Feds Probe UAW 'Flower Funds' in Broadening Corruption Case

Matt Posky
by Matt Posky

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]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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8 of 18 comments
  • ToolGuy ToolGuy on Mar 23, 2019

    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?

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    • Jatz Jatz on Mar 25, 2019

      @civicjohn 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.

  • Civicjohn Civicjohn on Mar 25, 2019

    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!

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    • Civicjohn Civicjohn on Mar 25, 2019

      @jatz 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... ,

  • Kwik_Shift_Pro4X I use a now discontinued Kuhmo AT tire that is surprisingly good in the snow, even in 2WD. However since most of my driving is on road, I'm going to look for a more highway friendly tire for smoother quiet. I'm sure it can still handle the forest roads leading to my fishing spots.
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  • THX1136 While reading the article a thought crossed my mind. Does Mexico have a fairly good charging infrastructure in place? Knowing that it is a bit poorer economy than the US relatively speaking, that thought along with who's buying came to mind.
  • Lou_BC Maybe if I ever buy a new car or CUV
  • Lou_BC How about telling China and Mexico, we'll accept 1 EV for every illegal you take off our hands ;)