[Marxism] Behind a U.A.W. Crisis: Lavish Meals and Luxury Villas

Louis Proyect lnp3 at panix.com
Thu Dec 26 08:17:41 MST 2019


NY Times, Dec. 26, 2019
Behind a U.A.W. Crisis: Lavish Meals and Luxury Villas
By Noam Scheiber and Neal E. Boudette

On a single day in December 2015, Gary Jones, who resigned last month as 
president of the United Automobile Workers, spent more than $13,000 of 
the union’s money at a cigar store in Arizona. His purchases included a 
dozen $268 boxes of Ashton Double Magnums and a dozen boxes of Ashton 
Monarchs at $274.50 each. “Hi Gary, Thank you & Happy New Year,” read a 
handwritten note from the store.

The purchases, documented by a federal complaint filed against a union 
leader in September, were part of more than $60,000 in cigars and cigar 
paraphernalia that Mr. Jones and other U.A.W. officials expensed to the 
union between 2014 and 2018. And the cigar purchases were in turn just a 
small portion of the roughly $1 million in union money that court 
filings say U.A.W. officials spent on golf outings, four-figure dinners 
and monthslong villa rentals during regular retreats in Palm Springs, 
Calif., and elsewhere.

The scandal comes on top of an investigation into company and union 
officials’ improper use of millions of dollars from a joint Fiat 
Chrysler-U.A.W. training center. Mr. Jones’s predecessor as president, 
Dennis Williams, is accused of encouraging the use of Fiat Chrysler 
funds meant for worker education as a way to pay for the extravagant 
spending in Palm Springs and other places.

In direct financial terms, the scandals don’t approach the scale of the 
corruption that plagued organized labor in the 1960s and ’70s.

But the stakes are nonetheless enormous, given the U.A.W.’s outsize 
influence over auto manufacturing, a pillar of the United States economy 
that generates hundreds of billions of dollars in annual revenue and 
employs hundreds of thousands of workers. The union’s 40-day strike 
against General Motors this year cost the automaker an estimated $3 
billion in profit. Last month, G.M. contended in a lawsuit that Fiat 
Chrysler had bribed the U.A.W. to help it undermine G.M. by manipulating 
labor costs.

And no one in the union had more influence over the industry than its 
two flawed former presidents.

Mr. Williams, 66, who was president from 2014 to 2018, is a former 
welder and by most accounts a committed progressive, but also a man 
susceptible to the perquisites of power. According to court documents, 
Mr. Williams and his team celebrated a Fiat Chrysler labor agreement 
they negotiated in 2015 with a $7,000 dinner paid for by the company. 
The agreement was so disliked by rank-and-file members that they soon 
took the highly unusual step of rejecting it.

Mr. Jones, 62, a union accountant known both for asking colleagues to 
pray and for lashing them with profanity, is said to have used the 
illicit Palm Springs spending to win over union power brokers and help 
him secure the top job in 2018. As president, Mr. Jones led the U.A.W. 
into its recent G.M. strike just weeks after federal agents raided his 
house and hauled away more than $30,000 in cash.

Of the more than 15 current or former U.A.W. officials interviewed for 
this article, most declined to comment on the record, citing an ethos of 
silence at the union or a fear of retribution. But together with 
government documents, the picture they paint of Mr. Jones and Mr. 
Williams suggests a leadership that has at times aspired more to the 
role of fat cat than defender of workers. The consequences for the rank 
and file may take decades to tally fully.

“There was a culture of corrupt activities spanning years. That’s what 
we’re trying to turn around,” said Matthew Schneider, the United States 
attorney in Detroit, who is leading the investigation into the U.A.W. 
“The purpose of the union is not to serve the leadership. It is to serve 
the members.”

Mr. Jones and Mr. Williams have not been charged and appear in court 
filings only as “Official A” and “Official B,” pseudonyms that two union 
officials told The Times refer to them, a fact that other news 
organizations have also confirmed. In an email, Bruce Maffeo, a lawyer 
representing Mr. Jones, dismissed the accusations as stemming “from 
public documents in which Gary was not charged.”

A person close to Mr. Williams rejected the accusation, first reported 
in The Detroit News, that he urged the diversion and misuse of training 
center funds.

