UAW leaders help feds investigate president Gary Jones
Detroit — A top deputy to United Auto Workers President Gary Jones and one of the union's most powerful officers are helping federal prosecutors build a criminal case against the labor leader for embezzling union funds, The Detroit News has learned.
Former deputy Danny Trull and retired UAW Secretary/Treasurer Gary Casteel have met with investigators and provided an insider's view of an alleged conspiracy and cover-up involving more than $1 million spent on personal luxuries, according to federal court records and six sources familiar with the investigation.
The government is building its case at the same time that 46,000 UAW members are striking General Motors Co. nationwide. The corruption investigation — marked by federal raids and criminal charges against 11 people linked to the UAW and Fiat Chrysler Automobiles NV — raises questions about whether Jones and the union's senior leadership can sell a new contract to the UAW-GM rank-and-file.
Trull and Casteel join a team of former UAW officials who have cooperated with the investigation into labor law crimes, kickbacks, bribes, and embezzlement and helped prosecutors secure nine convictions.
"Those guys have bargaining chips and can give the government something about Gary Jones," said Erik Gordon, a professor at the University of Michigan’s Ross Business School. "But that testimony can be attacked."
Federal authorities last month filed a criminal case against another Jones deputy, UAW Region 5 Director Vance Pearson, that outlined a scheme to embezzle membership dues spent on private villas, golf, meals and $400 bottles of Louis Roederer Cristal Champagne.
The criminal case implicated four current and former UAW officials, including Jones and former UAW President Dennis Williams, who investigators refer to with pseudonyms because they have not been charged with a crime.
The sources, who are not authorized to speak publicly about the investigation, identified Trull as "UAW Official C" and former Williams aide Amy Loasching as "UAW Official D." Casteel is referred to as "CW-5," a cooperating witness, the sources said.
Trull served as Jones' deputy overseeing a 17-state regional office based in Missouri and retired in late 2015. He is accused in the criminal complaint of using member dues to pay for golf, meals and shopping in Palm Springs and trying to conceal the expenses.
The 64-year-old from Waxahachie, Texas, told investigators he saw Jones spend member dues on golf clothes in Palm Springs and that union money paid for extravagant lodging, expensive cigars, high-end liquor and fancy meals.
He also said Jones ordered him to hide the expenses, according to the sources and a federal court affidavit written by Labor Department Special Agent Andrew Donohue.
Besides being a top deputy, Trull also served on the board of Jones' nonprofit, the 5 Game Changers Charity Fund. The News previously reported federal agents are investigating the charity.
Casteel, meanwhile, who oversaw the union's finances and its $1.1 billion in assets, told investigators he did not know union money was being spent on personal luxuries in Palm Springs. He said the expenses, including 107 rounds of golf, more than $100,000 worth of golf equipment and $185 bottles of Crown Royal whiskey, were beyond what he would have approved, according to sources and the affidavit.
"CW-5 confirmed that all UAW expenses had to be properly approved and for the benefit or the UAW's membership," Donohue wrote.
Casteel, 61, of Ashland City, Tennessee, was viewed as a potential successor to Williams before abruptly announcing his retirement last year. Casteel and Trull have not been charged with wrongdoing and did not respond to messages seeking comment.
“If reports are true that Danny Trull and Gary Casteel are cooperating, Gary Jones has nothing to fear,” Jones’ defense lawyer Bruce Maffeo told The News. “The expenditures were reported in sufficient detail that if either Casteel, who was secretary/treasurer, or the UAW accounting department had any questions, they had every opportunity to ask them and they didn’t.”
A UAW spokesman declined to comment on Trull and Casteel.
The sources also identified Loasching as an unnamed UAW official accused in the Pearson case of spending months in private villas, golfing, eating, shopping and partying in the Palm Springs area.
The UAW spent more than $11,000 renting a private villa for Loasching near Palm Springs from 2015-16, and she spent approximately $1,000 during a shopping spree at a Palm Springs golf resort, according to the Labor Department investigator.
Loasching, 56, was first linked to the investigation on Aug. 28 when federal agents raided her home in Janesville, Wisconsin. She has not been charged with wrongdoing.
“I’ve met with her a number of times and looked over a substantial amount of documents,” her defense lawyer Brian Legghio told The News. “I am completely satisfied and convinced she has not violated any labor management laws or any federal laws.”
The Loasching raid coincided with searches in three other states, including at the homes of Jones, Williams and Pearson. Two weeks later, Pearson was charged with embezzlement, mail and wire fraud and money laundering in a case that implicated Jones.
The UAW, for example, rented a three-bedroom villa with a private pool and hot tub for Jones near Palm Springs in late 2015 and early 2016, according to the Pearson criminal case. The UAW was holding a five-day conference, but the villa was rented for 63 days and cost the union more than $10,000.
"These UAW officials have intentionally and fraudulently concealed these personal expenses within the cost of UAW leadership and training conferences in order to prevent their discovery by the government and the UAW membership," Donohue, the Labor Department agent, wrote.
Trull, meanwhile, is portrayed by the government as a central figure in the alleged cover-up and a frequent shopper in Palm Springs.
His apparent signature is on a $3,000 bill for men's and women's shirts, jackets, hats, visors and sunglasses at the Indian Canyons Golf Resort pro shop in December 2014, according to the Labor Department agent. "UAW Official C," who is Trull, also was sent an $1,800 bill from a cigar shop and submitted false paperwork to conceal Palm Springs expenses, the investigator wrote.
Trull tried but failed to convince an employee of the Renaissance Palm Springs Hotel to hide condominium, villa, meal, golf, and cigar expenses in 2015 "by falsely inflating hotel room rentals," Donohue wrote. The employee refused until Jones intervened.
The hotel employee "believed the purpose of the endeavor was to conceal the true nature of the union's expenditures from its members," Donohue wrote.
Trull spoke with investigators after reaching an agreement preventing the government from using his statements or evidence against him if he "provided truthful and complete answers."
Trull, identified as "UAW Official C," admitted submitting false vouchers to the UAW that concealed Palm Springs expenses, according to the government affidavit. The UAW and the regional office Jones oversaw until being elected president had made similar arrangements for years, Trull told investigators.
He also portrayed Jones as an ambitious, free-spender. Trull "believes that (Jones) used the events to curry favor with (Williams) who also enjoyed the lavish lifestyle," Donohue wrote.
The Trull cooperation could be attacked, Gordon said.
"(Trull's) weakness is the defense will point out that he knew about (Palm Springs spending) and now to save his skin he's saying things to the government," he said.
Casteel also met with investigators after prosecutors agreed not to use his statements or evidence against him, according to sources and the Donohue affidavit.
During his meeting, Casteel confirmed UAW expenses had to be properly approved and benefit union members. Casteel told investigators he did not know member dues were being spent on cigars, golf equipment, greens fees and private villas for UAW leaders, the Labor Department agent wrote.
"If Jones is charged and goes to trial, the defense will attack (Casteel's) credibility," Gordon said. "If the secretary/treasurer of the UAW didn't know about all this, was he inept? Is he telling the truth or is he trying to save his skin?"
rsnell@detroitnews.com
Twitter: @robertsnellnews
daniel.howes@detroitnews.com