UAW corruption scandal
reaches the top
27
July 2018
Reports that Dennis Williams, who retired as United Auto Workers
president last month, authorized the illegal transfer of funds from joint
training centers run by the UAW in collaboration with Detroit automakers
confirm the assessment of the World
Socialist Web Site and the Socialist Equality Party that the
UAW is an anti-working class organization.
In a plea deal released Monday, Nancy Johnson, the top assistant
to Norwood Jewell, the former UAW vice president for Fiat Chrysler, said that a
high UAW officer, identified by the Detroit
News as Williams, directed top union negotiators to use funds
from the Big Three joint training centers to pay for air travel, golf equipment
and resort fees, lavish meals and parties, limousine service, designer clothes
and shoes and other luxury items.
The UAW-Chrysler training center was the conduit for company
payoffs to the UAW in exchange for signing labor agreements over a span of more
than a decade that decimated the livelihoods and working conditions of FCA
workers. The bribery scheme violated federal laws dating back to the 1930s that
prohibit the setting up and funding of company unions.
In her plea deal, Johnson admits that she was authorized by a
high-level UAW official to use training center money to “pay for travel solely
for purported union business, as well as lavish meals and other entertainment
costs of senior UAW officials and their friends, families and allies. This
directive was issued in order to reduce costs to the UAW budget from such
expenditures because the UAW’s budget was under pressure.” According to unnamed
sources close to the investigation cited by the Detroit News, Nancy Johnson
said Williams authorized the payments.
At the UAW Constitutional Convention in Detroit last month, where
union executives approved a 30 percent pay raise for themselves, Williams told
the delegates, “To be clear: those who misallocated or misused training center
funds betrayed our trust. The UAW has zero tolerance for corruption, wrongdoing
at any level of this organization.”
He repeatedly claimed that the payoff scheme involved only a few
“bad apples,” and “There is simply no truth to the claim that this misconduct
compromised the negotiation of our collective bargaining agreement…”
In fact, the bribery scheme involved senior officials, including
Johnson, General Holiefield, Virdell King, Keith Mickens and others who were
directly involved in negotiating and enforcing contracts from 2007 to 2015.
From a legal standpoint, every one of the contracts signed by these corrupt officials
should be declared null and void.
The source of this pervasive corruption is not simply the
immorality and contempt for workers of individual union officials. It is rooted
in the political DNA of the United Auto Workers, which, along with the rest of
the official trade unions, defends the capitalist profit system and bases
itself on a nationalist program. The UAW cannot be reformed because it long ago
integrated itself into the structure of corporate management and the capitalist
state, sharing in the spoils from the exploitation of the workers in return for
suppressing strikes and imposing cuts in jobs, wages, benefits and working
conditions.
It is impossible for workers to defend their interests through
this criminal organization. That is why the Socialist Equality Party urges
workers to establish new, democratic rank-and-file organizations of struggle
completely independent of the union apparatus. The SEP urges workers to elect
factory committees to overturn the UAW-backed pro-company contracts and mobilize
all autoworkers to end the multi-tier system, restore all pay and benefit cuts,
establish workers’ control over line speed and health and safety, and rehire
all laid-off workers by reducing the work week to 30 hours with no loss of pay.
The latest revelation in the UAW corruption saga follows a series
of indictments that have led to guilty pleas by seven individuals, mainly
former UAW and Fiat Chrysler officials, for illegal payouts designed, as one
auto executive said, to keep the UAW officials “fat, dumb and happy.”
Johnson’s plea deal states: “In 2014, 2015 and 2016, in Palm
Springs, California, high-level UAW officials used UAW funds for extravagant
meals, premium liquor, multi-month stays at condominiums, multiple rounds of
golf, for little, if any union business or labor-management purposes.” The
company also paid the salaries of ghost employees at the UAW-Chrysler training
center, and a monthly 7 percent “administrative” fee to the UAW’s Solidarity
House headquarters.
Federal prosecutors have also investigated joint training centers
run by the UAW with General Motors and Ford, as well as the private foundations
of officials like UAW Vice President Cindy Estrada. According to the Detroit News report, so
many relatives work at the UAW-GM Center for Human Resources in Detroit that
the institution is known as the “Center for Hidden Relatives.”
This is just the tip of the iceberg. Since their advent in the
1980s, the joint training centers and a myriad of other corporatist schemes
have been conduits for billions of dollars in payoffs, sanctioned by the
passage of the Labor-Management Act of 1978.
How many workers lost their homes, suffered injuries on the job or
were driven to suicide as a result of the sellout deals negotiated by UAW
officials in the pay of the auto companies? In a succession of pro-company
contracts, the UAW imposed multi-tier wage scales, expanded the ranks of
super-exploited temporary part-time workers, and imposed the hated Alternative
Work Schedule, effectively abolishing the eight-hour day.