The ‘Master Account’

At the heart of the U.A.W. 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.

Union officials did conduct work at the meetings, including discussing 
contract enforcement and upcoming negotiations. But the gatherings also 
appeared to be a pretext for power brokers to enjoy a comfortable winter 
getaway.

Among the expenses charged to the master account were the villas, which 
were tucked away in a gated community and cost about $5,000 a month, and 
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.

Union officials also spent more than $80,000 at the Indian Canyons Golf 
Resort in Palm Springs for green fees, shoes, golf bags, sunglasses, 
shirts and “fashion shorts,” according to the complaint. They shipped 
many of these items home to Michigan on a semi-truck.

Mr. Williams, who was the U.A.W. president for much of this period, was 
often the gravitational center of the Palm Springs sabbaticals. 
According to the federal complaint, the union paid for a monthlong stay 
for Mr. Williams at a villa in the winter of 2013-14. Two years later, 
the union paid for more than three months.

In interviews, union officials said Mr. Williams would spend his days in 
Palm Springs conferring with aides and colleagues on the phone and in 
person, sometimes while playing golf. Nights were frequently given to 
socializing.

Two former U.A.W. officials recalled a night in which a few dozen 
people, including the wives of male officials, gathered at Mr. 
Williams’s villa for pizza. The men gathered around a fire on the back 
patio, where they smoked cigars, drank whiskey and discussed car 
restoration projects.

The federal complaint said that friends of Mr. Williams who had “no 
legitimate reason to attend” union events joined him in Palm Springs on 
the U.A.W.’s dime.

The arrangement helped create an in crowd and an out crowd at the union. 
Officials who were uneasy with the cigar-and-whiskey atmosphere in Palm 
Springs were left out and had more limited interactions with Mr. 
Williams. Three former officials said in interviews that they rarely saw 
him in Detroit during the winter.

Other U.A.W. officials spent far more time in Palm Springs over the 
winter, including those tasked with negotiating the union’s contract 
with Fiat Chrysler. These officials charged more than $25,000 in Palm 
Springs meals to the company in January 2015 alone, according to court 
documents.

A person close to Mr. Williams said that Mr. Williams was frequently 
traveling away from Palm Springs on union business during the dates in 
which the villas were rented on his behalf. The person also said that no 
one enjoyed special influence over Mr. Williams as a result of 
additional face time with him.

A Expansive Fief

According to documents filed by prosecutors, the orchestrator of the 
master account was Mr. Jones, the U.A.W. president who resigned in November.

Mr. Jones spent more than a decade as an accountant and senior aide at 
the union’s headquarters before 2004, when he became assistant director 
of the union’s Region 5, then one of 11 geographic units.

The U.A.W.’s regions are often run like fiefs, but Region 5, which was 
based in Missouri but sprawled all the way to the West Coast, was more 
fieflike than most.

According to two Region 5 officials, the region’s longtime director, Jim 
Wells, had a knack for extracting cash from members and staff, and there 
were few constraints on how he spent it. They said that under Mr. Wells, 
staff members were expected to buy a Region 5 jacket every four years at 
a cost of $1,000, ostensibly to support Mr. Wells’s campaign for 
re-election as director.

Elizabeth Bunn, who served as the U.A.W.’s second-ranking officer from 
2002 to 2010, said that under Mr. Wells, Palm Springs was known as a 
place where officials could enjoy themselves at union expense for well 
beyond the length of a conference, though the behavior may have been 
legal. Ms. Bunn also recalled facing internal pressure while 
investigating wrongdoing in the region.

“A lot of people saw things and did not react with the moral clarity 
that they exercised in every other situation,” she said.

Mr. Wells died in 2012. A U.A.W. press officer declined to comment on 
those complaints.

Mr. Jones did not appear to blanch at this culture of financial laxness. 
At least as early as 2010, according to court filings, Mr. Jones and a 
colleague began submitting receipts that had already been reimbursed, or 
that they had manufactured, to a fund that supports the union’s 
political efforts. The two men would split the reimbursement. Mr. Jones 
personally received hundreds of thousands of dollars from this scheme 
from 2010 to 2017, according to prosecutors.

