Prosecutor points to UAW “culture of corruption” as union officials face sentencing
By Shannon Jones
7 November 2018
A top ranking former United Auto Workers official convicted in the ongoing federal corruption investigation into illegal payoffs to the union by Fiat Chrysler is due to be sentenced Wednesday after pleading guilty to his role in the affair.
Keith Mickens has asked the court for lenient treatment, citing enormous pressure by the UAW apparatus to engage in corrupt activities sanctioned by upper echelon union officials. Mickens pleaded guilty to using credit cards supplied by the UAW-Chrysler National Training Center (NTC) in Detroit to make personal purchases in violation of federal labor law banning such activities.
So far seven people, including senior UAW and Chrysler officials, have been convicted in the scheme involving the diversion of upwards of $9 million in NTC funds to obtain favorable contract terms for Fiat Chrysler in national labor agreements. According to a report in the Detroit Free Press published Monday, more individuals could face federal charges soon in the federal investigation that has reached the top of the UAW.
In a sentencing memorandum filed October 31 relating to Mickens’ role, federal prosecutors noted the ongoing investigation has “revealed that there was a culture of corruption in the senior leadership of the United Auto Workers union. Leaders of the UAW viewed the National Training Center as a mechanism to take apparently unlimited and illegal payments from Fiat Chrysler for their own personal benefit, for the benefit of the union itself, and their own lavish entertainment.”
It notes that Mickens, the third highest official in the UAW’s Fiat Chrysler department, “became ensconced in that culture of corruption where acceptance of lavish entertainment and personal freebies, all paid for by the car company, was the rule rather than the exception.”
Attorneys for another former UAW official, Virdell King, an assistant UAW director in the Fiat Chrysler department, filed a sentencing memorandum October 30 asking for leniency for their client. Her lawyers noted that Johnson, like other staff members, was totally beholden to her UAW superiors and if she failed to toe the line could be “demoted, or worse, terminated from the International, and, if the person wants to keep the union job, sent back to the plants.” King is due to be sentenced November 13.
What worse fate could there be for a UAW official, than losing their cushy union position, with its six-figure salary and perks, and being sent back to work in an auto factory, where decades of union-management collaboration have created intolerable conditions?
The sentencing memo goes on to implicate Norwood Jewel, former UAW vice president for Fiat Chrysler, the successor of the late General Holiefield, asserting that both men asked their client to make illegal purchases using NTC funds. Jewell took early retirement from his post last January but has not been charged in the case. Jewell oversaw UAW negotiations in 2015 that resulted in a sellout contract initially voted down by Fiat Chrysler workers by a margin of 2-1.
A former top aide to Jewell, Nancy Johnson, has also pleaded guilty in the corruption case, admitting to using a NTC credit card to charge thousands in illegal personal purchases, including designer shoes, first class flights to California and limousine rides. She has agreed to cooperate in the federal investigation and faces a maximum of 18 months in prison when she is sentenced November 19.
Johnson named former UAW President Dennis Williams as a party to the corruption in the plea agreement she made with federal prosecutors last summer. According to Johnson, Williams told lower level union officials to use money funneled through training centers funded by Ford, General Motors and Fiat Chrysler to pay for union expenses, including entertainment and travel. Such payments are barred under federal laws relating to the prohibition of company unions.
Currently the UAW is building a luxury “cottage” for Williams at its Black Lake resort in the northern lower peninsula of Michigan. The residence will be 1,885 square feet and have 2 ½ baths, cherry cabinets with a “chocolate glaze finish” and walls covered with “white cedar shiplap.”
Delegates to the 37th Constitutional Convention in Detroit held in June designated the cabin for the use of Williams. The UAW would pay any costs associated with his stays.
UAW President Gary Jones, who replaced Williams in June, is being investigated in connection with some $1 million in expenses related to stays at luxury resorts in Palm Springs, California by union officials. According to Johnson’s plea deal, the UAW used union funds in 2014-2016 for “extravagant meals, premium liquor, multi-month stays at condominiums, multiple rounds of golf, for little, if any union business or labor-management purposes.” Jones was in charge of union activities in California during that period as director of Region 5.
