US Attorney paints portrait of greed among UAW leaders involved in corruption scandal

For U.S. Attorney Matthew Schneider, the corruption allegations against UAW brass at a time rank-and-file union members were living off strike pay on the picket lines was hard to stomach.

It's a theme of greed he mentioned more than once Monday during a sit-down with reporters at the U.S. Attorney's Office in Detroit.

"It was really disturbing during the strike to see that the workers were getting paid $275 a week and it’s been publicly explained that the union leadership has been drinking out of thousand-dollar bottles of booze. I mean who does that? What does that say to your membership? It’s unconscionable that that would happen," Schneider said, referencing the UAW's 40-day strike against General Motors.

"That has to be frustrating to the hardworking men and women of the union. I know it’s hard for people who are just trying to enforce the law. It’s difficult to swallow that." 

And that strike pay level had actually increased from $250 per week during the strike.

Schneider weighed in on the corruption allegations that have led to charges against 13 ex-UAW and Fiat Chrysler Automobiles officials and highlighted the fact that the case is not at an end. The case has led to resignations, from Gary Jones as UAW president and Vance Pearson as Region 5 director, and court papers suggest more charges are likely. Both Jones and ex-UAW President Dennis Williams, for instance, have been implicated as unnamed officials accused of embezzling union funds and identified to the Free Press by a source. 

Schneider declined to address any future charges and said it's impossible to predict where prosecutors are in the case, walking back previous comments to the Detroit News that the case might only be halfway through. 

On Wednesday, former UAW Vice President Joseph Ashton, who also sat on the General Motors board, is expected to plead guilty in federal court to conspiracy charges related to wire fraud and money laundering. Ashton is accused in a scheme involving hundreds of thousands of dollars in bribes and kickbacks on contracts worth millions of dollars.

It's the same day local union leaders are to meet in Detroit to consider forwarding the proposed tentative agreement between FCA and the UAW to the membership for a vote. If they do and members ratify the deal, it would mark the end of 2019 contract negotiations for the Detroit Three.  

Schneider spoke also about the role the federal government could play in the union's future, although he said it's premature to talk about specifics. He did say that all options are on the table, apparently everything from a consent decree to changes in how leaders are elected to make the process more democratic.

“This isn’t a situation where the Justice Department would just impose its demands on the union, right? This has to be an amicable discussion if and when we're going to get there," he said. "Again, this is down the road. These things have to be discussed, talked about and, you know, have good negotiations."

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The UAW has announced reforms recently, related to ethics and finances, but Schneider said the union has not reached out to him. And he was critical of the UAW's recent filing of union charges against Jones and Pearson in an attempt to oust them, noting that they included information not provided to investigators.

“In any matter where crimes have been committed, we expect the American citizens to reach out to law enforcement. If there’s any crime, we hope that people report it. The UAW is no different. And we expect that if the UAW uncovers evidence of wrongdoing that they would report it to the FBI or to the U.S. Attorney’s Office or both. So when I read the Article 30 charges and there’s information in there that the Justice Department had not yet seen. That’s an indicator that somebody knew of wrongdoing but did not report it, and that, going forward, should not happen," Schneider said, declining to say what specifically in the charges was new to the government.

Those charges suggest the high life of swanky dinners, trips and stays at fancy locations and include the shocking news that Jones' daughter was allowed to stay at a town home the union paid for in Palm Springs, California, for a week in 2014 free of charge without any attachment to union business.

The UAW issued a statement highlighting the reforms the union has undertaken and insisted it is cooperating with the government:

"It's disappointing that Mr. Schneider does not yet recognize the UAW's sincere efforts at reform. After just three short weeks under Acting President Rory Gamble, the UAW has instituted a series of fundamental reforms. In fact, today the UAW announced significant accounting changes and financial controls that will tighten up our procedures and prevent future misfeasance. The UAW has, as recently as last week, expressed a willingness to further work with the government on the issues of concern. And we continue to cooperate in providing the government any and all records requested."

Schneider was also asked about the late FCA CEO Sergio Marchionne, who was blasted in a GM lawsuit accusing the automaker of corrupting labor talks for years, but Schneider declined to discuss him.

"We don’t charge or indict people who are deceased. He's deceased so therefore there's really nothing else that I can say about that," Schneider said.

FCA has called the suit meritless.

Contact Eric D. Lawrence: elawrence@freepress.com or (313) 223-4272. Follow him on Twitter: @_ericdlawrence.