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Jones charge is ‘straightforward embezzlement case,’ expert says

3 min read

DETROIT — The UAW, in the wake of federal corruption charges filed Thursday against former President Gary Jones, faces unprecedented scrutiny and new regulations moving forward as prosecutors continue to mull seeking Teamsters-style government supervision of the union, experts said.

“This is a straightforward embezzlement case; they stole money from members,” said Peter Henning, a law professor at Wayne State University.

U.S. Attorney Matthew Schneider has complained publicly that the UAW has not been cooperative throughout the investigation. And federal prosecutors expect cooperation — anything less is a bad signal to send from the UAW, Henning said.

Schneider said Thursday, “We aren’t taking oversight off the table. If it worked for the Teamsters, maybe it could work here.”

Art Wheaton, a labor expert from Cornell University, suggests that the UAW implement additional rules, government oversight and more transparency. The Department of Labor did just that on Thursday, announcing tighter rules on labor unions’ annual financial disclosures.

The government takeover of the International Brotherhood of Teamsters union forced out corrupt union officials. The government oversaw the union from March 1989 until 2015, and a five-year transition period followed.

Automotive News reported on the possibility of a federal takeover of the union nearly a year ago.

In theory, such an action against the UAW would force out senior leadership and implement the “clean slate” of leadership.

Schneider on Thursday also discussed the possibility of charges under the Racketeer Influenced and Corrupt Organizations Act, known as RICO.

What is RICO?

The criminal information states that Jones and other UAW officials are in violation of Title 18, the use of a facility of interstate commerce and of racketeering activity.

The act defines 35 offenses of racketeering including bribery, and allows the prosecution of all individuals involved in a corrupt organization.

The union also was implicated in a federal RICO suit filed last year by General Motors against Fiat Chrysler Automobiles. The suit contended that the late FCA CEO Sergio Marchionne bought the UAW’s support of an acquisition of GM. FCA denies the charges and is seeking to dismiss the case.

Henning also discussed the forfeiture allegations in the criminal information.

The government has the ability to take anything and everything from Jones, he said. They are going to be very aggressive, Henning said. Jones, 62, faces a maximum of five years in prison and a fine up to $250,000. He is cooperating with the government.

The UAW investigation isn’t over yet and the FBI continues to investigate other former UAW officials, The Detroit News reported.

Meanwhile, the UAW’s current leadership says it continues to reform the union’s operations.

In an interview from November, President Rory Gamble told Automotive News: “We need to do more in bringing integrity back to this union and regaining our members’ trust. We can’t do too much to protect this union. This organization is too important to too many people to fail.”

Erik Gordon, a law professor at the University of Michigan, said he hopes this is the end of the line of corruption at the UAW, but it’s hard to believe it will be.

He said: “You hope this is the end and the union can move on with being a union.”

Reuters contributed to this report.

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