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Ex-UAW president pleads guilty to racketeering and embezzlement


Gary Jones, the newly-elected President of the United Auto Workers (UAW), addresses the 37th UAW Constitutional Convention June14, 2018 at Cobo Center in Detroit, Michigan. 

Bill Pugliano | Getty Images News | Getty Images

Former United Auto Workers President Gary Jones pleaded guilty Wednesday to racketeering and embezzlement, marking a major milestone in a yearslong case into corruption in one of America’s most prominent unions.

Jones, 63, is the highest-ranking member of the UAW to be convicted as part of the ongoing probe into the misuse of millions of dollars, embezzlement and bribery by union officials. He is the 14th person to plead guilty as part of the case, including 11 officials affiliated with the union and three executives with Fiat Chrysler.

The conviction is part of a plea deal with federal prosecutors. Jones also has agreed to cooperate with prosecutors as part of the government’s ongoing investigation, Assistant U.S. Attorney David Gardey said Wednesday during Jones’ plea hearing.

Jones’ guilty plea and cooperation come months after federal prosecutors confirmed that a civil racketeering case against the union, including potential government oversight, remains an option. 

Jones was charged in March for his involvement in embezzling more than $1 million of union funds for golf trips, expensive cigars, liquor and other merchandise and luxuries.

“I apologize to my UAW family for betrayal of their trust and pray they will forgive me,” Jones said during the roughly 40-minute hearing that was conducted via a Zoom video conference due to the coronavirus pandemic.

Jones faces up to five years in prison and up to $250,000 in fines. Imprisonment guidelines under the plea deal are between 46 months and 57 months. Those guidelines may be lowered based on Jones’ degree of cooperation, Gardey said.

UAW President Rory Gamble, in a statement, said his predecessor’s actions were “selfish, immoral, and against everything we stand for as a union.”

Court documents and Jones’ cooperation suggest more union officials could be charged as federal prosecutors identified four other unnamed co-conspirators in the scheme. Jones’ predecessor, Dennis Williams, has been implicated as part of the investigation but not charged with a crime.

Homes of Jones, Williams and other union officials were raided in August as part of the investigation, which was made public in July 2017.

Other high-ranking officials to be convicted as part of the investigation include UAW Vice Presidents Norwood Jewell and Joe Ashton, a former General Motors board member, and Alphons Iacobelli, an ex-vice president of Fiat Chrysler.

Jones resigned from leading the union effective Nov. 20 — the same day the UAW International Executive Board started the process of removing him from office.

FBI agents finish loading materials into a truck out of the home of United Auto Workers President Gary Jones on Wednesday, Aug. 28, 2019.

Michael Wayland / CNBC

Jones began a leave of absence from the union starting Nov. 3, days after he was implicated as being part of the ongoing probe.

When the federal investigation was made public in July 2017, it focused on a training center jointly operated by the UAW and Fiat Chrysler. But it quickly expanded to probes into similar operations with GM and Ford Motor, which both previously confirmed they were cooperating with the investigation.

The probe has widened to top union leaders unaffiliated with the training centers being involved in embezzlement of union funds, money laundering and other illegal activities.

In an unusual move, federal prosecutors last month informed GM that it is not currently a target in the investigation.

www.cnbc.com 2020-06-03 20:16:01

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