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Federal Prosecutors Ask UAW Members for Tips in Corruption Probe

14/12/2019 2:29pm

Dow Jones News


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By Nora Naughton 

Federal prosecutors in Detroit say United Auto Workers leaders aren't fully cooperating with the government's probe into alleged corruption, prompting them to appeal to rank-and-file members to come forward with any information.

Matthew Schneider, the U.S. attorney in eastern Michigan, accused the union's leadership of withholding evidence and information from his office, which is investigating allegations of bribery, corruption and other financial misconduct involving top-ranking UAW officials.

The criminal probe, which first became public in 2017, has resulted in 11 convictions so far, including two former union vice presidents.

Mr. Schneider, who is overseeing the probe, said UAW leaders haven't been as open as his office had hoped, and that is why his office is turning to the public.

"If we felt very secure we were getting all the cooperation we needed, there would be no need to reach out to the men and women of the union or to other people who have interaction with the UAW," he said in an interview Friday with The Wall Street Journal.

A UAW spokesman said in a statement that the union continues to cooperate in providing the government with any and all records requested and pointed to recent changes intended to root out corruption.

"The UAW has, as recently as two weeks ago, expressed a willingness to further work with the government on the issues of concern," the spokesman said.

The federal investigation into an alleged bribery scheme between union officials and Fiat Chrysler Automobiles NV has widened to other parts of the UAW, ensnaring several top officials and former union leaders. Earlier this month, Joe Ashton, a former UAW vice president and an ex- General Motors board member, pleaded guilty to conspiracy to commit wire fraud and money laundering.

Mr. Schneider said his office is continuing to expand the scope of its probe as investigators get more tips.

While much of the recent focus has been on UAW officials, Mr. Schneider said investigations of Fiat Chrysler, GM and Ford Motor Co. are still active. He declined to give details. The auto makers have said they are cooperating with investigators.

The expanding UAW probe became a dramatic backdrop during contract talks this year involving the three Detroit car companies, with Gary Jones abruptly resigning as UAW president late last month after leading a 40-day strike at GM.

Federal agents searched his home in August, and he faced pressure from members of the UAW's board to resign before contract talks heated up in September, according to people familiar with the matter.

GM has used the federal investigation as a basis for a federal racketeering lawsuit filed last month, alleging that Fiat Chrysler bribed union officials to gain more-favorable labor contracts. Fiat Chrysler has said it plans to fight the lawsuit, which it says is without merit.

UAW leaders said last month that an internal investigation found evidence that Mr. Jones spent union funds on personal expenses during trips to California and then sought to cover up his actions.

Mr. Jones's attorney didn't respond to a request for comment, but has said his client had planned to resign before learning of the union's allegations.

Mr. Schneider said the union failed to share new details on the alleged wrongdoing with his office. He instead first learned of it by reading it in newspapers.

"That's not quite complete cooperation," Mr. Schneider said.

Mr. Schneider said that since his office has started to speak up publicly, it has received tips from rank-and-file UAW members who say they have witnessed unlawful behavior. He declined to give more details.

The UAW, under the newly elected president, Rory Gamble, says it is making changes to address years of corruption. Among the changes is a move to disband a regional office in Missouri, which has been a focus of a federal probe. Mr. Gamble has also made changes including the creation of a new position to review complaints from members.

Mr. Schneider said it is too early to tell if the union's latest efforts are adequate.

As investigators with the Federal Bureau of Investigation, Labor Department and Internal Revenue Service continue to probe the union's financial dealings, Mr. Schneider said his office is considering various options regarding how to proceed, including the possibility of federal oversight of the union -- an approach that was used with the Teamsters to sever ties with organized crime.

"All of those options are still on the table, and none should be taken off," he said.

 

(END) Dow Jones Newswires

December 14, 2019 09:14 ET (14:14 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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