By on March 22, 2019

Federal investigators are expanding their ongoing corruption investigation into the United Auto Workers and Detroit Three by taking a long look at donated money intended to buy flowers for member funerals. The concern is that the UAW’s “flower fund” may have been used as a slush fund to finance personal expenses for union officials.

It wouldn’t be the first time. Prosecutors have already secured the convictions of seven people via a probe into the UAW-Chrysler National Training Center. Several jailed union officials, along with former FCA-VP Alphons Iacobelli, helped investigators uncover illicit funds funneled through training centers and charities — including the Leave the Light On Foundation, created by the late General Holiefield. Now they’re helping the feds branch out. 

According to The Detroit News, the flower fund is just one of several avenues being explored right now. Investigators are keen to find out why UAW officials used almost $1 million of membership dues on meals, alcohol, condominiums, and golf in California — where former Region 5 Director Gary Jones held annual conferences before becoming UAW president last year — as well as uncover the source of that cash.

With Fiat Chrysler already implicated in the scandal, investigations broadened to probe to see if UAW leaders at General Motors and Ford ever received money or benefits through their tax-exempt nonprofits.

Flower funds were created initially to pool voluntary contributions from union members for funeral flowers and to finance union election campaigns. Use of the funds has drawn repeated scrutiny from federal and congressional investigators since at least the middle of the last century.

From The Detroit News:

In the ongoing UAW investigation, agents are questioning whether flower fund contributions became a mandatory job requirement and whether UAW executives spent the money on personal expenses and kept the rest upon retirement, sources told The News.

When UAW Vice President General Holiefield retired in 2014 as head of the union’s Fiat Chrysler Department, sources told The News he kept the more than $30,000 remaining in his flower fund. Holiefield died in 2015.

[Dennis] Williams also had a flower fund. A source said he did not keep money remaining in it when he retired as UAW president last summer.

Unsavory claims involving the funds have encouraged investigations of the UAW and other unions in recent decades, as they frequently involved workers in fear of losing their job unless they contributed part of their salaries. However, these probes rarely managed to find anything truly damning. But there is an alleged smoking gun. Those with knowledge of the investigation suggest that even if dozens of staff members contributed to a single flower fund, it would generate thousands of dollars in unreported revenue every single month — likely more than necessary to furnish funeral decorations.

Included in the flower funds of interest is the “Diamond Fund,” which sources say was controlled by retired UAW Vice President Norwood Jewell — who was slapped by federal prosecutors with union conspiracy charges earlier this week. Jewell is scheduled to plead guilty on April 2nd, but flower funds aren’t part of his case. While the UAW imposed a “gift ban” after prosecutors began indicting former UAW and Fiat Chrysler officials in the summer of 2017, it’s unclear whether voluntary flower donations were included.

Still, investigators are examining whether or not the donations truly were discretionary. Allegations have surfaced that union members were effectively bullied into giving a portion of their annual income to similar funds. Likewise, several UAW members wrapped up in the current scandal claim they were threatened by upper management if they refused to play the corruption game.

“The consequences of a failure to do as you have been told would have quickly led you back into a factory and to be ostracized by UAW leadership,” lawyer Robert Sheehan wrote in a court filing for former union official Keith Mickens.

Since investigators appear to be repositioning for another push, this may turn out to be a dead end. However, even if that ends up being the case, don’t expect the fed to give up on investigating the UAW or its relationship with manufacturers.

[Image: James R. Martin/Shutterstock]

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18 Comments on “Feds Probe UAW ‘Flower Funds’ in Broadening Corruption Case...”


  • avatar
    EGSE

    Humorous names for slush funds, shaking down members, coercion, skimming money, tax evasion…..change UAW to Gambino and this becomes a grand jury transcript for a Mob investigation. Sounds like RICO could apply here.

    When…..when….are the long-suffering members going to wake up?

  • avatar
    SCE to AUX

    UAW members should ask themselves exactly what their dues are buying.

