Ex-UAW president pleads guilty; federal takeover of union still possible

DETROIT — Former UAW President Gary Jones on Wednesday pleaded guilty to federal embezzlement and racketeering charges, a landmark development in the yearslong corruption investigation into one of the country's leading labor unions.

Jones, appearing in U.S. District Court by video conference wearing a dark suit and navy blue tie, admitted to stealing money from the membership he was elected to lead.

"I recognize that my actions violated the law as well as my sworn obligation to my fellow union members," Jones, 63, said in a prepared statement. "I apologize to my UAW family for this betrayal of trust and pray that they will forgive me."

In pleading guilty, Jones promised to cooperate with investigators as they continue to probe the union for financial impropriety.

He could receive up to 10 years in prison, although the two parties said Wednesday they had agreed to a sentence of 46 to 57 months, or a little less than half of the maximum. If Jones provides substantial assistance, his time could be reduced further, prosecutors said. Sentencing is scheduled for Oct. 6.

Jones agreed to forfeit about $32,000 seized from his home last year, about $81,000 from his "flower fund" and about $31,000 from another union account. He also agreed to forfeit a set of Titleist golf clubs seized from his home that prosecutors said he bought with UAW money.

The guilty plea was delayed multiple times as the coronavirus crisis upended normal court procedures. Jones was arraigned by video conference last month, where he was released on a $10,000 unsecured bond.

Jones resigned from the union in November as the investigators zeroed in on him. He becomes the 14th person to plead guilty in connection with the federal investigation that has uncovered a wide-ranging conspiracy to steal union funds and spend them on expensive champagne, cigars and other luxuries. The scandal has snared two retired vice presidents in addition to a onetime top negotiator at Fiat Chrysler Automobiles.

U.S. Attorney Matthew Schneider, who leads the investigation, has indicated the probe is not yet complete and has not ruled out a potential federal takeover of the union. Rory Gamble, Jones' successor as UAW president, is attempting to avoid that fate by reforming the union from within, although Schneider has said those efforts don't go far enough.

"With UAW President Gary Jones' guilty plea today, we move into a new phase of the Justice Department's investigation of the UAW," Schneider said in a statement Wednesday. "While our criminal cases and the investigation of criminal conduct by individuals and entities continue, we will shift our focus to reforming the UAW so it serves the working men and women of the union first and foremost. I look forward to meeting with UAW President Rory Gamble as soon as possible to have these important discussions."

Gamble has indicated that he is open to speaking with investigators.

Gamble on Wednesday said the union is more powerful than one individual.

"Former President Gary Jones and others abused their high-ranking positions and violated the trust of our members. Their actions were selfish, immoral, and against everything we stand for as a union," he said in a statement. "As we close this chapter, we will continue to focus on implementing the necessary reforms to protect our members. Since my appointment as president, the UAW has instituted and operates under new transparency including far-reaching ethical and financial oversight and accountability. While these reforms are just the beginning, they are significant and will be expanded upon to ensure the crimes we've seen never happen again."

Schneider told Automotive News on Wednesday that a federal takeover of the union “absolutely” remains a possibility, although he’d like to hear how Gamble plans to further reform the union before making a decision.

“It’s always better to do things amicably,” he said in an interview. “It’s always better to do things to avoid litigation. That’s why we want to sit and talk. If we can avoid litigation, we should.”

UAW spokesman Brian Rothenberg, in an emailed statement, said: “President Gamble looks forward to meeting Prosecutor Schneider. The UAW has made significant changes since Mr. Jones resigned and continues to look at ways to reform.”

Schneider wants the union to consider direct election of officers, among other examples of “solid, significant reform.” He said the election changes could be accomplished through a court order, but stopped short of saying his office would seek one out.

Schneider declined to say whether any current union officers were under investigation or whether he expected more charges to come from Jones’ cooperation.

“The worker’s haven’t changed a bit; the leadership has,” Schneider said. “At some point, there was a pivot where the leadership, instead of working for the men and women on the line, the leadership decided to work for themselves and that’s exactly what we need to change.”

Prosecutors in March said Jones, aide Edward "Nick" Robinson, former regional director Vance Pearson and others were "involved in a multifaceted scheme to embezzle funds from the UAW." Robinson and Pearson also have pleaded guilty to embezzlement charges.

Among the abuses, prosecutors allege that Robinson supplied about $60,000 to Jones that included $15,000 improperly taken from the UAW Labor Employment Training Corporation. From 2010 through 2017, Jones deposited a portion of the money he received from Robinson into one of his personal accounts, according to the charges against him.

In 2015, the feds allege that Jones ordered more than $13,000 worth of cigars from Gary's Sales company in Arizona "in large part" for the use of UAW Official B, whom The Detroit News has identified as former UAW President Dennis Williams.

The purchase included 12 boxes of Ashton Double Magnum cigars, worth $268 per box, and Ashton Monarch Tubos cigars, worth $274 per box.

In 2017, the feds allege that Jones, Pearson, Robinson and others spent $539,608 on multiple golf resorts and hotels. They also spent more than $290,000 on condominiums, lavish restaurants, golf green fees, cigars, spa services, clothing, musicals, amusement park tickets and other luxuries.

Prosecutors said luxuries paid for with union money also included five sets of custom golf clubs and horseback riding on the beach.