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UAW reputation imperiled by FBI investigation

Nov 4, 2017

The United Auto Workers may be facing a crisis of credibility.

Credit the justice department. What started as an investigation into corruption at Fiat Chrysler’s union training center is now broadening to General Motors and Ford Motor. As my dad would say: This is no joke.

Credit Daniel Howes / Detroit News

For decades, the UAW enjoyed a reputation mostly free of financial scandal and corruption allegations. Now many of its ranking leaders and their charitable non-profits are part of subpoenas seeking records and raising one big question:

Who’s benefiting?

Even if the widening federal effort doesn’t culminate in more criminal charges, the publicity underscores a common narrative on factory floors: namely, that the union’s top leaders are more interested in enriching themselves than safeguarding the interests of their members.

That may not be fair. But it’s reality in a wired world that thrives on perception and belief, whatever the cold, hard facts. The UAW will learn that the hard way as the wheels of justice turn.

The first slug of criminal charges over the summer doesn't help. Fiat Chrysler’s top labor guy and the wife of a deceased UAW vice president were charged with corruption. The feds say they schemed to siphon off $4.5 million.

She got her mortgage paid off. He built an outdoor kitchen, bought a pricey Ferrari and grabbed two Mont Blanc fountain pens at $37,000 apiece. The list goes on and on, and the audacity is breathtaking.

This is not the existential crisis the union faced nearly a decade ago when two Detroit automakers collapsed into bankruptcy. This is potentially worse: a crisis of credibility the UAW can’t afford in an auto industry proving resistant to its latest organizing drives.

That’s why union President Dennis Williams declared himself “appalled” by the conduct detailed in last summer’s criminal indictment. He said, quote, “the abuses alleged ... dishonored the union and the values we have upheld for more than 80 years.”

Williams knows the damage corruption like this could do to the union. He also knows his history. When bargaining won more benefits for members after World War II, legendary President Walter Reuther warned against union officials managing piles of their members’ money.

History proved him right. Other unions, like the Teamsters, decades ago imperiled pension money in corrupt arrangements riddled by organized crime.

Not the UAW. The union revived Reuther’s legacy when it adopted the UAW Ethical Practices Code. It barred officers or representatives from accepting “‘kickbacks,’ under the table payments, valuable gifts, lavish entertainment or any personal payment of any kind....”

What it failed to do was prevent training center dollars from being contributed to charities controlled by union officers. And that confirms Reuther’s instinct: Corporate money earmarked for training union members should be professionally managed under strict financial controls. At the Fiat Chrysler-UAW training center, it wasn’t -- at least not until new policies finally were installed.

Imagine that.

Daniel Howes is a columnist at The Detroit News. Views expressed in his essays are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.