After Mr. Jones became regional director in 2012, he took an active role 
in directing the Palm Springs spending, prosecutors have asserted. 
U.A.W. officials who wanted to play golf or buy golf apparel were told 
to charge the purchase to the Gary Jones “group,” and the bill would 
flow to the master account at the Renaissance Hotel. The hotel declined 
to comment.

A crucial purpose of the spending by Mr. Jones was to “curry favor with 
U.A.W. ‘Official B,’ who also enjoyed the lavish lifestyle,” according 
to the federal complaint, referring to Mr. Williams.

In interviews, three union officials said it was clear that Mr. Jones 
was courting Mr. Williams in order to succeed him as president. One 
Region 5 official noted that Mr. Jones, who was not previously a regular 
cigar smoker, turned himself into a cigar aficionado in the mold of Mr. 
Williams after becoming regional director. The official said Mr. Jones 
acquired a few humidors for the regional headquarters in Hazelwood, Mo.

Colleagues said that despite their expensive tastes, Mr. Jones and Mr. 
Williams were a study in contrasts. Mr. Williams told fellow officials 
in the 2000s that he was a socialist. As union president, he hired 
consultants to bolster the union’s organizing efforts in areas like 
higher education and technology, including those at the electric 
carmaker Tesla.

Mr. Jones, by contrast, appeared to be more conservative and less 
interested in new organizing opportunities. He blocked a promising 
effort to organize thousands of research assistants within the 
University of California system, according to two officials.

The officials said Mr. Jones feared that adding members in higher 
education would threaten his power base among blue-collar workers. When 
Mr. Jones would meet with graduate students, according to two Region 5 
officials, he would often joke that “my major was partying” as a way to 
belittle their academic experience.

In the end, the power of U.A.W. regional directors is such that Mr. 
Williams, normally a charismatic leader, was unable to move Mr. Jones on 
some of his top organizing priorities, three current and former 
officials said. Mr. Jones also later pushed to let most of the union’s 
Tesla organizers go.

“Gary started as a factory worker for Ford and dedicated over 40 years 
of his life as a member and officer of the U.A.W. to improving the lives 
of that union’s members and their families,” said his lawyer, Mr. Maffeo.

But Mr. Jones’s intransigence did not stop his ascent within the union.

When the union’s board discussed whom to back for president in fall 
2017, its members were aware that Mr. Williams supported Mr. Jones, 
according to several people close to the situation. They said the rest 
of the board quickly backed Mr. Jones as well, all but ensuring that he 
would take over the union at its convention the following June.

These people said in interviews that Mr. Jones was the only viable 
candidate by this point, but two also said that Mr. Williams’s support 
had helped ensure that this was the case.

Since Mr. Jones resigned as president last month, the U.A.W. board has 
replaced him with Rory Gamble, who previously oversaw the union’s 
negotiations with Ford. Mr. Gamble has put forth reforms to “deliver a 
clean union on solid footing” by the time he retires from the post in 2022.

They include regular audits of spending by programs run jointly with 
automakers, a new ethics officer and an ethics hotline. Mr. Gamble also 
announced that Mr. Jones’s former region would be split into two pieces 
that would each be merged into another region.

And he has indicated that he intends to press for more, unspecified 
changes. “We have a lot more stuff we’re going to be doing,” Mr. Gamble 
said in an interview.

But many current and former U.A.W. officials say that to be truly 
effective, the reforms must reduce the power of the union’s board 
members. They said that cozy relationships among union leaders may have 
led them to tolerate questionable behavior by one another.

Bob King, who was the union’s president from 2010 to 2014, confronted 
colleagues about improper training center spending, according to court 
documents. He said in an interview that he had not sufficiently 
scrutinized Mr. Jones’s former region, partly because he was focused on 
preserving unity among leadership.

“I do feel anger and responsibility,” Mr. King said. “I should have been 
looking at some stuff more closely. I would really encourage the current 
board to not make the same mistakes.”

Mr. King said he supported the union’s current reform efforts but urged 
it to go further. “They have to figure out how to create a system that 
is more open and transparent,” he said. “It’s not about a few bad apples.”

Matthew Goldstein contributed reporting. Susan Beachy contributed research.




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