Feds go after UAW: Unions, corruption and the capitalist state

By Martha Grevatt
September 4, 2019

At least a dozen FBI agents raided the Detroit area home of  International President of the United Auto Workers Gary Jones on Aug. 28. The raid is the latest episode in a four-year federal investigation into alleged corrupt practices in the UAW.

The FBI also raided the homes of former President Dennis Williams in California, Williams’ former top aide Amy Loesching in Wisconsin, and Region 5 Director Vance Pearson in Missouri, along with the UAW training center in northern Michigan and the Region 5 office in Missouri. The union’s Detroit headquarters has not yet been visited by the FBI.

The scandal in the UAW’s Fiat Chrysler Automobiles department actually hit the news in Detroit two years ago. Federal investigators claimed the company and the union colluded to divert funds from the jointly run National Training Center to benefit FCA executives and UAW leaders and staff.

The biggest share of the spoils — including a sports car and very pricey gold-plated Mont Blanc pens —  purportedly went to FCA executive Alfons Iacobelli, while a quarter million dollars paid off the mortgage on now-deceased former UAW Vice President General Holiefield’s suburban home. Iacobelli and Holiefield’s widow, Monica Morgan-Holiefield, were the first to be convicted and sentenced last year.

Company got contract concessions

Iacobelli told investigators that the company bribed UAW officials to get them to sell FCA workers on the 2015 concessionary contract. Holiefield’s successor, Norwood Jewell, who led the FCA negotiations, was also convicted of accepting bribes.

While acknowledging the culpability of “a few bad apples,” the UAW denies these corrupt dealings had any effect on negotiations.

UAW members are dubious. They know that under the current contract, FCA has been able to expand a third tier of workers categorized as Temporary Employees with lower pay and unequal benefits. They have no set schedule, working from one to seven days a week — or not at all. The TEs have no seniority and limited access to the grievance procedure, and they can be disciplined or fired at the whim of supervisors.

In addition, second-tier workers, those hired after October 2007, still do not have parity with their higher-seniority counterparts.

When FCA workers were asked to vote for the 2015 contract, after rejecting a previous contract that left two-tier intact, UAW negotiator Jewell and associates told them two-tier pay would be eliminated. In fact, there are now multiple tiers.

Shady dealings or not, the company walked away with a contract that held down labor costs and allowed FCA to make billions in profits.

New corruption charges

Now a former top aide to Joe Ashton, previously vice president of the union’s General Motors department, could face felony charges for taking kickbacks from vendors who sold watches and other trinkets given to members. Speculation is widespread that Ashton and his successor, current UAW Vice President Cindy Estrada, might be implicated.

The FBI is also investigating the union’s building a new multimillion-dollar home for retired President Williams on the training center grounds. The investigation of current President Jones centers on money allegedly spent on expensive food, liquor and housing for annual trainings held at a plush golf resort while he was Region 5 Director.

Additional charges could be filed if the UAW, under Williams, used union-company joint funds to offset union expenses, or if Williams or Jones used charities they created for personal gain.

Class collaboration: a corrupting influence

The UAW Constitution, Article 2, Section 1 names the union’s first goal: “To improve working conditions, create a uniform system of shorter hours, higher wages, health care and pensions; to maintain and protect the interests of workers under the jurisdiction of this International Union.”

How could this just aim become so twisted? What happened to this once-powerful union, with its origin in the fierce class battles of the 1930s?

To answer that, it’s important to consider the many decades of class collaboration on the part of UAW leadership. The underlying premise of their bargaining approach is that labor and capital have a common interest, a “partnership” — and that the well-being of union members can only be maintained if the union works to keep the company profitable and “competitive.”

This approach draws the union into a cozy relationship with management. Union leaders, who may have started out idealistic and altruistic, begin to think like the capitalists they partner with, aspiring to the same lifestyle excesses and prone to ethical lapses.

Union leaders become salespeople for contract concessions — also known as takebacks — from the workers. This happens even in the absence of outright bribery. But clearly the situation can degenerate to where union leaders are literally bought off.