According to the most recent government filing, in 2017 the UAW
had net assets of $1,069,381,389, with total spending of $272,055,497. More
than 400 UAW officials make in excess of $100,000 a year, including family
members of top officers. Newly installed UAW President Gary Jones will make
$200,000, not including whatever money he gets for sitting on various corporate
boards, trusts, etc.
In 2015, Fiat Chrysler workers rejected the UAW’s sellout contract
by a 2-to-1 margin in the first rejection of a UAW-backed contract in three
decades. The UAW then spent $475,000 to hire BerlinRosen, a Democratic
Party-aligned New York City public relations firm, to mount a propaganda
campaign, including accusing the World
Socialist Web Site of “fake news” for exposing the truth.
Jewell and other UAW officials used lies, threats and intimidation, including
telling workers they would lose their jobs if they did not accept the deal, to
ram it through in a second vote.
At the time, the WSWS warned that the terms of the deal had been
dictated by management. This has now been proven true in a literal sense.
Autoworkers must begin now to organize factory committees to take
up the functions long ago abandoned by the UAW, and fight for the broadest
mobilization of the entire working class, in the US and internationally,
against the corporate war on workers. This building up of such committees in
all workplaces and neighborhoods must be combined with a new political
strategy, based on an international socialist program, including the
transformation of the giant auto companies and banks into public enterprises,
democratically controlled and collectively owned by the working class.
Shannon Jones
Top aide to former UAW vice president makes plea deal
By Shannon Jones
25 July 2018
Nancy Johnson, the top aide to former United Auto Workers Vice President for Fiat Chrysler Norwood Jewell, pleaded guilty Monday to charges related to ongoing investigation into illegal payments by Fiat Chrysler management to UAW officials, aimed at securing favorable contract terms.
The guilty plea by Johnson was part of a deal with prosecutors based on her agreement to cooperate in the federal corruption investigation. She is the seventh person to plead guilty in the case, which involves the siphoning off of at least $1.5 million in funds from the UAW-Chrysler National Training Center (NTC) into the pockets of union officials.
For her part Johnson admitted to receiving illegal funds transfers that she used for lavish parties, trips to California resorts and expensive personal purchases including jewelry and clothing. She could face up to five years in jail and a $250,000 fine. Sentencing is set for November 19.
Following the plea agreement, the UAW again claimed that the payoffs from Fiat Chrysler management had no impact on contract negotiations. In a statement released Monday the union asserted, “The UAW has taken strong measures to prevent a reoccurrence of this type of misconduct and our new leadership team continues to oversee improvements in our operations and financial controls.”
Johnson played a leading role in the 2015 contract negotiations with Fiat Chrysler. So far, four of the eight members of the UAW negotiating team have either been indicted or implicated in the illegal payouts, which were intended to keep the UAW “fat, dumb and happy.” The sellout deal provoked a rebellion by Chrysler workers, who voted down the contract by a 2-1 margin. The contract was then repackaged and forced through using threats and intimidation.
The plea deal by Johnson follows by two weeks the sentencing of Monica Morgan, the widow of General Holiefield, the late UAW vice president for Fiat Chrysler. Morgan received a token 18-month prison sentence on tax evasion charges for failing to report $201,000 in money skimmed from the NTC on her 2011 taxes. That represented only a fraction of the money stolen by Morgan, a well-connected Detroit photographer, and her late husband. Misappropriated money was used to pay off the $262,219 mortgage on their home and to buy tens of thousands of dollars in luxury items. Morgan helped funnel some $350,000 in NTC money into a fake hospice and pocketed another $80,000 for her photography business by invoicing for bogus courses.
Johnson is the third UAW official to plead guilty in the case. Two other assistants to Jewell, Keith Mickens and Virdell King, have also agreed to cooperate with prosecutors. Jewell took early retirement in January, but has so far escaped indictment. Johnson reportedly told King to buy a $2,180 shotgun for Jewell as a birthday present through the improper use of an NTC-issued credit card.
The federal investigation points to a far broader conspiracy reaching to the top levels of the UAW. As part of the plea agreement for former Fiat Chrysler executive Michael Brown, who helped administer the NTC, the government charged that Fiat Chrysler conspired with officials at the UAW and with the UAW itself to violate the Labor Management Relations Act. As part of the conspiracy, the UAW allegedly presented padded invoices to FCA for reimbursement of expenses connected to the NTC on behalf of UAW officials who did little or no actual work.
FCA management also authorized Holiefield and others to “offer sham employment status at the NTC to a number of their friends, family and allies” who were hired by the NTC under a “special assignment” status.
The crisis in the UAW takes place amid turmoil in Fiat Chrysler management, with the sudden incapacitation of CEO Sergio Marchionne, as well as signs of increasing militancy among rank-and-file workers.
Workers at three Kokomo-area Fiat Chrysler transmission plants, members of UAW Local 685, have voted overwhelmingly for strike authorization over local grievances. The workers build transmissions for virtually all the Chrysler vehicles built in North America. A strike at these facilities would quickly bring FCA production to a halt. While the UAW is absolutely hostile to a genuine struggle, intending to use the strike vote to merely adopt a militant pose, workers’ anger is simmering over the abusive treatment of temporary part-timers, who are being forced to work overtime in violation of contract provisions.
