GM strike, day 20: UAW director charged in federal probe put on leave
A United Auto Workers regional director charged in a widening federal union corruption investigation has been placed on leave.
Vance Pearson, a member of the union's international executive board and the director of UAW Region 5, began leave on Friday, according to a statement from the UAW provided to the Detroit Free Press, which first reported the news. Pearson was charged last month with embezzling union funds, mail and wire fraud, and money laundering.
UAW spokesman Brian Rothenberg declined to comment. Pearson's attorney did not immediately respond.
UAW officials in Detroit will oversee Region 5 for now, and Jim Soldate, Region 5 assistant director, will continue in his capacity, according to the statement.
The leave of absence comes as the UAW is negotiating a new labor contract with General Motors Co. and is poised to enter day 21 of its national strike against the Detroit automaker. Meanwhile, pressure is mounting on the UAW to make reforms as the federal probe has led to nine convictions, charges against Pearson and one other former UAW official, and has implicated UAW President Gary Jones and his predecessor, Dennis Williams.
The Saint Charles, Missouri, home of Pearson, Jones' successor and former aide in Region 5, was one of the locations in four states raided by federal agents in August. Agents also searched the homes of Jones and Williams, though they have not been charged.
An affidavit written by Labor Department Special Agent Andrew Donohue in the criminal complaint against Pearson details a years-long conspiracy that involved embezzling $1 million in member dues and spending the money on personal luxuries. The Detroit News identified two unnamed officials involved in orchestrating the scandal as Jones and Williams.
Three days after being charged, Pearson attended negotiations with GM in Detroit, though he was not a member of the UAW-GM national bargaining team and did not vote on the strike.
Pearson was photographed by The News walking into a meeting at the Renaissance Center on Sept. 15, before the union called for the national strike against the Detroit automaker.
"Are you Vance Pearson?" a reporter with The News asked him at the time.
"No, ma'am," Pearson replied.
The criminal case focuses on lavish spending by UAW officials during conferences in Missouri and California and provides the most detailed government account of alleged misspending in Palm Springs, including $120,000 for cigars, steak dinners and drinks, and 107 rounds of golf. The News reported the government's interest in Palm Springs in September 2018.
From 2014 to 2018, a period that covers Jones' tenure leading UAW Region 5, Pearson and other leaders submitted phony expense forms seeking reimbursement from UAW headquarters, prosecutors said in an affidavit. The phony expenses were supposedly tied to UAW Region 5 leadership and training conferences.
Region 5, which covers 17 states stretching from Missouri to California, was headed by Jones until he was elected UAW president last year. Pearson and other unnamed UAW leaders used the conferences to conceal the use of hundreds of thousands of dollars of union member dues to pay for entertainment and personal expenses, according to the affidavit.
Federal investigators searched Pearson's home and office Aug. 28 during a series of nationwide raids in four states. A team of federal agents from the FBI, Internal Revenue Service and Labor Department also searched Jones' home in Canton Township, the California home of Williams, who resigned last year, and the home of former Williams aide Amy Loasching in Wisconsin.
Former UAW communications directors Frank Joyce and Rev. Peter Laarman, in an op-ed Friday broke what they called an "institutional code of silence" to give a scathing rebuke of the UAW leadership for abandoning the practices of the formerly "squeaky-clean organization built by the union’s earlier generations." They called for the resignations of the UAW's entire international executive board and the assistance of the Canadian auto workers union to help reconstitute the leadership. Specifically, they condemned the lack of action against Pearson.
"Vance Pearson remains an officer in good standing," they wrote in the op-ed provided to the Free Press. "Not one International UAW officer or staff member has publicly called for him to step down. The UAW seems to have outsourced its ethics to officials of the Trump administration."
Negotiators with GM and the UAW continued to meet Saturday, wrapping up before 8 p.m. with the expectation to resume Sunday morning. The previous evening, talks had recessed at the relatively early hour of 7 p.m., as 46,000 hourly striking employees, including more than 17,000 in Michigan, missed their regular paychecks for a second straight week.
UAW Vice President Terry Dittes signaled in a letter Friday that bargainers had made progress at the main negotiating table on health care and a path forward for temporary workers. But GM and UAW still had not reached tentative agreements on some of the most substantive aspects of the new contract, Dittes said. Still outstanding were proposals on wages, job security, skilled trades and pensions. Under CEO Mary Barra, GM has pushed to control fixed costs and is a much more disciplined company than the one that emerged from bankruptcy under a federal bailout a decade ago.
Even if a tentative agreement is reached, UAW leadership might decide not end the walkout until rank-and-file members ratify a contract, which would keep plants closed for several more days.
Meantime, negotiators at Ford Motor Co. and Fiat Chrysler Automobiles NV reported late in the week that they had reached tentative agreements on nearly all subcommittees.
Ford, Fiat Chrysler and the UAW agreed separately to extend the 2015 contract while GM and the union negotiate. Whatever GM-UAW membership ratifies would lay the framework for the deals presented to membership at Ford and Fiat Chrysler.
Strike pay for GM employees is $250 per week. For comparison, top-paid production employees earn $30.46 per hour, or about $1,218 per week.
ithibodeau@detroitnews.com
Twitter: @Ian_Thibodeau