Less than an hour after the United Auto Workers’ international executive board voted to remove Gary Jones, accused by federal prosecutors of embezzling more than $1.5 million from the labor union, the UAW president tendered his resignation.
“After much discussion with his family and friends, Gary has elected to resign his position as UAW president and retire effective immediately,” Jones’ lawyer, Bruce Maffeo, told the Detroit News. The UAW confirmed his resignation on Thursday.
Jones’ resignation came three months after the FBI raided his home in Canton Township, a Detroit suburb, as part of an investigation into a conspiracy to divert more than $1 million in union dues to pay for personal luxuries in California, Missouri, and at the UAW’s northern Michigan retreat. There are additional allegations of money laundering and fraud.
So far, however, Jones has not been formally charged with any crimes, though indictments are expected.
At just 17 months, Jones’ tenure is the shortest of any UAW president. The period is marked by the corruption investigation that has now stretched to two years and has resulted in the conviction of 10 union and automaker officials, with an additional 13 people facing criminal charges.
The expanding investigation has revealed what some are calling a culture of corruption among UAW leaders that has included bribes, kickbacks, luxurious housing and travel, as well as embezzlement of funds earmarked for training. It was the misuse of funds for a UAW training center that originally sparked the investigation.
In addition to the criminal prosecutions, General Motors has now sued Fiat Chrysler Automobiles for racketeering, claiming that under the late Sergio Marchionne, Chrysler conspired to corrupt UAW leadership in order to persuade the labor union to leverage the shares it holds in General Motors to force a Chrysler-GM merger.
The vote to remove Jones came as the leaders of six UAW locals called for his dismissal and the removal of UAW Region 5 Director Vance Pearson, a Jones associate who has been implicated in the scandal and charged by the feds.
“The membership spoke loud and clear against the corruption,” Christopher Budnick, a UAW member at Ford’s Kentucky Truck Plant, told the Detroit News. “Jones resigning is the result of the collective efforts of the membership.”
“The worst possible scenario is [that] people lose faith in the union as a whole,” added Ken Larew, a member of Local 1853, which represents workers at GM’s Spring Hill, Tennessee plant. “If you can chop the head off and show people that we have power, which we did today, then that boosts morale.”
There are concerns that the corruption within the UAW is so widespread that federal officials may temporarily take over management of the union under federal labor law.
That may explain why the remaining UAW leadership is working hard to get ahead of the story. In addition to firing Jones, the union documented the submission of false and misleading expense records, which violated both the UAW’s Ethical Practices Code and federal law.
“This is a somber day, but our UAW Constitution has provided the necessary tools to deal with these charges,” UAW Acting President Rory Gamble said in a statement about the executive board’s action. “We are committed at the UAW to take all necessary steps, including continuing to implement ethics reforms and greater financial controls, to prevent these type of charges from ever happening again.”
Gamble was named acting president when the union put Jones on an involuntary leave in early November.
What started as an investigation into diverted training funds and broken labor laws ended up in the discovery of actual theft of union dues. In October, federal prosecutors alleged that Jones and his aide Edward Robinson split $700,000 in union dues that they embezzled.
The criminal investigation into union corruption was initiated after the Detroit News reported in September 2018 that union leaders had spent more than $1 million on themselves for food, golf, condominiums, and liquor (including $3750 bottles of cognac) at California resorts where the union held annual conferences during Jones’ presidency.