United Auto Workers Official Charged in Widening Federal Probe
Regional director accused of embezzling union funds, fraud, money laundering; charges come days before labor contracts expire
A high-ranking official at the United Auto Workers union was charged with embezzlement of union money on Thursday, as a federal corruption investigation into the union gains momentum just as contract talks with Detroit auto makers come to a head.
Vance Pearson, director of the UAW’s Region 5 office in Missouri, was charged with conspiring with other union officials to embezzle hundreds of thousands of dollars in union money, the U.S. Attorney’s Office said. Mr. Pearson, who is also on the union’s executive board, also was charged with fraud and money laundering.
Mr. Pearson is the first sitting union official charged in the yearslong investigation, which had previously ensnared former union officials and executives at Fiat Chrysler Automobiles NV and has since spread to the union’s General Motors Co. department.
“While these allegations are very concerning, we strongly believe that the government has misconstrued any number of facts,” the union said Thursday. “We will not let this distract us from the critical negotiations underway with GM.”
Mr. Pearson couldn’t be immediately reached for comment.
Last month, federal agents also searched the homes of UAW President Gary Jones and his predecessor, Dennis Williams, marking a significant escalation of the investigation. Mr. Jones led the Region 5 office before he became president last year. The union has said it is cooperating with the investigation and that there was no need for the search warrants. Neither man has been charged with a crime.
The charges against Mr. Pearson come two days before the UAW’s contracts with GM, Ford Motor Co. and Fiat Chrysler are set to expire. The union’s top officials are negotiating first with GM. Union leaders from GM’s factories across the country are expected to meet Sunday in Detroit for an update on the talks.
“GM is outraged and deeply concerned by the conduct of union officials as uncovered by the government’s investigation,” the company said Thursday. “These serious allegations represent a stunning abuse of power and trust.”
The Justice Department’s investigation has resulted in nine convictions, including a prison sentence for Fiat Chrysler’s former head of labor relations.
In a federal criminal complaint, Mr. Pearson, 58 years old, is accused of conspiring with other union officials to conceal lavish personal expenses, paid for with union money, during UAW Region 5 conferences held in California and Missouri between 2014 and 2018.
Mr. Pearson led UAW’s Region 5 office since June 2018, covering 17 states in the western and southwestern U.S. He was previously the office’s assistant director under Mr. Jones, who hosted Region 5 conferences when he served as director.
The gatherings typically lasted about a week, but prosecutors allege Mr. Pearson and other unnamed UAW officials paid for weeks- or monthslong trips to Palm Springs, Calif., with union funds. Some $60,000 in UAW funds spent there were falsely represented as part of the conference, according to Mr. Pearson’s charging document.
A scandal that began with what federal prosecutors say was a conspiracy by Fiat Chrysler executives to keep UAW officials “fat, dumb and happy” has now ensnared a range of union officials. Former UAW Vice President Norwood Jewell, who as a top-ranking official led bargaining with Fiat Chrysler, was recently sentenced to 15 months in federal prison after pleading guilty to violating the Labor Management Relations Act. Prosecutors revealed in his sentencing memo that Mr. Jewell had used union training-center funds to rent private villas in Palm Springs.
Prosecutors say Mr. Pearson and other UAW leaders bought more than $100,000 worth of golf clubs, golf clothing, golf balls and other accessories at various pro shops in California and Missouri. Investigators also claim to have uncovered evidence of designer clothing, steak houses, spa visits, exotic sports cars and high-end shotguns paid for with funds designated for worker training.
During the search warrant executed at Mr. Pearson’s office and home in Missouri, agents found dozens of cigars, high-end bottles of liquor, and tens of thousands of dollars in cash, prosecutors said.
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