Labor Day must have been grim this year at the headquarters of the United Auto Workers. Federal agents last week raided the homes of the union’s president, Gary Jones, and a former president. They haven’t been criminally charged, but it’s an escalation of a probe that has already won guilty pleas.
For years the investigation has focused on the UAW’s Fiat Chrysler unit, which prosecutors say marinated in a “culture of corruption.” Thousands of dollars, purportedly allocated for worker training, were instead allegedly misspent on lavish parties, steakhouse tabs, gifts such as a $2,000 Italian shotgun, and much more.
Last month former UAW vice president Norwood Jewell was sentenced to 15 months in prison. Last year a former Fiat Chrysler vice president who negotiated with the UAW, Alphons Iacobelli, received 5 ½ years. The point of this illegal scheme, according to the feds, was to keep union leaders “fat, dumb and happy.”
Now the investigation seems to be expanding. Three weeks ago a retired staffer at the union’s General Motors training center, Michael Grimes, was accused of taking kickbacks on contracts. The court documents mention, but do not name, two other “senior officials in the UAW GM Department” who were allegedly in on the action. Mr. Grimes plans to take a plea deal, his lawyer told local media, which means he may be cooperating with prosecutors.
After last week’s raids, the union put out a statement saying that it is cooperating with investigators and that Mr. Jones “is determined to uncover and address any and all wrongdoing, wherever it might lead.”
The news comes at an awkward moment, as the UAW is negotiating new contracts with the big three American auto makers. The current terms expire Sept. 14. Employees at all three companies have already voted to authorize strikes, if needed.
The expansion of the federal investigation to the UAW’s top brass also raises the possibility that prosecutors may try to put the union under federal oversight. Facing a racketeering lawsuit in 1989, the International Brotherhood of Teamsters signed a consent degree that involved monitoring of its internal affairs. That agreement wasn’t terminated until 2015.
In the light of all this, perhaps it’s no surprise that nonunion auto workers are opting to stay that way. In June the UAW lost its second attempt to organize the Volkswagen AG plant in Chattanooga, Tenn. The vote, 833 to 776, wasn’t much different from the 2014 result, 712 to 626. Two years ago Nissan workers in Canton, Miss., voted 2,244 to 1,307 to reject the UAW.
Columbia University’s teaching assistants recently joined the UAW, as did card dealers at Caesars Palace. But these nontraditional auto workers aren’t enough to arrest the UAW’s slide. Membership dropped to 396,000 last year, according to federal data, down 8% from 2017. Corruption isn’t a great attraction.
The Wall Street Journal