Crimes Could Have Been Discovered Years Earlier Obama Labor Bureaucrats Helped UAW Kingpins Conceal Wrongdoing
The ever-expanding United Auto Workers (UAW/AFL-CIO) union scandal, in connection with which 13 people had already pleaded guilty to embezzlement and other federal offenses by early April, illustrates why Right to Work supporters have fought for years for better federal oversight of union financial schemes.
One obvious example is the guilty plea entered by former UAW Vice President Norwood Jewell in April 2019.
As Mr. Jewell’s plea agreement acknowledged, over the years, executives of Fiat/Chrysler Automobiles (FCA) again and again used the National Training Center (NTC) jointly managed by the firm and the union for illicit purposes.
Auto Executives Used Trust to Funnel Cash Gifts to Head Union Negotiator
Specifically, FCA executives used the NTC to furnish Mr. Jewell with lavish gifts at the same time he was head union negotiator of the workplace contract governing FCA’s front-line employees across the U.S.
Auto executives who sat across the table from Mr. Jewell paid for these gifts with FCA money funneled through the NTC, which, as a consequence of a 2010 Obama Administration rollback of federal oversight of union finances, did not have to disclose to the U.S. Labor Department how it spent its funds!
A decade ago, Labor Department (DOL) Secretary Hilda Solis and other agency bureaucrats installed by then- President Barack Obama brushed aside the public pleas of National Right to Work leaders and members who urged them not to kowtow to union kingpins by rolling back federal oversight of Organized Labor.
Ms. Solis and her cohorts unceremoniously scrapped a number of enhancements of union disclosure requirements implemented during the first decade of the millennium in response to revelations of self-dealing by top union bosses like plumbers kingpin Martin Maddaloni and laborers bigwig Arthur Coia.
One of the principal targets for destruction was the Form T-1.
Mixing Coercive Power With Less Accountability Was A Recipe For Corruption
Until it was scuttled, the T-1 blocked officers of unions with $250,000 or more in annual revenue from using trusts supposedly created to benefit rank-and-file members to circumvent the federal reporting requirements for such unions that Congress instituted in the 1959 Landrum- Griffin Act.
Right to Work activists and their allies warned that Obama appointees’ loosening of union financial-disclosure rules would result in even more of the corruption that is always the byproduct of labor laws that corral workers into unions.
Oversight Budget Fell By 29% in Real Terms Even As Federal Spending Soared
Besides making it far easier for union bosses to conceal expenditures that they didn’t want rank-and-file members and forced-fee paying nonmembers to know about, Obama DOL appointees slashed the budget for the only division of their agency that is charged with overseeing union activities.
In Fiscal Year 2007, near the end of the George W. Bush Administration, the annual budget of the DOL’s Office of Labor-Management Standards (OLMS) was $48 million.
By FY 2017, Ms. Solis and Tom Perez, whom Mr. Obama selected to replace Ms. Solis as labor secretary when she left the administration in 2013, had successfully pressed Congress to cut the budget of this office, which only spends roughly 0.1% of the DOL’s total allocation, by 29% in real terms.
All this happened while the overall federal budget grew far faster than the rate of inflation.
(In February 2017, Democrat Party operatives selected Mr. Perez to be chairman of the Democratic National Committee. He continues to head the DNC today.)
As current U.S. Labor Secretary Eugene Scalia, appointed by President Donald Trump last year, acknowledges, the disappearance of the T-1 made it far easier for UAW bosses like Norwood Jewell to live the high life using NTC money that was supposed to be spent assisting front-line workers without fear of getting caught.
For example, on January 9, 2015, Mr. Jewell “spent $7,569 on dinner at LG’s Prime Steakhouse in Palm Springs, Calif.”
Over the course of that same month, he “spent $1,267 at Indian Canyons Gold Resort” in Palm Springs. On January 18, 2015, he “approved a $4,587 meal” at LG’s. On January 24, 2015, Mr. Jewell “approved [another] UAW official spending $6,200 at Palm Springs Steak & Chop Restaurant.”
A few months later, on July 14, 2015, he “approved a $7,694 meal at the London Chop House in Detroit. Two months later, he approved a $6,912 meal at the same restaurant.”
All of this was paid for by the very auto executives with whom Mr. Jewell and other UAW bosses were supposed to be driving hard bargains on behalf of rank-and-file autoworkers.
All the while, courtesy of the Obama DOL, crooked UAW and FCA officials were able to keep such illegal transactions secret.
Scheme to Embezzle Coerced Dues and Fees Succeeded, Year After Year
Of course, much of the ongoing UAW scandal, in connection with which additional indictments and guilty pleas are expected, involves theft of dues and fees that unionized autoworkers in states like Ohio and Missouri are still forced to fork over as a job condition.
For example, as this Newsletter went to press in early April, former UAW President Gary Jones was expected, within the next few weeks, to plead guilty to embezzling more than a million dollars in union treasury money and spending it on personal luxuries, as well as racketeering and income tax evasion.
National Right to Work Committee President Mark Mix commented: “Although federal authorities report that the racketeering scheme in which Gary Jones and his UAW cohorts conspired dates back at least to 2010, no charges were filed in connection with their and other related UAW-boss crimes until late summer 2017, several months after the Obama Administration ended.”
‘Greedy, Dishonest Union Bosses Now Have More to Worry About’
“Thanks to the Trump Administration’s substantially greater interest in auditing union books and deterring Big Labor financial subterfuges, greedy, dishonest union bosses now have more to worry about,” added Mr. Mix.
“Unfortunately, Mr. Trump’s first labor secretary, Alexander Acosta, dragged his feet about reinstating the union disclosure requirements quashed by the Obama team during his two-and-a-half years in office.
“It was only this March, roughly eight months after Mr. Acosta’s resignation, that the DOL rule restoring the requirement that union bosses file disclosure forms regarding the financial activities of trusts in which they have an interest was finally reinstated.
“This was a victory for Right to Work supporters and other concerned citizens who have been pushing for this policy change since before Donald Trump was inaugurated.
“But the enhancement of union reporting requirements is far from perfect.
For example, it exempts, for no valid reason, unions with revenues of less than $250,000 from having to report on any expenditures of the trusts they control.
“And now that the T-1 reinstatement is finally in effect, the cynical bosses of the AFL-CIO and other unions are virtually certain to try to block it in court.
“They have a good chance of keeping it legally tied up at least until next year, when, potentially, Labor Department appointees of newly-elected President Joe Biden could kill it.
“Of course, the best remedy for union corruption would be for Congress to repeal all the monopoly privileges union bosses currently enjoy under federal law, including forced union dues and fees and forced ‘representation.’
“But until the politicians in Washington, D.C., are ready for comprehensive reform, enhanced disclosure rules will be necessary and proper.”