Former U.A.W. President Gary Jones Pleads Guilty

Former U.A.W. President Gary Jones Pleads Guilty

The former president of the United Auto Workers Union, Gary Jones, on Wednesday pleaded guilty to embezzling union funds, becoming the highest-ranking union official to admit wrongdoing in a wide-ranging federal investigation that has involved more than a dozen senior union officials and at least three executives from Fiat Chrysler.

Under a cooperation agreement reached with federal prosecutors, Mr. Jones, 63, acknowledged using more than $1 million in union funds for vacation rentals, golf outings, clothing, liquor and expensive meals. According to prosecutors, Mr. Jones spent some $60,000 just on cigars and smoking paraphernalia.

In hearing held via Zoom before the U.S. District Court for the Eastern District of Michigan, Mr. Jones admitted filing expense reports to the U.A.W. that concealed his use of union funds.

“While some of these expenditures related to union activities, others were personal in nature and did not relate to union business,” he said. “I recognize that my actions violated the law as well as my sworn obligation to my fellow union members.”

In a statement, the current U.A.W. president, Rory Gamble, said Mr. Jones and other union officials violated the trust of the union’s members. “Their actions were selfish, immoral, and against everything we stand for as a union,” he said.

As part of the plea agreement with prosecutors, Mr. Jones has agreed to cooperate in the investigation, and forfeit more than $140,000 in cash obtained illegally. He is scheduled to be sentenced Oct. 3. Federal guidelines call for a prison sentence of 47 to 56 months.

The U.S. attorney’s office in Detroit has agreed to seek a lesser sentence if Mr. Jones cooperates fully, said David Gardey, chief of the office’s public corruption unit.

The investigation has uncovered several loosely related schemes carried out by different union and corporate officials. In one case, a union vice president who once held a seat on the board of General Motors received kickbacks from the purchase of U.A.W. branded watches. In another, Fiat Chrysler’s top labor negotiator pleaded guilty to using union funds to buy a Ferrari and renovate his 6,800-square-foot home.

Details revealed in the investigation also led G.M. to file a lawsuit in November that accuses Fiat Chrysler of bribing union officials to get a leg up on G.M. in labor contracts. Fiat Chrysler has said the lawsuit is without merit.

The federal investigation into the U.A.W. began more than five years ago and is still active. Among those still under scrutiny is Mr. Jones’s predecessor, Dennis Williams. A plea agreement in February with a former aide to Mr. Jones indicated that a U.A.W. officer, whom court filings refer to as Official B, had urged using union money in ways that would benefit himself and other officials. Union officials have confirmed that Official B is Mr. Williams. The union also built a luxurious lakeside cabin for Mr. Williams at a U.A.W. resort about 250 miles north of Detroit.

A lawyer for Mr. Williams did not respond to requests for comment.

The U.S. attorney in Detroit, Matthew Schneider, has previously said that he could not rule out a federal takeover of the U.A.W. Another union that was the subject of a corruption investigation, the International Brotherhood of Teamsters, regained its independence in February after 30 years of federal oversight.

The investigation has dealt a big blow to the U.A.W. Mr. Gamble has apologized for its failings and has pledged to reform it. While the union no longer has the power and political influence it wielded decades ago, it remains one of the largest labor groups in the country and is a key player in the U.S. auto industry. The U.A.W. represents about 400,000 workers and is the biggest union at G.M., Ford Motor and Fiat Chrysler.

Mr. Jones pleaded guilty to two counts: for improperly using union funds and tax fraud for not reporting and paying taxes on that illicit income.

His plea agreement is the first time in decades that a union president of national stature has faced such serious criminal charges, said an expert on union corruption, David Witwer of Pennsylvania State University at Harrisburg. Professor Witwer pointed to the 1981 indictment of Roy L. Williams, president of the International Brotherhood of Teamsters at the time, on charges that he had conspired to bribe a senator in hopes of blocking or delaying a trucking deregulation measure.

Three years earlier, Joseph P. Tonelli, at the time the president of the United Paperworkers International Union and a top official with the A.F.L.-C.I.O., was charged along with other union officials for embezzling $360,000 from the union. Both leaders were later convicted.

The plea agreement marks a dramatic fall for Mr. Jones, who joined the U.A.W. as a welder and was elected president in 2018. Last year, he led workers through a 40-day strike against G.M. The strike yielded increased pay and benefits for temporary workers and those with less seniority, a key union goal. In exchange, the union accepted G.M.’s decision to close a plant in Lordstown, Ohio, a move that frustrated some U.A.W. members.

Mr. Jones took a leave of absence a week after that strike ended and resigned a few weeks later as the union moved to oust him.

Noam Scheiber contributed reporting.

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