Detroit — Federal prosecutors Thursday charged former United Auto Workers President Gary Jones with embezzling more than $1 million, according to a criminal filing that indicates he will plead guilty and cooperate with an investigation that could lead to the government seizing control of one of the nation's most powerful unions.
Jones is the highest-ranking UAW official charged during a years-long crackdown on corruption within the U.S. auto industry that has produced 13 convictions and revealed labor leaders and auto executives broke federal labor laws, stole union funds and received bribes. The investigation has pushed the UAW to the brink of a federal takeover being considered by prosecutors to root out pervasive corruption.
Jones, 63, was charged in a criminal information, which indicates a guilty plea is imminent, following months of increasing pressure from investigators. The investigators are armed with bank records and cooperation from several Jones aides who admitted helping embezzle money from rank-and-file workers that was spent on personal luxuries, including private villas, lavish travel, food, liquor and golf.
“Jones is a guy who contributed to taking down the union and now he may cooperate in a process that saves the union from its leadership,” said Erik Gordon, a University of Michigan business professor.
“This could be a favorable development for the union, if by union you mean all the people who get up at 5 a.m. and go to work everyday, as opposed to the people who sun themselves at resorts," Gordon added.
U.S. Attorney Matthew Schneider and other federal officials are expected to discuss the criminal case during a 1:30 p.m. news conference in downtown Detroit.
The criminal case culminates a tumultuous period and marks a prolonged fall for a labor leader who ascended to the top of the UAW two years ago, vowing to reform an embattled union. Since August, federal agents have raided his home, searched his bank accounts, seized more than $32,000 and portrayed him as a thief who tried to cover up crimes and obstruct investigators, according to court records that identified him by the alias "UAW Official A."
Jones is facing two charges, each of which could send him to prison for up to five years. The charges are conspiracy to embezzle union funds and using a facility of interstate commerce to aid racketeering activity, and conspiracy to defraud the U.S. His lawyer declined comment.
Jones is expected to cooperate with ongoing investigations of past President Dennis Williams, current President Rory Gamble and former Vice President Jimmy Settles, The News has learned.
After leading a 40-day strike against General Motors Co. that cost the automaker $3 billion, Jones resigned in November as the union's governing International Executive Board moved to revoke his membership and distance itself from the embattled president.
Jones was first publicly linked to the scandal in September 2018, less than three months into his tenure. That's when The News reported that federal investigators were questioning UAW officials spending almost $1 million on condominiums, liquor, food and golf in California, where Jones held annual conferences before becoming president.
The investigation escalated last August when teams of federal agents launched a series of nationwide raids, including searches at the homes of Jones, Williams, a lakeside UAW retreat in northern Michigan and at locations in Missouri and Wisconsin.
Agents seized more than $32,000 from Jones' home and golf clubs similar to a set purchased with UAW money, prosecutors said. In ensuing months, Jones became a recurring figure in court filings — though never by name. Instead, prosecutors referred to him as "UAW Official A" and Williams, who has not been charged with a crime, as "UAW Official B."
Federal prosecutors implicated Jones in wrongdoing one month after the raids, accusing him and Williams of orchestrating a years-long conspiracy that involved embezzling member dues. More than $1 million was spent on private villas in Palm Springs, lavish meals, expensive liquor and $60,000 cigar-buying sprees.
The accusation dismantled an oft-repeated defense from a UAW spokesman that while union leaders bought $1,000 pairs of shoes, Italian-made shotguns and paid for $15,000 steak dinners with bribe money from Fiat Chrysler Automobiles executives, no member dues had been misspent.
In June 2018, Jones assumed the union presidency and ordered the union to tout him as a "reform president" whose "Clean Slate" agenda would implement changes to end corruption within the union and its company-funded joint training centers. Federal court filings would soon challenge Jones' reputation as a reformer who started staff meetings with a prayer.
At the UAW's special bargaining session that March in Detroit's Cobo Center, the union distributed a list of 10 reforms it would make that would aim to prevent further corruption. Called "The UAW's Clean Slate," it largely replicated reforms presented by Williams a year earlier — a list that included a three-bid process for awarding contracts, stricter oversight of staff expenditures, requirements for disclosing conflicts of interests and a gift ban.
After Jones formally became the 12th president of the international union, he made a rare appearance before the news media: "I am deeply saddened and irritated that some leaders in this union and some leaders at the auto companies exploited their positions to benefit themselves. It is my responsibility from this day forward to strengthen your trust in your union."
Instead, a continuing spiral of convictions and new details in federal court records portrayed a widening corruption scandal that implicated the past two UAW presidents, three former vice presidents, current and former regional directors and staffers in schemes financed by training center funds, member dues or both.
Jones joined the UAW in 1975 when Ford Motor Co. hired him at its glass plant in Broken Arrow, Okla. When the Blue Oval closed its glass plant there, he later transferred to its Kansas City Ford Assembly Plant and began to develop a reputation as a hard-nosed union official.
In 1990, former UAW President Owen Bieber and then-Secretary-Treasurer Bill Casstevens appointed Jones to the international staff. A certified public accountant, Jones was assigned to the union’s accounting department. A year later, the UAW named him its chief accountant, a position that helped him understand the money flows within the union.
From there, he was named top administrative assistant in 1995 to former UAW Secretary-Treasurer Roy Wyse. By 2004, he had been appointed assistant director of the UAW's St. Louis-based Region 5, then the union's largest geographic region stretching across 17 states from Missouri to California. After the death of Director Jim Wells in September 2012, Jones was elected director and then re-elected in 2014.
He served as Region 5 director until becoming UAW president in 2018. Despite his previous tour at Solidarity House, Jones was considered something of a fresh face at union headquarters in Detroit, untainted by scandal and disconnected from the culture of what one local president called "liquor and side chicks" in an interview with The News.
Former UAW local leaders in Region 5 recall Jones as a distant leader who had local leaders handle problems through representatives at the region's satellite offices. He always had his crew, particularly former aides Vance Pearson and Nick Robinson — both convicted in the continuing crackdown — at his side.
Jones became president after securing the support of the Reuther Administrative Caucus, a sort of political party that had essentially controlled appointments to top UAW leadership positions since the late 1940s. He was an unusual choice.
Under UAW tradition, vice presidents who've led one of the union's three automotive departments have ascended to the president's seat, said Marick Masters, a professor of business and the former director of labor studies at Wayne State University. Jones appeared to be an outsider at a time when the federal investigation was heating up with authorities labeling the union and Fiat Chrysler as co-conspirators in the widening scandal.
Jones is a CPA, one of the "principal reasons why he was able to catapult himself over nominal front-runners," Masters said. Jones, he said, "was picked for this position because he was outside of the Detroit area, not implicated in the (corruption) and brought a background in accounting that I think people thought would get favorable public reviews."
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