Raids raise possibility of federal racketeering case against UAW

Raids at the homes of some of the United Auto Workers' top leadership Wednesday amplify the possibility the federal government could assume oversight of the union under anti-racketeering statutes.

The case for federal oversight of a union typically involves criminal implications of current leadership, experts say. And a move to file a civil racketeering lawsuit would reflect the government’s belief that the UAW is corrupt and the situation has not improved despite a four-year investigation that has led to eight convictions, including former union officials and executives from Fiat Chrysler Automobiles.

“This is the nuclear option,” said Peter Henning, a Wayne State University law professor and former federal prosecutor.

The FBI raided the home of UAW President Gary Jones and five other homes or offices of former UAW officials around the country Wednesday, signaling the federal government could now be targeting Jones in a years-long investigation into bribes, kickbacks and attempts by auto executives to influence labor negotiations with the UAW. Jones has not been charged with a crime. The home of former UAW president Dennis Williams was included in the Wednesday raids.

Kristin Dziczek, vice president of industry, labor and economics at Ann Arbor's Center for Automotive Research, noted a racketeering case would have to involve current sitting officers of an organization. Dziczek and other experts noted that government oversight requires proof of much deeper corruption of an organization than has been shown at the UAW to date.

The U.S. Department of Justice did not respond to Detroit News' request for comment Wednesday. UAW spokesman Brian Rothenberg told The News that "the UAW will continue to cooperate with the government in its investigation, as we have been doing throughout."

Federal oversight of any part of the UAW would drastically alter the way the organization operates, experts say.

"Federal oversight completely and profoundly changes the direction of the union," said Harley Shaiken, a professor at the University of California-Berkeley who specializes in labor and the global economy. "The fact that it is even being discussed is disturbing news. One would need to see evidence of sustained institutional malfunction."

Such a move is not unprecedented. Thirty years ago, the U.S. Attorney's Office and the International Brotherhood of Teamsters settled a civil racketeering lawsuit to keep mob influence out of the 1.4 million-member union.

The suit alleged the Teamsters had made a "devil's pact" with organized crime and was dominated by the Mafia. The federal government gained control of the Teamsters by way of a consent decree settling racketeering and corruption charges that federal officials brought against Teamsters officials.

The government essentially oversaw every penny the Teamsters spent for 25 years. A 2015 agreement moved to phase out government oversight over a five-year period. Experts note that 25 years of government oversight, while attempting to sever Teamster ties to the Mafia, drastically altered the union by establishing new election practices, among other things.

The case against the Teamsters was brought despite pressure from Congress in 1988. It resulted in the removal of more than 200 Teamsters officers in the first three years of the consent decree, including 50 local union presidents, according to the 2012 book "Breaking the Devil's Pact: The Battle to Free the Teamsters From the Mob" by James Jacobs and Kerry Cooperman.

During the ensuing 20 years, disciplinary charges were brought against more than 600 Teamsters in 21 states; half of those Teamsters were in New York City.

A civil racketeering lawsuit involving the UAW could entail asking a federal judge to appoint a monitor to oversee the union, Henning said.

“If they go to that step, the government is looking to take control of the union,” Henning said. “That is an extreme step and might mean getting rid of the current leadership of the union.”

Filing a civil racketeering case would need to be approved at the highest levels of the Justice Department. In filing a lawsuit, prosecutors would need to describe a pattern of racketeering activity including bribery, graft, violations of federal labor laws and conflicts of interest, Henning said. The lawsuit could seek a restraining order preventing additional crimes.

A racketeering lawsuit could assist the ongoing criminal investigation that is targeting several entities and individuals, including Jones and his predecessor.

“Maybe the U.S. Attorney’s Office feels it has reached a dead-end and they’re not getting cooperation, that they’re getting stonewalled,” Henning said. “A trustee or monitor could come in and open up the books and make them available to the U.S. Attorney’s Office.”

Arthur Wheaton, an automotive industry specialist at Cornell University’s Industrial and Labor Relations School, doesn’t think a takeover by the federal government is likely yet, but that could change.

“If they’re raiding homes, they may have some anticipation of finding things,” he said. “We have a very anti-union federal government that’s very much out to get them as much as they can. I wouldn’t be surprised if they really tried to take it to them.”

But a Racketeer Influenced and Corrupt Organizations Act lawsuit isn't easy to litigate, note Dziczek and Shaiken. RICO suits take years to litigate, and in the UAW's case, federal officials would need to prove dozens of people would have been party to a conspiracy to influence collective bargaining or financial impropriety, which has not been proven.

The federal government has so far brought charges against nine people and prison sentences for eight people linked to the UAW and Fiat Chrysler Automobiles. On Wednesday, Mike Grimes, a former United Auto Workers senior leader, entered not-guilty pleas on federal charges of wire fraud conspiracy and money laundering in U.S. District Court. Grimes, 65, of Fort Myers, Florida, was charged earlier this month. The charges could send Grimes to federal prison for up to 20 years. 

He is expected to plead guilty Tuesday.

Meantime, former Vice President Joe Ashton is accused in a federal criminal complaint of demanding $550,000 in kickbacks and bribes from vendors and helping orchestrate an alleged conspiracy, The News has reported. 

"The feds have tried to make a case that bargaining was corrupted," Dziczek said. "I don't think they've made that case yet. The only thing that changes here is that we now have a current sitting officer that has had his home raided. That doesn't mean he's going to get indicted, but if he is, that's part of the move the government uses."

ithibodeau@detroitnews.com

Twitter: @Ian_Thibodeau