Tag Archives: UAW

Corrupt UAW leaders embezzled $millions on champagne, cigars, golf and rental villas

Founded in the 1930s and headquartered in Detroit, Michigan, the United Automobile Workers (UAW) is a labor union representing workers in the U.S. and Canada in not just the auto and auto-parts industries, but also health care, casino gambling, and higher education. With more than 391,000 active members and over 580,000 retired members in over 600 local unions, UAW has 1,150 contracts with some 1,600 employersholds.

UAW is closely allied with the Democratic party, both national and in Michigan state. In the 2016 presidential election, UAW endorsed Hillary Clinton for president, calling her the “pro-worker leader,” never mind the fact that the Democratic Party had long abandoned the middle class and the working poor to become the party of the super-rich. (See my post of Oct. 22, 2019, “Democrats are now the party of the super-rich; Republicans, party of workers”.)

It shouldn’t come as a surprise that the UAW leadership is thoroughly corrupt.

According to the New York Times on Dec. 26, 2019, an investigation found that UAW officials had improperly used, i.e., embezzled millions of dollars from union funds. Although the present scandal, in direct financial terms, does not approach the scale of the corruption that plagued organized labor in the 1960s and ’70s, still the “consequences for the rank and file may take decades to tally fully.”

According to court documents, the embezzlement includes:

  • Gary Jones, 62, a union accountant who briefly was UAW president (June 2018 to November 2, 2019), spent more than $13,000 of the union’s money at a cigar store in Arizona on a single day in December 2015. His purchases included a dozen $268 boxes of Ashton Double Magnums and a dozen boxes of Ashton Monarchs at $274.50 each, which were part of more than $60,000 in cigars and cigar paraphernalia that Jones and other U.A.W. officials expensed to the union between 2014 and 2018. The cigar purchases were in turn just a small portion of the roughly $1 million in union money that court filings say UAW officials spent on golf outings, four-figure dinners and monthslong villa rentals during regular retreats in Palm Springs, Calif., and elsewhere. In August 2019, federal agents raided Jones’ home in Detroit and hauled away more than $30,000 in cash. Jones resigned last month as president and is on a paid leave-of-absence.
  • Dennis Williams, 66, a former welder who was Jones’ predecessor as UAW president from 2014 to 2018, celebrated a 2015 UAW-Fiat Chrysler labor agreement in 2015 with a $7,000 dinner paid for by the company, according to court documents. The agreement was rejected by the union’s rank-and-file members. Williams is also accused of misusing millions of dollars from Fiat Chrysler funds meant for worker training as a way to pay for extravagant spending in Palm Springs and other places.

At the heart of the UAW embezzlement scandal, which dates back at least to 2013, was an elaborate hospitality tab known as the “master account.” Union officials opened such accounts at hotels like the Renaissance Palm Springs, the site of an annual series of conferences.

According to the federal complaint, union officials billed to this account not just rooms and food that they bought at the hotel but also a variety of other expenses weeks before and after the conferences, including:

  • Rental villas that were tucked away in a gated community and cost about $5,000 a month. According to the federal complaint, UAW paid for a monthlong stay for Dennis Williams at a villa in the winter of 2013-14, followed by more than three months at a villa in 2016.
  • Dinners that ran into thousands of dollars. The bill for one meal at LG’s Prime Steakhouse topped $6,500 and featured a $1,760 charge for four bottles of Louis Roederer Cristal Champagne.
  • More than $80,000 at the Indian Canyons Golf Resort in Palm Springs for green fees, shoes, golf bags, sunglasses, shirts and “fashion shorts,” which were shipped home to Michigan in a semi-truck.

Jones and Williams have not been charged and appear in court filings only as “Official A” and “Official B,” pseudonyms that two union officials told the NYT refer to them, a fact that other news organizations have also confirmed. Representatives of Jones and Williams rejected the accusations.

Ironically (or not), UAW president Dennis Williams (2014-2018) told fellow officials that he was a socialist.


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General Motors union workers to get $11k profit-sharing checks

Add this company to the growing list of companies handing out “crumbs.”
From NBC Los Angeles: General Motors announced Tuesday it made $12.8 billion in pre-tax profits in 2017, and the company said union-represented workers will receive profit-sharing checks of $11,750.
The company reported a net loss of $3.9 billion, driven primarily by a $7.3 billion accounting charge related to the recent tax reform and $6.2 billion charge related to the sale of Europe’s Opel unit. But without the expense the company posted record per-share earnings.
About 50,000 GM factory workers will get $11,750 profit-sharing checks later this month. GM’s profit-sharing checks are higher than its Detroit-area rivals. Ford announced in January profit-sharing checks of $7,500 for an estimated 54,000 UAW-represented employees, and Fiat Chrysler said it would pay its UAW employees an average of $5,500, the Detroit Free Press reported. Fiat Chrysler also said it would give U.S. workers, aside from senior leadership, $2,000 bonuses, according to the Free Press.
Excluding one-time items, GM made $9.9 billion, or $6.62 per share, the highest since leaving bankruptcy in 2009. The earnings beat Wall Street estimates. Analysts polled by FactSet expected $6.33 per share. Full-year revenue was $145.6 billion, which also beat estimates.
“The actions we took to further strengthen our core business and advance our vision for personal mobility made 2017 a transformative year. We will continue executing our plan and reshaping our company to position it for long-term success,” GM CEO Mary Barra said in a news release.
GM says the change in the U.S. tax code forced it to write down accumulated losses that it uses to avoid corporate income taxes. The assets went from $33.6 billion to $24 billion. Since the rate fell from 35 percent to 21 percent, the losses are worth less.

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