Top UAW official charged with embezzling union money on eve of auto contract talks
A United Auto Workers official was charged Thursday with corruption in an alleged scheme to embezzle union money and spend cash on premium booze, golf clubs, cigars and swanky stays in California.
Vance Pearson -- the director of the UAW’s Region 5 -- is accused of embezzlement, fraud, filing false reports and conspiracy. He was arrested Thursday and appeared in federal court in St. Louis.
His region in Missouri covers thousands of union members in more than a dozen states, including California.
The charges against Pearson are another blow to the union's reputation and comes just before national contracts with General Motors, Ford and Fiat Chrysler expire at 11:59 p.m. Saturday.
They are also certain to raise more questions about UAW President Gary Jones, who had Pearson’s job before he became the national president in June 2018. Pearson also worked under Jones as assistant director.
Vance Pearson (pictured) is the director of the United Auto Worker’s Region 5. He was charged Thursday with corruption in an alleged scheme to embezzle union money. (UAW)
Since 2017, nine people have pleaded guilty in an investigation that began with spending at the UAW-Fiat Chrysler training center in Detroit. Some are cooperating and providing key details to the government, Donohue wrote.
Jones hasn't been charged with any crimes. But the court document says golf clubs and more than $30,000 in cash were among items recently seized from the home of "UAW Official A." On Aug. 28, Jones’ Detroit-area house was searched by federal agents.
Pearson is the 10th person charged in an investigation of the Detroit-based union's finances. Most of the corruption cases so far have centered on a Detroit training center jointly run by the UAW and Fiat Chrysler, but the scrutiny now is much wider.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| FCAU | n.a. | n.a. | n.a. | n.a. |
| F | FORD MOTOR CO. | 13.05 | +0.10 | +0.81% |
| GM | GENERAL MOTORS CO. | 45.07 | -0.05 | -0.11% |
"The investigation has also uncovered a multi-year conspiracy involving senior UAW officials embezzling, stealing and unlawfully and willfully abstracting and converting UAW funds to purchase luxury items and accommodations for their own personal benefit," U.S. Labor Department agent Andrew Donohue said in a court filing.
"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," UAW spokesman Brian Rothenberg said. "Regardless, we will not let this distract us from the critical negotiations underway with GM to gain better wages and benefits."
The UAW has picked GM as a target company, meaning it will be the focus of bargaining and could face a strike by 49,200 union members if a tentative contract isn't reached this weekend.
In a strongly-worded statement, GM said it was outraged and concerned by the conduct of union officials outlined by the government.
"These serious allegations represent a stunning abuse of power and trust. There is no excuse for union officials to enrich themselves at the expense of the union membership they represent," the statement said.
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The criminal complaint against Pearson mostly focuses on UAW Region 5 conferences at resorts in Missouri and Palm Springs, California. The annual gathering in California was intended to train local leaders but Pearson and others "would spend weeks and/or months living in Palm Springs enjoying an extravagant lifestyle paid for with UAW funds," the government alleges.
Investigators uncovered a receipt for a New Year's Eve 2016 meal totaling more than $6,000, including four bottles of champagne for $1,760. They said there was evidence of a "culture of alcohol" in the senior ranks.
The Associated Press contributed to this report.