UAW’s Acting President Aims to Prevent Government Takeover
Former GM Board Member Charged in Widening Auto Union Scandal
(Bloomberg) -- Job one for acting United Auto Workers President Rory Gamble is rooting out rot in the union to steer clear of federal oversight.
Gamble took over leadership of the country’s largest auto labor group on an interim basis on Saturday when his predecessor stepped aside amid a Justice Department probe that has metastasized over the past two years into a major scandal. Prosecutors have charged several and convicted some senior UAW officials with a series of crimes ranging from embezzlement to wire fraud.
That has raises the specter of a government takeover much like the federal supervision consent decree by the Teamsters union 30 years ago to settle corruption and racketeering case and which was just lifted in 2015.
In an interview at the union’s temporary headquarters outside Detroit, Gamble said he has a list of new controls designed to clean house at the UAW and, if possible, avoid the fate of the Teamsters. “At this point, we have to be cognizant of that, but we still have a union to protect and maintain. I’m truly praying that we don’t have to go down that road,” he said.
“We need to make sure we never set foot down this path again,” Gamble said of the corruption within the union.
President’s Leave
The acting president also said he has hired Deloitte LLP to conduct a forensic investigation into the union’s books. Gamble has been tapped to fill in for Gary Jones, who went on an indefinite leave of absence Saturday after being implicated in a federal probe that has shadowed his tenure as union head and which dates back at least six months before his December 2017 nomination.
Jones has not been charged with a crime, but is a co-conspirator in an embezzlement case and identified in court filings as “UAW Official A,” the Detroit News reported last week, citing unnamed people familiar with the investigation. He was similarly identified in a case involving his former aide, Bloomberg News reported in September, according to a person familiar with the federal probe who asked not to be identified.
The union faces corruption probes for at least three separate incidents, including a kickback scheme allegedly involving former UAW Vice President Joe Ashton, who served on the board of General Motors Co. He was charged Wednesday by federal prosecutors.
In September, Jones was associated with charges against another union official who allegedly conspired to use union funds for luxury rental villas in Palm Springs, California, as well as more than $1 million worth of golf clubs, gourmet meals, cigars and high-end liquor.
Attorneys for Ashton and Jones were unavailable for comment.
‘Turned My Stomach’
Gamble said the union is treating Jones the way it would any member who is charged with a crime. They put them on paid leave until the justice system finishes its work.
“We’ve had members targeted with a large number of crimes, sometimes heinous crimes,” Gamble said. “They have a right to be innocent until proven guilty.”
Still, Gamble said he is dismayed by the charges in the federal complaint that implicate Jones.
“What I’ve read has turned my stomach,” he said.
The developments come as the union is pursuing new labor contracts with Ford Motor Co. and Fiat Chrysler Automobiles NV and less than two weeks after the UAW reached a deal with GM on Oct. 25, ending an almost six-week strike. Ford’s UAW members are reviewing a tentative agreement with the company ahead of a Nov. 15 deadline for ratification.
Ashton, who resigned from GM’s board in December 2017, faces charges of violating money laundering and wire fraud laws. Those date from his tenure as head of the UAW’s GM department, which he led from 2010 to 2014, prosecutors alleged in documents filed on Wednesday with the Eastern District of Michigan federal court. Ashton allegedly conspired to award a $3.9 million union contract for 58,000 wrist watches to a vendor that then paid bribes and kickbacks to himself and other UAW officials.
GM said in a statement that it is “deeply disturbed” by the allegations against its former board member and that it was not aware of any illegal activity.
To contact the reporters on this story: David Welch in Southfield at dwelch12@bloomberg.net;Chester Dawson in Southfield at cdawson54@bloomberg.net
To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Chester Dawson
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