Corrupt UAW leader Pearson sentenced for racketeering scandal

Detroit — Vance Pearson, who oversaw the largest United Auto Workers region in the country, was sentenced to 12 months in federal prison Tuesday, the last auto industry figure awaiting punishment in a years-long scandal that led to federal oversight of the union.

Federal judges have sentenced 10 UAW officials — including two presidents — one union vice president's widow and three Fiat Chrysler Automobiles NV executives, collectively, to more than 20 years in federal prison for a pattern of corruption that included breaking federal labor laws, stealing union funds and receiving bribes, kickbacks and illegal benefits from contractors and auto executives.

Prosecutors also have secured prolonged oversight of the UAW and Fiat Chrysler, now part of Stellantis NV, which also was ordered to pay a $30 million fine. Yet FBI, Labor Department and IRS agents who have spent at least six years probing corruption within the U.S. auto industry have not finished investigating several unidentified targets. 

The federal crackdown stopped short of giving the government total control of the UAW and does not guarantee members will directly elect future union leaders. And despite the convictions, no union official was sentenced to more than 30 months and the union's governing board remains filled by old-guard officials — including Ray Curry, the union’s fourth president in three years.

“It was a huge investment of prosecutorial time and money and in one sense, it’s a big result in the number of people convicted," said Erik Gordon, a professor at the University of Michigan’s Ross Business School. "But in the end, I’m not sure this is big punishment, and I’m not sure it’s going to have a big deterrent effect.” 

U.S. District Judge Paul Borman sentenced Pearson, 60, for his role in an embezzlement scheme and broader corruption scandal that raised doubts about the sanctity of labor negotiations and honest representation of approximately 1 million active and retired UAW workers. The sentence marked a significant break because Pearson helped prosecutors secure the convictions of former UAW presidents Gary Jones and Dennis Williams — and his assistance led to oversight of the union.

“This is a serious offense,” Borman said. “It was a betrayal of trust to UAW workers and a serious betrayal of trust.”

Pearson's lawyer, Scott Rosenblum, requested a sentence of probation, calling his client an honorable man who was manipulated during a distinguished UAW career.

“The government talks about Mr. Pearson becoming lost in a culture of corruption. I would disagree with that wording," Rosenblum told the judge. "He became consumed by a culture of corruption that he graduated into."

The sentence comes 17 months after Pearson pleaded guilty to racketeering and embezzlement conspiracy. Prosecutors accused him of helping embezzle more than $1.5 million and spending the money on personal luxuries for labor leaders, including golf, cigars, private villas and liquor in Palm Springs, Calif., and elsewhere.

Pearson, dressed in a black suit and wearing a face mask, said little to the judge before being sentenced: “My lawyer pretty much summed everything up,” he said.

Pearson ran the UAW's office near St. Louis, which oversaw union members in 17 states, including California, who work in the auto parts, aerospace and beverage container industries. He resigned in November 2019, three months after federal agents searched the union office as part of nationwide raids at multiple locations, including the homes of Jones, Williams and Pearson, in August 2019.

The region hosted lavish annual junkets in Palm Springs, where union leaders spent more than $1 million on personal luxuries, including private villas, golf, meals, liquor and no-limit shopping sprees. The union decided in late 2019 that the region would be disbanded as part of a broader series of reforms.

As part of his conviction, Pearson has forfeited more than $122,000 seized from two bank accounts and golf equipment purchased with embezzled UAW funds. He also will serve three years' supervised release and pay $250,000 restitution.

The union issued an unsigned statement Tuesday that said the sentence closes a "dark past chapter in UAW history."

"And while justice has been served, the UAW under President Ray Curry and the International Executive Board are committed to continue building a UAW focused like a laser on its members and their families; transparent in its operations; and committed to building upon the ethics reforms and bold future that our members deserve," the statement read.

The plea deal portrayed Pearson as carrying out orders from Jones and Williams to rent private villas and buy large quantities of cigars and alcohol, and covering up expenses by filing phony reports with the union.

The racketeering enterprise lasted from 2010 until September 2019 and involved Pearson, Jones, Williams and at least four others, according to the government. 

“Actions by high-level UAW officials cannot stand,” Assistant U.S. Attorney Steven Cares said. “Whether it is turning a blind eye or willfully lying, the harm that has been caused by Mr. Pearson … has been severe to not just the UAW but the labor movement generally.”

Pearson also ensured that Williams was able to use, for months at a time, private villas in Palm Springs from 2015-18, prosecutors said. UAW money paid for the villas, according to the government.

Pearson did not pocket money or receive tangible benefits from the wrongdoing, other than a set of golf clubs, his lawyer said. He was considered a “mule” used by top leaders Jones, Williams and other UAW “show horses” to procure villas and other perks.

“I can’t help but believe he was being manipulated by these other gentlemen,” Pearson’s lawyer said in asking for a sentence of probation.

UAW funds also paid for private villas for friends and "UAW Official D," whom sources identified as Williams aide Amy Loasching. The plea deal also describes benefits Williams' spouse received paid for with UAW funds.

Loasching, whose home in Wisconsin was raided in August 2019, has not been charged with wrongdoing.

During the alleged conspiracy, Jones directed Pearson to conceal "hundreds of thousands of dollars of personal expenditures," according to Pearson's plea deal. And Williams directed Pearson to use UAW money to pay for "large quantities of cigars, cigar paraphernalia and humidors."

Pearson was tasked with providing alcohol and cigars for Williams and his spouse, according to prosecutors. Pearson also arranged for the spouse to charge expenses at Loew's Coronado Bay Resort in California "even though UAW Official B's spouse was not an officer or employee of the UAW and the expenses had no legitimate union business purpose," prosecutors wrote.

Pearson was a close aide to Jones. He served on the board of directors overseeing Jones' charity and succeeded Jones as director of Region 5, then one of the union's largest regions that was based in suburban St. Louis. After Pearson was charged, the union announced it would disband the region as part of a broad series of reforms.

Pearson started negotiating a deal with the government as early as November 2019 after prosecutors disclosed that investigators were armed with evidence that included bank records, cooperation from top labor leaders and secret recordings.

Court records describe conversations among UAW officials, including Jones and Pearson and directly quote labor leaders talking about destroying evidence and obstructing justice. 

Prosecutors later revealed that UAW official Edward "Nick" Robinson wore secret recording devices for the government.

rsnell@detroitnews.com

Twitter: @robertsnellnews