    Here are two things they are not buying:

    1. Job security.
    2. Flowers.

    • 0 avatar
      redgolf

      As far as job security goes what business does offer a job for life? In a cyclical business like the auto sector at least employees (UAW members) are offered jobs at other factories, they may have to relocate but most if not all will get work and are given a relocation allowance to do it! It worked for me, now retired for 7 years with a pension and health coverage. So the old UAW cliché that stood for U Ain’t Workin can also stand for U Are Workin, sometimes ya gotta move to keep the pay and benefits!

      • 0 avatar
        mikey

        After 36 +years of service , 10 + years ago I walked out of the soon to be closed Oshawa GM plant. On the first day I punched the clock back in 72 I had over 20,000 colleagues . Rumour has it that by Jan 2020 there might just be 150 people left.

        My wife and I bought houses, raised kids, and paid for educations. Through good times, and bad times in one form or another ,a pay cheque came from GM. As you can probably deduct from my poor grammar, sentence structure etc, I have zero education…. (a life long regret)

        Yes… my pension is frozen forever, but I still have one. Benefits ? while not the gold plated one I was promised, are adequate . Was the UAW followed by the CAW self serving, bordering on corrupt ? I guess thats up for debate, but its sorta like the proverbial “water under the bridge”..Eh.

        The questions I ask myself would be one of “would I have been better off today without the CAW/UAW ? ” “Would I be in the position I am today ? Commentor ” redgolf “can give the words “GM Gypsy” a new meaning. Would he and his family be better served had he not not paid union dues

        I know the answers to those questions. So you’ll need to excuse me if I don’t join in with a UAW bash.

        • 0 avatar
          jatz

          “As you can probably deduct from my poor grammar, sentence structure etc, I have zero education”

          Horse hockey. You’re one of the most lucid commenters here and you’re still doing lifelong learning.

          You just haven’t paid tens of thousands for formal indoctrination to ensure you vote properly.

          • 0 avatar
            mikey

            @jatz…Thanks

          • 0 avatar
            jatz

            I’ve schitt into a 5-gallon in the back of my van because stopping between jobs was impossible.

            I’ve endured a mandatory graduate course in corporate governance taught by a fat British socialist with US lakefront property where he invited and doinked his major’s students.

            I recognize smarts where I find ’em. You’re welcome.

        • 0 avatar
          28-Cars-Later

          I think you’d be more regretful if you paid for what passes for “education” these days.

        • 0 avatar
          civicjohn

          @mikey,

          You should be extremely proud of what you did. I’m quite sure that your family would agree!

  • avatar
    Cactuar

    Some factory workers are addicted to opioid, some managers are addicted to money.

  • avatar
    ToolGuy

    How much money are we talking about – one million? I’ve heard the Feds know how to misappropriate the odd dollar or so as well.

    What will the investigation cost?

    • 0 avatar
      civicjohn

      @ToolGuy,

      Yes, the Feds do have a unique may of wasting money, as I’ll even use the language that writer Steph Willems used in a review last week of a SUV – “blowing through snow like a record producer”. While perhaps that cuts a little close to home for me, I certainly would use the analogy with respect to unions.

      My company actually received a grant from the Library of Congress to create standards for digital archiving and metadata for commercial records, that are now becoming more important than ever to help artists get paid in the streaming music business.

      One of the first things my Library of Congress liaison told me was that “you will begin to understand why the Federal Government buys $600 hammers”, and I saw some of that, but we managed our funds very carefully and didn’t misspend anything. In fact, where most of the Federal waste comes is from the “use it or lose it” budget process. When the end of the fiscal year comes up, if there are funds left unspent, they will lose them in the next year if they don’t spend them.

      So try and fix that, and get back with me when you decide that you’re OK with having your Social Security payments cut by 1%. 2/3 of the federal budget is “entitlements” that neither side wants to touch, and will soon consume 100% of our Federal tax receipts. Flippant comments about government discretionary spending, while they make great headlines for the 24/7 media, do nothing to fix the impending budget tsunami.