With the current FBI investigation and raids, rank-and-file trust in the leadership has been seriously eroded. The scandal has not helped organizing efforts, and it may have influenced the recent failed representation elections at Nissan and Volkswagen.

Here is another example of what so-called partnership leads to. While vice president, Ashton represented the UAW in a mediation between GM and the Association of Injured Members and Ex-Members of GM Colmotores (Asotrecol). These were GM workers in Colombia who were fired after they were injured. Ashton had a unique opportunity to build cross-country auto worker solidarity. Instead he tried to get Asotrecol to accept an agreement that didn’t cover all their medical bills, pay them workers compensation or get their jobs back, essentially turning them into street vendors for survival.

Does the FBI have union members’ best interests at heart?

The raids by the capitalist state occurred only weeks before the expiration of UAW contracts with Fiat Chrysler, General Motors and Ford. Negotiations are underway, with pressure from the rank and file to reverse concessions, eliminate pay tiers and undo GM’s plans to close plants in Ohio, Michigan and Maryland.

President Jones has indicated a mild willingness to strike over these issues. Strike pay was increased in March, and the union made “strikes and bargaining” training available to all union members. While not enough, this is more than had been done during earlier negotiations.

The rank and file completed strike authorization votes on Aug. 28, the same day as the FBI raids. Votes at FCA, GM and Ford show 95 percent or more in favor.

So the timing of the raids, which, according to the Aug. 31 Washington Examiner, “could lead to the filing of a civil racketeering lawsuit and federal oversight of the UAW,” hardly seems coincidental.

Unions have not fared well under the current U.S. president. Appointees to the National Labor Relations Board have been drawn from union-busting law firms and have made a number of anti-worker rulings. Public sector workers have been attacked in executive orders. The Labor Department has made it easier for companies to evade wage and hour laws.

Could any good come from federal oversight? How can the FBI, a repressive arm of a capitalist state with a neo-fascist at the helm, suddenly be a friend of labor?

A double standard

Both the Detroit News and the Toledo Blade have run editorials calling on the UAW leadership to resign. Many UAW members are sharing the editorials on social media.

But there is a media double standard here. Where are the calls for corporate heads to resign? Their crimes are far more damaging to people and the planet. What about the crimes of Big Oil and Big Pharma? Or, speaking of the auto industry, what about the deaths caused by GM’s faulty ignition switches?

It may be true that workers’ hard-earned dues were misspent by UAW officials for personal aggrandizement or that leaders were bought by the companies and sold out the members. Those guilty of such betrayals should not be labor leaders.

Nevertheless, it’s pure hypocrisy to editorialize about a union official’s self-serving behavior while overlooking death and destruction dealt out by the capitalist class.

Like the state, the corporate media are not trustworthy allies. Workers who want to turn their union around have to find the will and the means to do it themselves.

Fight the boss!

Many rank-and-filers are glad to see corrupt leaders in jail, but distrust federal interference. The strong vote in favor of a strike indicates that workers are united around fighting for a contract that restores pay equity and keeps plants open.

Whatever happens to the current UAW leadership, the real contract leverage is the power of plant workers at the point of production.

Strike fever is in the air in the U.S., thanks in part to militant teachers and education workers who defied state governments and pushed their hesitant leaders.

Even workers who don’t have a union are walking out at Google, Uber, Lyft, Wayfair, Amazon, American Airlines and McDonald’s, raising workplace issues such as safety, wages, racism, sexual harassment and also labor solidarity issues such as Wayfair’s collusion with Immigration and Customs Enforcement. Some union members are joining the youth–initiated Global Climate Strike later in September.

A strike at FCA, Ford or GM — or all three — over contract issues would accelerate the strike momentum in the U.S. Autoworkers also need to look beyond immediate economic demands and be ready to practice “social movement unionism” to fight on a range of issues, from the climate crisis to attacks on migrants to the super-exploitation of the global working class.

Eight years ago this paper said the UAW had two choices: “class struggle or suicide.” Militant class struggle is the antidote to corruption. That, in solidarity with workers across all borders, will build system-changing worker power.

Grevatt retired after 31 years on the line at Fiat Chrysler Automobiles. A former Vice President of Pride at Work Michigan, she is a Trustee of UAW Local 869.