By on September 13, 2019

Image: UAW

Organized labor is helping keep the high-end cigar industry profitable, federal investigators implied Thursday. Following a years-long investigation into widespread corruption among the union’s upper ranks, agents arrested UAW Region 5 Director Vance Pearson yesterday, hitting him with charges of embezzlement, mail and wire fraud, money laundering, and conspiracy.

Pearson, 58, took over his position from current UAW president Gary Jones last year. Prior to that, he served as Jones’ right-hand man in the Missouri post. The charges laid against Pearson cite numerous unnamed officials who helped organize the embezzlement, with three sources telling The Detroit News that one of those figures is the big man himself.

Oh, and Detroit Three contracts expire Saturday night.

The sources claim Jones, pictured below, and former UAW president Dennis Williams are two of the four unnamed officials. Both men’s homes were raided by federal agents late last month.

 

In laying out its case, federal prosecutors claim Pearson and the other figures embezzled union funds during Region 5 conferences. The fraudulent expense reports allegedly rolled in during long-term stays at luxurious rented villas in Palm Springs, California, and other locales, with purchases covering everything you’d expect from fatcats living high on the hog. Hardly the image a union’s leadership wants to project to its members.

From The Detroit News:

The criminal case outlined a pattern of corruption stretching from California to Detroit and illegal spending by union leaders who spent more than $1 million of member dues on Palm Springs villas, steakhouse dinners, 107 rounds of golf, golf gear, cigars and $400 bottles of Louis Roederer Cristal Champagne.

Following Pearson’s arrest, the UAW issued the following statement:

“Our highest priority is maintaining the trust and confidence of United Auto Worker members. While these allegations are very concerning, we strongly believe that the government has misconstrued any number of facts and emphasize that these are merely allegations, not proof of wrongdoing. Regardless, we will not let this distract us from the critical negotiations underway with GM to gain better wages and benefits for the more the 400,000 members of our union.”

Allegedly, between 2014 and 2018, union officials gobbled up $60,000 in cigars, humidors, and various cigar-related paraphernalia, while another $100,000 went towards golf equipment and clothing.

In a release, prosecutors claimed, “Pearson and his co-conspirators used the conferences to conceal the use of hundreds of thousands of dollars in UAW funds to pay for lavish entertainment and personal spending for the conspirators.”

Nine UAW officials have been convicted since the corruption probe began in 2017.

The latest arrest comes as negotiations ramp up ahead of Saturday night’s contract expiry date. Bargaining talks kicked off between the UAW and General Motors, with that contract laying the groundwork for those with Fiat Chrysler and Ford. Forging labor peace for the next four years is not expected to be easy, certainly for an industry in the midst of aggressive streamlining efforts. Late yesterday, GM issued a statement saying, “There is no excuse for union officials to enrich themselves at the expense of the union membership they represent.”

To say there’s a cloud hanging over these talks would be an understatement.

[Images: UAW]

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7 Comments on “UAW Director Arrested As Sources Finger Union Prez...”


  • avatar
    Lokki

    This is bad news for GM. The Union cannot settle for a small increase under these circumstances as it would make them look complacent and compliant to management…along with the current accusations of corruption, this would hurt the union badly.

    Sooo… the Union must prove they can bring home the bacon. Whether GM actually has any bacon to give is a secondary consideration. I expect a long strike.

    • 0 avatar
      SCE to AUX

      IMO, GM could hold out for 4 – 6 weeks without much trouble.

      The rank and file *have* to be rethinking the value of their union dues, especially since they don’t actually provide them job security.

      The non-union transplant workers are doing just fine, and they get to keep their paychecks without their organization being dragged into the headlines or the Federal court system.

      In the long run, GM and the others will do whatever they want with their plants. The best the union can do is negotiate better exit terms.

  • avatar
    Rick Astley

    If there is one thing I learned from observing and researching the GM “bankruptcy” and UAW’s actions, it’s that the UAW has no qualms with acting in a way which will directly lead to the failure of GM.

    And that GM has absolutely no qualms about being complicit in that while the golden parachutes are neatly packed, with departing gifts and Swiss bank accounts at the ready.

    These charges (or sentencing) will do nothing to change UAW’s culture, there is the next generation of slimeballs who have spent their entire career slowly working up the ladder and learning how to entrench and enriched themselves in the UAW corporate culture. It just means that more complex schemes and frauds will be used going forward.

    And why not? The Government has played it’s hand, it will violate almost 100 years of bankruptcy law in equally corrupt negotiations to keep these moribund shills afloat at any cost to the taxpayer.

    Ultimately when it comes to UAW and Ford/GM negotiations, I simply want to know what the next cost to taxpayers is, they are the only player at the table who loses to the house.

  • avatar
    ToddAtlasF1

    Organized Labor is short for Organized Crime Exploiting Labor. None of these stories will change the minds of its advocates, which tells you everything you need to know about unionization defenders.

    • 0 avatar
      dal20402

      Kind of like how near-daily stories about the remarkable, unprecedented corruption of the current president don’t ever change the minds of his defenders.

      At least the vast majority of union people are saying the conduct of these UAW leaders is Not OK.

  • avatar
    dusterdude

    So nice to see the UAW leadership are being responsible stewards of the union dues !

  • avatar
    SharkDiver

    Union fraud is a redundant term.


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