The UAW has absurdly claimed that the bribery of top UAW officials involved in the 2015 contract negotiations and earlier talks going back to a least 2010 had no impact on labor agreements. In fact, the bribery revelations are but the tip of the iceberg in the incestuous relations between the UAW and the auto companies involving the joint training centers and a web of joint programs that have wedded the interests of the union to those of management, in the process completely separating the UAW from any connection to the defense of workers’ interests.
The joint training centers have evolved as a conduit for the funneling of billions of dollars into the coffers of the UAW since the 1980s. In the process the UAW has been transformed into an arm of corporate management, enforcing an unending series of concession contracts dictated by the auto companies.
All of the corrupt contracts signed by the UAW should be declared null and void. The continuing series of revelations underscore the necessity for workers to organize independently from the UAW to defend their interests. The Socialist Equality Party and the World Socialist Web Site Autoworker Newsletter urge workers to contact us for information and assistance in the construction of rank-and-file workplace and factory committees to take up the defense of their rights. These committees must unite workers in auto, steel, transportation, logistics, communications and education in the US and internationally in a common fight against the corporations. They must be based on a program of class struggle, recognizing that workers have distinct and independent interests from the capitalist owners and the two corporate-controlled parties, the Democrats and Republicans.
By Shannon Jones
UAW building luxury “cottage” for ex-president Dennis Williams
By Shannon Jones
29 October 2018
Reports that the United Auto Workers (UAW) is building an expensive, luxury retreat for former union president Dennis Williams are compounding already boiling worker anger over exposures of rampant corruption in the UAW leadership.
Several top UAW officials have already been convicted in the scandal involving the siphoning off of millions of dollars from union-management joint training funds into the pockets of union officials.
According to the Detroit News, the UAW is building a 1,885-square-foot three-and-one-half bath lakefront “cottage” at the union’s Black Lake Conference Center in northern Michigan. The residence designated for the use of Williams will feature granite countertops, a wood-burning fireplace, stainless steel appliances, a wine cooler and a patio overlooking Black Lake.
Blueprints filed with Cheboygan County in 2017 indicate that the “cottage” will also feature a stone veneer and an aged metal roof. The kitchen will feature cherry cabinets with a “chocolate glaze finish” and walls covered with “white cedar shiplap.” There will also be a hidden storage closet in the master bedroom, a feature sure to raise eyebrows given the large amounts of misappropriated funds pocketed by UAW officials.
The initial cost of the project was pegged at $285,000, a likely gross underestimate given the expensive finishing. A building contractor contacted by the World Socialist Web Site Autoworker Newsletter said, “I read the Detroit News report on Williams’ lake house. $285,000 for an 1,885 square foot house might be appropriate for a worker’s cottage that was finished with asphalt shingles, vinyl siding, modest windows, and laminate countertops. But this is a totally different animal.
“When you add antique copper roofing, stone veneers, a natural stone patio, picture windows, granite counters and cherry cabinets, the actual cost will easily be twice the amount they published. It’s luxury, not a cottage.”
A General Motors worker in the Detroit area contacted by the WSWS Autoworker Newsletter remarked, “With all the corruption going on you would think they would show some self-respect. It’s brazen. It’s back to the haves and the have-nots. That’s a pretty nice perk for just four years (as president). It’s ridiculous.”
Nancy Johnson, a former top aide to Norwood Jewell, who headed the UAW Chrysler department during the 2015 contract negotiations, has implicated Williams, who retired in June, in the UAW corruption scandal. Johnson and other Fiat Chrysler Automobiles (FCA) negotiators were involved in a $9 million bribery scheme involving the siphoning off of money from the UAW-Chrysler National Training Center (NTC) by Fiat Chrysler officials to influence contract terms while keeping the UAW “fat, dumb and happy,” according to statements by indicted FCA officials.
Seven Fiat Chrysler and UAW officials have so far been convicted in the conspiracy, with others, such as UAW Vice President for Fiat Chrysler Cindy Estrada, under investigation. Jewell has been questioned by FBI officials, but no indictment has been handed down so far.
