The FBI and IRS raided the homes of United Auto Workers President Gary Jones and other union bosses Wednesday as part of widening corruption probe, with witnesses reporting agents counting “wads of cash” in Jones’ garage.
Details are sealed in federal court records, but witnesses told The Detroit News more than a dozen agents wearing FBI polo shirts and jackets descended on Jones’ Canton Township home around 7 a.m. Wednesday and filled numerous boxes and envelopes with evidence.
Gary Mann, a neighbor, told the news site he came across the scene – with numerous black SUVs and sedans parked in front of the home – around 8:30 a.m. while out walking with his wife.
“It alarmed us,” he said. “I’ve never seen anything like it. We asked if there was anything wrong. They didn’t want to say anything.”
Another neighbor, Kevin Telepo, said he saw agents in the garage about a half hour later.
“They were on the floor counting cash, going through the wads,” Telepo, who lives five houses away, told the News. “They pulled out a five-foot banner that was a UAW banner. They were really examining the golf clubs.”
The raid on Jones’ home was one of six in Michigan, California, Wisconsin and Missouri follow a four-year federal investigation into bribes and kickbacks involving labor negotiators and top officials with the UAW and Fiat Chrysler Automobiles. There’s also ongoing investigations into money and benefits flowing into the tax exempt nonprofits of top union officials.
In Michigan, the raids included Jones’ home, as well as the UAW Black Lake Conference Center, a 1,000-acre retreat in northern Michigan “financed with interest from the union’s $721 million strike fund, which is bankrolled by worker dues,” according to the News.
Federal agents also targeted the UAW Region 5 office near St. Louis, where Jones previously served as regional director, as well as the home of Vance Peterson, director for Region 5, which covers UAW workers in 17 states.
FBI spokeswoman Mara Schneider said other raid locations include the California home of former UAW President Dennis Williams, as well as the Wisconsin home of Williams’ former administrative assistant, Amy Loasching, who was also the head of his nonprofit.
“Nine people have been charged in the long-running investigation,” the Detroit Free Press reports. “All but one were associated with misuse of money intended for training at the UAW-FCA joint training center” at Black Lake.
According to CNBC:
The multiyear probe has already led to the convictions of five people affiliated with the UAW and three Fiat Chrysler executives, including the former head of labor relations, Alphons Iacobelli, who was sentenced last year to 5 1/2 years in prison – the longest sentence in the case. …
Michael Grimes, a retired senior official with the union’s GM division, was charged earlier this month with wire fraud and money laundering for allegedly receiving $2 million in kickbacks from UAW vendors.
Federal authorities have not yet filed any criminal charges related to the Wednesday raids, which come amid national contract negotiations between the UAW and the Big Three automakers.
Jones is currently overseeing the negotiations that will impact about 150,000 of the union’s roughly 400,000 members, though the details are handled by UAW vice presidents assigned to General Motors, Fiat Chrysler, and Ford, the Press reports.
“The UAW is expected to announce after Labor Day which company will be targeted to reach the initial agreement that will be a template for the other two automakers,” according to the news site.
Experts told the media the federal raids cast a dark cloud over the negotiations by sowing distrust of union leaders among members. The UAW, meanwhile, is pledging to “uncover and address any and all wrongdoing” while forging ahead in negotiations.
“The UAW and President Gary Jones have always fully cooperated with government investigators in this matter. As the leader of the UAW, President Jones is determined to uncover and address any and all wrongdoing, wherever it might lead,” UAW spokesman Brian Rothenberg told the News.
“There was absolutely no need for search warrants to be used by the government today – the UAW has voluntarily responded to every request the government has made throughout the course of its investigation, produced literally hundreds of thousands of documents and other materials to the government, and most importantly, when wrongdoing has been discovered, we have taken strong action to address it,” he said.