questioning some of the union’s recent moves, Schneider praised Gamble for showing “poise and leadership” in rooting out corruption and bringing “genuine reform to the union.”
Potential voting changes
One potential reform would let rank-and-file members democratically elect the UAW’s president and the vice presidents who lead contract negotiations with the Detroit 3 for the first time in roughly 70 years.
Since the days of Walter Reuther, the UAW’s so-called administrative caucus has usually nominated the winning executive board slate every four years. Other challengers are free to run but usually receive little backing from member-elected delegates.
Investigators identified tens of thousands of dollars in union money that Jones and other officials spent on cigars, champagne, golf clubs and luxury townhouse rentals to curry favor with the outgoing leaders who had the power to choose their successors.
As part of the settlement, the UAW has agreed to hold a secret-ballot referendum, overseen by the independent monitor and the U.S. Labor Department, on whether to implement a one-member, one-vote system. Gamble said the details were being finalized but if members approve, it would likely be implemented by the next UAW convention in 2022, when he will be too old to run again under union rules and plans to retire.
Darin Gilley, financial secretary at Local 2250, which represents workers at the General Motors assembly plant in Wentzville, Mo., is confident that UAW members will approve the switch to a one-member, one-vote system.
“It’s not a panacea. It doesn’t solve all ills, but I think it’s going to make upper leadership more accountable,” he said. “I think our members will feel like they have a bigger say in how things are done.”
Malik Ferguson, a machine operator at a GM powertrain plant in Romulus, Mich., said the potential change is “showing us that the leadership is willing to do what they have to do to give people faith that they’re trying to fix the system.”
He said a more democratic process would definitely be an improvement.
“We really don’t know what these people will do, but at least we have say in how we put them there,” Ferguson said. And if necessary, “we can turn around and take them right back out next term.”
Maintain influence
The union will be subject to monitoring for the next six years, although that time frame could be shortened or extended depending on need. The monitor, who hasn’t yet been chosen, will be able to exercise disciplinary power over the union, can investigate potential corruption and can seek discipline against officers before a UAW trial committee or independent adjudications officer.
Gamble said it was vital that the union retain some control over its own governance. The UAW feared having to repeat the experience of the Teamsters union, which was under federal oversight from 1989 until the start of this year.
“Any time a union gets taken over, the power of the members and the ability to have influence dwindles,” Gamble said.
He said he is proud that the union was able to maintain its influence throughout the probe while negotiating “three great contracts” with the Detroit 3 in fall 2019, helping to elect Joe Biden as president and lobbying legislators.
“Our union is very lucky,” Gamble said. “This thing could have gone another way … in a very bad direction, and probably rightfully so, given what was going on before we started the new administration in November 2019.”
After Jones abruptly quit, Gamble swiftly enacted reforms. He hired an independent ethics officer, increased monetary controls and banned contributions to charities run by UAW officials, a practice the feds found to be corrupt.
The union also sold a cottage in northern Michigan that it built for Jones’ predecessor, Dennis Williams, partly with nonunion labor, and had Williams pay back more than $50,000 in travel expenses deemed inappropriate. Williams is the person most recently charged in the scandal; he pleaded guilty in September and faces up to five years in prison, as does Jones.
Gamble said the union has “proactively weeded out” officials who have abused their positions, including some who have not been criminally prosecuted. He declined to provide details.
“I have no political agenda; I’m looking to retire in the near future,” Gamble said. “My only agenda and my only goal is to save the union that I love.”
Before they became admitted criminals, Jones and Williams implemented their own reforms — Jones called his plan a “clean slate agenda” — but the plans were mostly vague promises that went nowhere.
Mike Herron, who retired last year as shop chairman at Local 1853, which covers GM’s assembly plant in Spring Hill, Tenn., said the years of abuse and corruption have led to a “trust deficit” among UAW members. Still, he believes Gamble’s efforts are sincere.
“Rory Gamble came out and faced reality,” he said. “And I think that he tried to negotiate the best possible solution to the problem at hand.”