The newly appointed head of the UAW Chrysler department, Cindy Estrada, is herself deeply discredited. Estrada, who formerly headed the union’s General Motors department, earned the hatred of workers for imposing contract changes at the Lake Orion and Lordstown assembly plants allowing management to hire lower-paid contract workers to take jobs previously performed by regular GM employees.
Estrada is currently under investigation by federal authorities regarding the operation of a charity she heads. The Estrada Charity Fund received $139,032 from the UAW. One banquet in 2015 raised $357,506, including $322,206 in contributions from unspecified sources.
Phony charities run by Holiefield were used as a conduit for illegal payments from joint training funds. A charity run by Jewell, the Making our Children Smile Foundation, has also been labeled by prosecutors a conduit for misappropriated funds.
Seven top UAW officials who headed private charity funds, including Estrada, quietly allowed their state registrations to expire a year before the first indictment in the UAW corruption scandal.
The corruption in the UAW expresses the anti-worker essence of this organization. It is not the result of a few “bad actors” but illustrates the actual relationship between the auto corporations and the unions on one hand and the working class on the other. In the face of this reality workers have no alternative but to build their own organizations of struggle to take over the functions long abandoned by the unions.
The World Socialist Web Site Autoworkers Newsletter calls for the building of rank-and-file factory committees independent of the UAW to spearhead the defense of jobs, wages, working conditions and safety. These committees should fight for the nullification of all the contracts signed by the UAW and the restoration of all concessions, as well as workers’ control over line speed and safety issues.
GOP and Democrats Triple H-2B Visa-Workers to Almost 200,000
The GOP-run House appropriations committee voted to help business owners on Wednesday by tripling the resident population of wage-cutting H-2B workers to almost 200,000.
The H-2B visa-worker program imports roughly 66,000 seasonal workers each year, allowing seasonal companies to lower wages for American seasonal workers and for year-round staff and supervisors.
The new amendment will allow CEOs to hire H-2B workers from the two prior years without counting them under the 66,000 annual cap. That legal trick will give CEOs a population of up to 198,000 H-2B workers to help lower wages for a larger number of Americans — even though wages are climbing very slowly in the current good economy, and many younger Americans are far worse off than their parents.
The proposed H-2B population is huge — it is roughly equal to the number of new jobs added in a good month.
“The cheap-labor lobby never sleeps,” said Mark Krikorian, director of the Center for Immigration Studies. “The only solution is the elimination of the [H-2B] category.”
The measure was touted as a boost for company executives by Kansas Rep. Kevin Yoder, who chairs the homeland defense panel of the appropriations committee. “As our economy grows, we’re going to need workers to continue to provide a role … I support the amendment,” said Yoder, who also used the amendment process to promote easier asylum rules for Central Americans and easier migration for Indian and Chinese foreign technology workers.
The existing cap of 66,000 is too low for business owners, Yoder said, adding, “what we have now creates a lot of uncertainty, it cripples industries … You may be totally left out and be unable to find the workers you need to continue your business.”
Cooperating Democrats echoed Yoder’s description of the program as an aid for CEOs, not employees. “It is a business issue … It is now up to us to give our businesses what they need,” said Maine Democrat Rep. Chellie Pingree.
The H-2B program lowers salaries for Americans because it exempts CEOs from the normal need to compete for workers in the free labor market. Instead of bidding for workers with higher wages and benefits, or else buying American-built labor-saving machinery, the program allows CEOs to import seasonal workers from Jamaica, Mexico, and many other countries at lower wages than needed to hire Americans.
The program is widely used by urban landscapers, ski resorts, and coastal resorts but is also used by the government’s forestry contractors to avoid hiring the Americans who live in rural districts.
The amendment was drafted by Maryland GOP Rep. Andrew Harris, whose district includes a picturesque crab-picking industry that has changed very little in 140 years. The industry still relies on lower-wage women workers to carefully pick crab-meat from crabs, but it is vital to his district because it anchors a tourist industry of hotels, restaurants, home-maintenance workers and crab boats.
BLOG: "TEMPORARY WORKERS" and their extended families who NEVER go home again!
“This is not about immigration – it is about temporary workers,” said Harris.
Despite the crab pickers’ importance to Maryland, the local CEOs and the state government do not cooperate to offer any funds to help hire Americans in place of the foreign H-2B workers.
Harris’ measure would also change the allocation system so that the incoming H-2B workers would be shared among a wider variety of companies, instead of being awarded to lucky companies via a lottery.
However, the reform does nothing to allocate H-2B visas to companies which offer the higher salaries, or to the companies which can show the greatest shortage of U.S. workers, such as the high-risk shrimp-fishing industry in the Gulf of Mexico.
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