Feds reach settlement deal in move to eliminate UAW corruption

Detroit — Federal prosecutors announced a proposed settlement with the United Auto Workers aimed at eliminating fraud and corruption within one of the nation's most influential unions following a years-long crackdown on labor leaders.

The proposed deal includes oversight of the UAW for six years and would let rank-and-file workers decide whether to alter the union's constitution to allow for direct election of future leaders. Such a constitutional change would be groundbreaking and give members the right to hold elections and directly vote for new UAW leaders for the first time in more than 70 years.

The deal — which awaits approval by a federal judge — also includes the appointment of an independent monitor to combat fraud within the UAW and decide whether to discipline or remove high-ranking labor leaders. At least two members of the UAW’s governing board have been linked to the ongoing investigation, including union President Rory Gamble and Vice President Cindy Estrada.

But in announcing the deal Monday, after spending part of the past year investigating ties between Gamble and one of the UAW's highest-paid contractors, U.S. Attorney Matthew Schneider said Gamble is "not a target" of the ongoing investigation.

"We're not investigating Mr. Gamble," Schneider said. "I don't have any reason to investigate Mr. Gamble."

The criminal investigation of individuals continues, but the deal concludes the federal government’s investigation of the UAW, Schneider said.

"Today is about justice," Gamble told reporters during a news conference in Detroit. "While this process has been difficult for us as a union, the UAW going forward is clean — and we are a better union because of it."

The union also is expected to pay costs related to the reform efforts — an expense that likely will total millions of dollars.

The deal is being announced in the waning weeks of the President Donald Trump administration and with the near-certainty that Schneider will leave office as the region's top prosecutor and be replaced by someone nominated by President-elect Joe Biden. There was speculation UAW officials would delay reaching a deal with prosecutors in hopes of reaching more favorable terms from a Biden administration.

The settlement comes amid an ongoing investigation of corruption that has pushed the UAW to the edge of federal oversight and led to more than a dozen convictions of auto industry figures, including former UAW presidents Gary Jones and Dennis Williams. Prosecutors and Gamble had been engaged in talks that have involved prolonged federal oversight to root out corruption within one of the nation's most influential unions.

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The ongoing investigation has uncovered a wide range of illegal conduct by auto industry figures, some scheming together, others acting on their own. The crimes uncovered include breaking federal labor laws, stealing union funds, receiving bribes and illegal benefits, and trying to cover up the crimes.

This summer, Justice Department officials proposed subjecting the UAW to 10 years of federal oversight, one of the longest periods of federal supervision in recent history. 

The appointment of an independent monitor overseeing UAW reforms is expected to be the linchpin of the agreement with the government. An agreement would settle criminal allegations that the UAW schemed with Fiat Chrysler Automobiles NV and others in a conspiracy to break federal labor laws and exchange bribes.

The election aspect of the deal follows support from a faction of UAW workers who have pursued holding a special convention to amend the constitution for the direct election of union leaders.

As the list of UAW leaders convicted of crimes has grown, members have called for international executive board members to be selected by "direct referendum elections" of the UAW membership — a sharp break with tradition. Currently, the rank-and-file elect delegates to represent them at a constitutional convention who vote for the leaders of the 13-member executive board.

For more than 70 years, a majority of those delegates have voted for the leaders recommended by the Reuther caucus, also known as the administrative caucus. The Reuther caucus has hundreds of members and currently includes all members of the UAW's executive board.

rsnell@detroitnews.com