Robert Snell, Kalea Hall and Breana Noble
The Detroit News
Published 8:05 PM EST Nov 20, 2019
Detroit — United Auto Workers President Gary Jones resigned Wednesday amid a federal corruption investigation targeting him for embezzling more than $1.5 million in union funds, capping a steep fall for one of the country’s most powerful labor leaders.
Jones’ lawyer revealed the resignation to The Detroit News less than an hour after the union’s governing International Executive Board moved to remove Jones and UAW Region 5 Director Vance Pearson from their elected positions and expel them from the union.
“After much discussion with his family and friends, Gary has elected to resign his position as UAW president and retire effective immediately,” Jones’ lawyer, Bruce Maffeo, told The News on Wednesday afternoon.
“His decision to do so was reached before learning of the internal charges filed earlier today by the UAW and was based on his belief that his continuing to serve will only distract the union from its core mission to improve the lives of its members and their families.”
UAW spokesman Brian Rothenberg said Wednesday evening he could not comment on the resignation because he wasn’t sure if the union had received notice.
The resignation came two months after The News linked Jones to what federal prosecutors labeled a conspiracy to embezzle more than $1 million in union dues that were spent on personal luxuries in California and Missouri — and three months after federal agents raided his Canton Township home. The News also identified Jones last month as the unnamed UAW officer accused by federal investigators of helping embezzle $700,000 in member dues.
Jones, 62, has not been charged during the ongoing investigation.
Jones’ tenure lasted 17 months and coincided with an escalating corruption investigation that has produced 10 convictions and charges against 13 people, leaving one of the nation’s largest unions exposed to federal takeover.
The investigation and a prosecution that has lasted more than two years have revealed a culture of corruption within the top echelon of the UAW, including labor leaders receiving bribes and kickbacks designed to corrupt the collective bargaining process.
The UAW executive board’s filing of charges under the union’s constitution on Wednesday came on the same day The News reported that six UAW locals were calling for such charges to remove Jones and Pearson.
“The membership spoke loud and clear against the corruption,” said Christopher Budnick, a UAW member at Ford’s Kentucky Truck Plant who was part of that effort. “Jones resigning is the result of the collective efforts of the membership.”
Ken Larew, a member of the Local 1853 in Spring Hill, Tennessee, said he hopes the executive board’s move and Jones’ resignation show the membership that it has the power to change the union.
“The worst possible scenario is people lose faith in the union as a whole,” he said. “If you can chop the head off and show people that we have power, which we did today, then that boosts morale.”
The charges, signed by the entire union’s International Executive Board, allege Jones and Pearson directed the submission of false, misleading and inaccurate expense records to the UAW Accounting Department and further concealed the true information concerning those expenses, in violation of the UAW’s Ethical Practices Code and applicable federal labor laws.
The accusations echoed alleged crimes outlined by federal prosecutors in court records charging Pearson and other UAW officials with embezzling union dues, money laundering and fraud.
“This is a somber day, but our UAW Constitution has provided the necessary tools to deal with these charges,” UAW Acting President Rory Gamble said in a statement about the executive board’s action.
“We are committed at the UAW to take all necessary steps including continuing to implement ethics reforms and greater financial controls to prevent these type of charges from ever happening again.”
Gamble was named acting president on Nov. 2, the same day Jones went on paid leave. Pearson remains on paid leave; he has 15 days to develop a defense against Wednesday’s charges.
Jones’ resignation provided little comfort to Raymond Jensen Jr., a 20-year UAW member at General Motors Co.’s Tonawanda Engine Plant in New York.
“It infuriates me and makes me livid,” he said. “It’s not over. These guys need to be brought to justice, not only with the government, but with the UAW membership as a whole.”
Jones became embroiled in the scandal publicly in September 2018 when The News revealed how union leaders had spent more than $1 million on condominiums, liquor, food and golf in California, where Jones held annual conferences before becoming president.
Prosecutors in recent months have elevated the scandal from one involving allegations of Fiat Chrysler Automobiles executives and UAW officials breaking labor laws, to one involving outright thievery.
In August, a team of investigators from the FBI, Internal Revenue Service and Labor Department raided Jones’ Canton Township home as part of a nationwide search in four states targeting UAW officials and seized more than $32,000 from his garage. Jones was heckled by blue-collar workers days later while marching in the annual Labor Day parade in Detroit.
In mid-September, federal prosecutors accused him of helping orchestrate a conspiracy that involved embezzling member dues. The embezzlement allegations involved UAW leaders stealing money from worker paychecks and spending the money on private villas, expensive meals and $3,750 bottles of Louis XIII cognac.
The allegations emerged days before Jones ordered more than 48,000 union members to strike General Motors Co. auto plants.
Last month, prosecutors accused Jones and top aide Edward “Nick” Robinson of embezzling $700,000 in member dues and splitting the money. Three days later, on Nov. 3, Jones was placed on paid leave.
Scott Houldieson, a 30-year UAW member at Ford Motor Co.’s Chicago Assembly Plant who was helping to lead efforts to oust Jones and Pearson, was surprised by the president’s resignation but noted that pressure had been building.
“This is just the beginning of what needs to happen,” Houldieson said. “This can begin a process to restoring the union to the membership. All of us have put pressure on the International Executive Board to do what they should have been doing all along. It has taken this membership to do what’s right.”