1. Jerome Durden, FCA financial analyst
Charged: June 13, 2017
Prison sentence: 15 months (reduced to 8 for cooperating)
Status: Released in April 2020
What he did: Funneled more than $1 million in illegal payments to UAW officials, including $386,400 to General Holiefield’s charity
2. Alphons Iacobelli, FCA US labor relations chief
Charged: July 26, 2017
Prison sentence: 5½ years
Status: Imprisoned in Morgantown, W.Va.; scheduled for release in September 2023
What he did: Funneled more than $1.5 million to UAW officials; kept $1 million to buy a Ferrari 458 Spider, $37,500 pens and a swimming pool; General Motors hired him after he retired from FCA and claims he fed the rival company inside information
3. Monica Morgan, Widow of UAW Vice President General Holiefield
Charged: July 26, 2017
Prison sentence: 18 months (reduced to 13 for attending Bible study and card making and other good behavior)
Status: Released in February 2020; hosts “Monica Speaks,” an AM radio show in Detroit
What she did: Received $32,000 worth of flights, a $43,300 swimming pool and $262,220 to pay off her mortgage
4. Virdell King, UAW associate director
Charged: Aug. 18, 2017
Prison sentence: 2 months (reduced to 1 day for cooperating)
Status: Was credited for time served and did not have to report to prison
What she did: Used a credit card from a training center for Chrysler employees to buy more than $40,000 worth of clothing, jewelry, luggage and other personal items
5. Keith Mickens, Aide to UAW Vice President General Holiefield; co-director of UAW-Chrysler National Training Center
Charged: March 13, 2018
Prison sentence: 1 year
Status: Released in April 2020
What he did: Approved more than $700,000 in payments from FCA to Holiefield and Monica Morgan; used training center credit card to buy electronics, clothes, luggage and golf equipment
6. Nancy Johnson, Aide to UAW Vice President Norwood Jewell
Charged: March 21, 2018
Prison sentence: 1 year (reduced to 5 months for cooperating)
Status: Released in February 2020
What she did: Funneled money from FCA to senior UAW officials, bought $1,100 Christian Louboutin shoes and other luxury items for herself
7. Michael Brown, FCA director of employee relations, co-director of UAW-Chrysler National Training Center
Charged: April 3, 2018
Prison sentence: 1 year (reduced to 6 months for cooperating)
Status: Released in February 2020
What he did: Funneled money from Chrysler training center to UAW officials
8. Norwood Jewell, UAW vice president 2014-16
Charged: March 18, 2019
Prison sentence: 15 months
Status: Under supervision of a halfway house in Detroit
What he did: Accepted up to $95,000 in bribes, including a $2,182 shotgun, $8,927 for a Palm Springs villa and a $25,065 party that served private-label wine
9. Michael Grimes, Executive board member of UAW-GM Center for Human Resources
Charged: Aug. 14, 2019
Prison sentence: 2 years and 4 months
Status: Scheduled for release in May 2022
What he did: Collected bribes and kickbacks with Joe Ashton and Jeffery Pietrzyk
10. Vance Pearson, UAW Region 5 director 2018-19
Charged: Sept. 12, 2019
Prison sentence: Up to 5 years
Status: Awaiting sentencing in February
What he did: Submitted false reimbursement requests to have luxury travel, meals, liquor, cigars and golf clubs paid for with UAW funds
11. Jeffery Pietrzyk, Assistant to UAW Vice President Joe Ashton; co-director of UAW-GM Center for Human Resources
Charged: Sept. 20, 2019
Prison sentence: 24-27 months
Status: Awaiting sentencing in April
What he did: Took $123,000 in bribes and kickbacks from UAW vendors and contractors
12. Edward Robinson, UAW Midwest Community Action Program president
Charged: Oct. 31, 2019
Prison sentence: 30-37 months
Status: Awaiting sentencing in January
What he did: Submitted false receipts to take more than $500,000 from the UAW CAP fund
13. Joe Ashton, UAW vice president 2010-14; GM board member 2014-17
Charged: Nov. 6, 2019
Prison sentence: 2½ years
Status: Has not yet been ordered to report to prison
What he did: Collected $669,000 in kickbacks from a UAW vendor that he shared with Jeffery Pietrzyk and Michael Grimes
14. Gary Jones, UAW president 2018-19
Charged: March 5, 2020
Prison sentence: Up to 5 years
Status: Resigned as president in November 2019; awaiting sentencing in February
What he did: As director of Region 5 before becoming president, used UAW funds to buy cases of wine and boxes of cigars for Dennis Williams, rent villas in Palm Springs and buy golf merchandise; offered to use UAW money to pay a relative of Edward Robinson in exchange for keeping quiet; arranged for union officials to travel and stay in luxury hotels using UAW funds; had $30,000 seized from his garage during an FBI raid
15. Dennis Williams, UAW president 2014-18
Charged: Aug. 27, 2020
Prison sentence: Up to 5 years
Status: Awaiting sentencing in January
What he did: Conspired with other senior officials to conceal hundreds of thousands of dollars in entertainment and travel expenses; celebrated 2015 FCA contract with a $7,000 dinner paid for by FCA
General Holiefield, UAW vice president 2008-14
Died: 2015
Alleged role: Used Chrysler worker training money to pay off his mortgage, install a pool and travel extensively; diverted money to his wife through a fraudulent children’s charity and fake hospice
Sergio Marchionne, FCA CEO
Died: 2018
Alleged role: Ordered payment of bribes to top UAW officials to obtain favorable labor agreements; GM claims he was hoping to financially weaken GM and force it into a merger with FCA
UAW Official C (identity hidden by prosecutors)
Submitted false vouchers to conceal meals, shopping and other expenses for UAW leaders, including one purchase of more than $3,000 worth of shirts, jackets, hats, visors and sunglasses from a Palm Springs golf resort
UAW Official D (identity hidden by prosecutors)
Stayed in a Palm Springs villa for 67 days at a cost to the UAW of more than $11,000; bought $1,000 of golf apparel and equipment with UAW funds
Jim Wells (“UAW Official E”), UAW Region 5 director
Died: 2012
Alleged role: Took money from Edward Robinson to pay debts and buy personal items; pressured staffers to buy $1,000 Region 5 jackets every four years to benefit his reelection campaign