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Former UAW President Pleads
516-308-1703
Guilty to Embezzlement,
516-308-1703
Racketeering Charges
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Gary Jones, who stepped down in November, is the 14th person convicted in yearslong federal investigation
United Auto Workers President Gary Jones was accused of conspiring with other union officials to embezzle more than $1 million.
PHOTO: REBECCA COOK/REUTERS
A former United Auto Workers president pleaded guilty Wednesday to embezzlement of union funds and racketeering, marking the highest-profile conviction yet in the government’s yearslong investigation into labor corruption within the auto industry.
Gary Jones, who left the top post in November during contract talks with the Detroit auto makers, was accused earlier this year of conspiring with other UAW officials to embezzle more than $1 million to pay for private villas, expensive cigars, golf outings and other luxuries.
The spending was then covered up with fake receipts and fraudulent expense reports, according to charging documents filed with a Michigan federal court in March.
Federal prosecutors say the alleged misconduct carried out by Mr. Jones and the other union officials spanned nearly a decade and was part of an illegal racketeering scheme that could potentially expose the UAW to federal oversight.
His conviction, now the 14th in the criminal probe led by the U.S. attorney’s office in Detroit, is likely to further strengthen the Justice Department’s hand in proving—as the government contends—that corruption at the UAW was widespread and systemic, said Peter Henning, a law professor at Wayne State University.
The 63-year-old Mr. Jones is the highest-ranking UAW official to be prosecuted in the federal investigation, which became public in 2017 and initially focused on misuse of funds for an employee-training center jointly operated by the UAW and Fiat Chrysler Automobiles NV.
During a live-streamed federal court proceeding Wednesday, Mr. Jones also pleaded guilty to tax fraud, in addition to the embezzlement and racketeering charge.
The charges carry a maximum sentence of up to 10 years in prison, but federal prosecutors are recommending a maximum of nearly five years with the possibility to reduce that sentence if Mr. Jones’s cooperation is significant.
“I apologize to my UAW family for the betrayal of their trust and pray they will forgive me,” Mr. Jones told the court during the hearing.
Matthew Schneider, the U.S. Attorney in eastern Michigan, has previously said the convictions raise the possibility that the government could seek oversight of the UAW.
PHOTO: DANIEL MEARS/DETROIT NEWS/ASSOCIATED PRESS
UAW President Rory Gamble in a statement condemned Mr. Jones’s actions and those of former union officials who have been convicted. Mr. Gamble said the union has implemented reforms aimed at preventing misconduct.
Mr. Jones was named president in 2018 and led the UAW through contract talks with General Motors Co. and Ford Motor Co. last fall, including calling a 40-day strike at GM that shut down the company’s U.S. factories and sent thousands of workers to the picket lines. He resigned before bargaining with Fiat Chrysler was finished.
Mr. Jones’s guilty plea is the latest blow to the nearly 400,000-member union, which has in recent years struggled to increase its influence and win back the trust of rank-and-file workers unsettled by the corruption charges. After first focusing on dealings between UAW officials and their counterparts at Fiat Chrysler, the federal probe has more recently centered on corruption within the top ranks of the UAW, ensnaring multiple high-ranking officials.
Matthew Schneider, the U.S. Attorney in eastern Michigan, has previously said the latest convictions raise the possibility that the government could seek oversight of the union—an approach that was used to force the Teamsters to sever ties with organized crime.
In a statement Wednesday, Mr. Schneider said that the guilty plea from Mr. Jones shifts his office’s investigation to a new phase that is focused on reforming the UAW, and that he plans to meet with Mr. Gamble to discuss possible changes. A UAW spokesman confirmed that Mr. Gamble plans to meet with Mr. Schneider.
The inclusion of racketeering in the charges against Mr. Jones and other UAW officials signals prosecutors are looking to build a case under the Racketeer Influenced and Corrupt Organizations Act, known as RICO, said Mr. Henning, the law professor.
“Gary Jones pleading guilty is very significant” because he was the president, the highest-ranking official at the UAW, Mr. Henning said. “Prosecutors can use this guilty plea against the union in a civil RICO case.”
A UAW spokesman declined to comment on the possibility of a RICO case against the union.
When Mr. Jones was charged earlier this year, prosecutors alleged that a group of UAW leaders, including Mr. Jones, established master accounts at hotels and resorts to pay for the personal use of private villas, high-end liquor and other luxuries. The spending was allegedly misrepresented as serving union business, including paying for conferences and meetings, according to court filings.
Mr. Jones resigned last fall as the UAW’s governing board sought to remove him over allegations he and another top union official provided false and misleading expense reports to the union’s accounting department. Mr. Jones’s lawyer at the time said he was leaving voluntarily.
Last August, Mr. Jones was one of several UAW officials whose houses were searched by federal agents. The California home of his predecessor, Dennis Williams, who served as the UAW’s president from 2014 to 2018, was also searched.
Mr. Williams hasn’t been charged with wrongdoing. His attorney hasn’t returned requests for comment on the search.
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