“The culture of corruption...is systemic.”
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The federal investigation into corruption among top UAW leadership led to a total of 16 convictions, including two former UAW presidents.
Former UAW President Gary Jones pleaded guilty to helping divert over $1 million from the UAW for his own personal use and the use of senior UAW officials. Former UAW President Dennis Williams has also pleaded guilty to his role in the scandal. He was sentenced to 21 months in prison.
According to the Detroit News, the investigation revealed a large-scale scheme where “UAW leaders embezzled money from worker paychecks, shook down union contractors and schemed with auto executives.” One top official even received $1.5 million in kickbacks, including $10,000 worth of cosmetic surgery for a relative. Other leaders were convicted of embezzling $1.5 million in union funds and spending it on personal luxuries, including golf outings, expensive cigars, and luxury villas.
In a settlement agreement with the federal government, the UAW agreed to be put under a federal monitor for six years in an effort to eliminate “fraud and wrongdoing within one of the nation’s most influential unions following a years-long crackdown on corrupt labor leaders.”
Independent Monitor Reports
On May 12, 2021, the United States District Court for the Eastern District of Michigan appointed Neil M. Barofsky as the independent Monitor of the UAW. The Monitor files a written report with the District Court at least every six months.
UAW officials are known for their expensive taste. While it may not always put them behind bars, union members may be shocked to see how the union leadership is spending at least part of their dues.
From upscale restaurants to expensive hotel stays, here’s just a few examples of the UAW’s spending habits between 2013-2018:
- Over $1 million on entertainment, including bars and casinos, professional sporting events, parties and liquor stores;
- Over $43 million on lavish stays at hotels and resorts;
- Over $12 million on travel including private jets, plane tickets, limousines and boat rentals;
- Almost $4 million on nicer restaurants, bar tabs, and catering.
While its officials were under investigation for fraud and embezzlement, the UAW constructed a 1,885-square-foot cabin for former president Dennis Williams (who has been implicated in the scandal with Fiat Chrysler) using interest from the union’s $721 million strike fund, which is bankrolled by worker dues. Hypocritically, the cabin was built with the help of non-union labor in an effort to save money.
The New York Times reported on rampant sexual misconduct at Ford’s Chicago plant–enabled and sometimes committed by UAW representatives. In a Chicago Tribune op-ed, one worker detailed a history of abuse and sexual harassment. When she attempted to report the abuse, she was threatened by her own union representative who allegedly tried to run her off the road, slashed her car tires, and came to her house to harass her.
These aren’t isolated cases. For instance, a female worker in Indianapolis claimed that her attempt to report sexual harassment at her workplace resulted in over a decade of harassment from the UAW. She was allegedly denied promotions, raises, and access to meetings and was eventually fired.
Eight workers filed a lawsuit against the Toledo Powertrain plant alleging widespread discrimination. The UAW local president Dennis Earl denied their claims and had this to say about accusations of racism at the plant: “Do I believe people are a little too sensitive these days? Absolutely.”
UAW membership declined drastically in 2018. Perhaps a culture where the interests of union leadership are prioritized over the well-being of members has something to do with it.
Dozens of auto plants represented by the UAW have closed over the years, putting the livelihood of thousands of employees in jeopardy.
- When a jointly-owned Toyota/GM plant in Fremont, California closed in 2010, 80 percent of employees signed a letter saying they believed the UAW mishandled the plant’s closure. The response of union leadership was to curse at these dissenting employees.
- In the late 1970s, German-owned automaker Volkswagen decided to produce cars in an unfinished Chrysler plant in Westmoreland County, PA. The company “assumed it would have to deal with the UAW, then at the height of its power as an industrial union and a force in American politics.” But VW faced trouble from the beginning, with “wildcat strikes and costly production shutdowns”–hallmarks of the UAW’s tactics. When the company decided to shut down the plant, it reported the plant “has been operating at less than half its designed capacity for the past five years.” Thousands of workers lost their jobs.
- Mitsubishi’s plant in Normal, IL, opening in 1988, and at its peak employed 3,900 people. But the factory’s UAW contract “weighed” on it, creating inefficient work rules and labor expenses. When the plant closed in 2016, the roughly 1,200 workers who were employed there no longer had jobs.