In her plea deal with federal prosecutors, Johnson stated that Williams authorized the illegal transfer of funds from training centers operated by Ford, Fiat Chrysler and General Motors to pay for union expenses. These included travel, resort fees, golf fees, air travel, lavish meals, parties and limousine service. She said that Williams issued the directive in order to reduce pressure on the UAW budget.
Federal prosecutors have labeled the UAW and Fiat Chrysler as co-conspirators in the illegal scheme.
While workers have been saddled with endless concession contracts, two- and three-tier wage scales, the spread of part-time and temporary work, the elimination of pensions and erosion of health benefits, UAW officials have never had it so good.
At the UAW Constitutional Convention in June, delegates voted to hand top officers, including newly installed UAW President Gary Jones, 30 percent salary increases. At the same convention, delegates rejected calls to rescind the 25 percent dues increase imposed in 2014, supposedly to replenish the union strike fund, despite the fact that no strike was ever called.
Currently Jones is under investigation for $1 million in union expenses related to UAW conferences in Palm Springs, California between 2014-2016. The payouts were for extravagant meals, golf fees, premium liquor and extended condo stays. According to Johnson’s plea deal the expenses related to “little, if any, legitimate union-business or labor management purposes.” During the period in question, Jones was in charge of UAW business in California, one of the 17 states covered by his region.
Williams’ Black Lake “cottage” is being erected by the Union Building Corp. (UBC), a nonprofit run by the UAW, which according to the union’s most recent filing with the Internal Revenue Service, is headed by the former UAW president Dennis Williams himself. The entity’s form 990, submitted to the IRS, listed $119.7 million in assets in 2016. UBC is one of a myriad of shadowy nonprofits run by the UAW and International Executive Board members. A nonprofit run by the late UAW Vice President General Holiefield served as a conduit for laundering illegal payouts from NTC funds.
The Black Lake residence is listed by Williams as his home address on state registration forms for two boats purchased this year. The watercraft listed for about $92,000, according to the Detroit News .
One of the boats is a 24-foot Berkshire pontoon that is marketed as a bar boat designed for entertaining people on the water. Another boat is a Lund 1875 Crossover XS fishing and skiing boat. It features a 150-horsepower motor at an additional cost of $13,000.
The Black Lake resort opened in 1970 and features a lodge, a gym, an Olympic-size pool and a golf course. UAW officials use it as a getaway. Stays at the posh Black Lake facilities are also used to reward up-and-coming UAW officials. It requires some two percent of the union’s budget to operate annually. By contrast, strike benefits paid out in 2017 were just one percent.
The UAW paid out some $75 million in salary and expenses to its top officers as well as $39.5 million in benefits. Net assets were $1.07 billion in 2017, making it one of, if not the richest union in the US.
The Williams cottage is another glaring example of the complete disconnect between the UAW and the members it falsely claims to represent. Such an outfit cannot be called in any way a workers’ organization. From the factory floor to the president’s office, the UAW functions as an arm of corporate management, a labor subcontractor whose job it is to suppress workers’ grievances in order to ensure maximum production and profits for the auto corporations.
The recent contract rejection vote by Lear car seating workers in Indiana is only one of the latest signs of the simmering anger of autoworkers over endless concession contracts by the UAW. Workers looking for a way to fight are more and more realizing that this struggle must take a new organizational form.
Call for the formation of rank-and-file committees, independent of the UAW, to defend the interests of workers. These committees would wage a day in, day out fight to uphold workers’ interests against management and seek to unify workers across industries and national boundaries.
The massive corruption exposed among the UAW leadership is perhaps the most grotesque expression of the unions’ subordination of the working class to the dictates of the capitalist profit system and the full integration of these anti-working-class organizations into the structure of corporate management. It poses the necessity for the working class to take up a struggle for the revolutionary transformation of economic life on a new and higher basis, that is, the fight for socialism. The vast productive forces of society must be put at the disposal of the working class for the satisfaction of human needs, not private profit.
No comments:
Post a Comment