      Unions are a completely different animal. There should be NO unions for Federal, State, or local government workers, or even public school teachers. They know what they are signing up for, a reasonable job with reasonable pay and a nice pension plan and healthcare for retirement.

      Much of the expendible money goes to funding campaigns that are self-serving and don’t represent many of the members views. Private unions management fees are just a slush fund that do very little for the members. “Opiate crisis” notwithstanding, that’s just cover for saying we’re all in and we need the help for our members. Unless the vast majority of them are using heroin or fentanyl, there are legitimate needs for opiate management for chronic pain. I’m one of them, and I’m subject to a urine test and counting of my medication every 30 days, so I’m sick of being corralled as someone who can’t use them in a responsible manner. Union bosses are well documented as being caught with their hands in the union till, so let’s not conflate everything.

      • 0 avatar
        Erikstrawn

        “There should be NO unions for Federal, State, or local government workers, or even public school teachers. They know what they are signing up for, a reasonable job with reasonable pay and a nice pension plan and healthcare for retirement.”

        I live in Oklahoma. Our teachers definitely need unions, because the Republicans here actively bashed them, blamed them, and tried to defund education, right up until the teachers went on strike last year and got enough support to throw out half the legislature. Our teacher pension fund is chronically underfunded with the state failing to meet its contribution requirements every year. The class sizes are growing, parents keep undermining discipline, and the healthcare is “meh”.

        • 0 avatar
          civicjohn

          While the teachers were in college learning how to be teachers, did they bother to see what the salary range and benefits would be?

          • 0 avatar
            jatz

            You have to be familiar with the world of teacher education to grasp how many innocent, child-loving young people are attracted to it.

            Most of the poor fools never realize in time that kids are the last priority for teacher admin and government. The few that do become admin.

  • avatar
    civicjohn

    Agreed. I dated a girl in college that was studying to be a teacher. I would ask her if she knew that she wasn’t going to make too much money, but she wanted to “work with kids and help them out”. We ultimately went our separate ways, I saw her a couple of years after graduation, and she was sharing an apartment with another teacher. She ultimately fixed her situation by marrying a doctor and hasn’t worked a day since, so good for her.

    When it became time for my son to decide what career to choose (he has Aspergers), I tried to push him into coding, as I had researched and found out that Aspergers kids do really well with detail oriented jobs. However, he could draw completely accurate 3-D drawings when he was 4 (mostly the interior and exterior of homes and buildings), then he jumped into Lego buildings (I have a 12-foot table he coined “Lego City” to prove it), and Minecraft, so the writing was on the wall for him to choose architecture. I was scared as a parent, but he was accepted into one of the top 5 Architectural Schools in the US, and my family has a close relationship with the leading architecture firm in the state, and they also have offices in London and Tokyo, so he’s got a summer internship with them every year and he’ll be doing his senior overseas work at the London office, so I think he’ll be just fine.

    If it sounds like I’m bragging about him, maybe I am, but we made sure as a family that we could help him. And he’s not adding to the ridiculous student loan crisis – he has a job in the Architecture School Print Center – I thought he was running around breathing Xerox toner fumes, but he explained to me over the holidays that he helped students and professors download their projects from the cloud and routing them to the proper 3-D printer. Shows how much this old man knows!

    • 0 avatar
      jatz

      Brag on! That’s magnificent news about your son!

      I’ve mentored and promoted an Aspbergers lad in my workplace and have been richly rewarded. His focus, diligence and work ethic is simply off the charts.

      • 0 avatar
        civicjohn

        Why thank you, jazt. Yes I’m absolutely blessed. He just got back from Spring Break at St. Simons Island with Habitat for Humanity. While he did get to spend 2-3 days on the beach, they painted a bridge to stop the rusting, and repaired several houses. He called me before the trip, and I could hear the trepidation in his voice when he asked me if I could give him the $100 for the cost of the trip, which included an 8-hour bus ride, meals, and hotel. I have never sent an Apple Payment any quicker! As for me, I can’t even screw in a nail…
        ,


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