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Federal agents raid home of United Auto Workers union President Gary Jones

Key Points
  • IRS and FBI agents raid UAW President Gary Jones' home.
  • They also raid the California home of former President Dennis Williams as well as the union's training center, called Black Lake, according to the Detroit News.
  • The more than two-year probe has already led to the convictions of five people affiliated with the UAW and three Fiat Chrysler executives.
FBI agents carry materials out of the home of United Auto Workers President Gary Jones on Wednesday, Aug. 28, 2019.
Michael Wayland | CNBC

DETROIT – Federal agents raided the home of United Auto Workers President Gary Jones on Wednesday as the Justice Department expands its probe of corruption in the union's top ranks while Detroit automakers renegotiate labor contracts for 158,000 employees.

Kevin Telepo, a neighbor, said he noticed FBI and IRS agents searching the property at about 8:30 a.m. The agents removed "a bunch of boxes" from the house and "were going through a bunch of cash in the garage," he said in an interview.

The federal agents were still searching Jones' home in suburban Detroit and removing items in the early afternoon.

Jones' home was one of several targets hit by federal agents Wednesday, according to FBI spokeswoman Mara Schneider. Other locations in the multistate raid included the California home of former UAW President Dennis Williams as well as the union's training center, golf resort and a conference center called Black Lake.

Additional locations, Schneider confirmed, included a local UAW office in Missouri, where Jones previously served as regional director, and the Wisconsin home of Williams' former administrative assistant, Amy Loasching.

The raids, which were first reported by The Detroit News, occurred at six locations in four states. They mark a major shift in the investigation from many former or retired union officials being targeted to active leaders.

The Department of Labor's Office of Inspector General also was involved in the raids, Schneider confirmed.

UAW: Search warrants unnecessary

The UAW, in an emailed statement, said there was "absolutely no need for search warrants to be used by the government today," citing the union and its leadership "have always fully cooperated with the government investigators in this matter."

The UAW said it has produced "hundreds of thousands of documents and other materials to the government" and leaders have taken "strong action" to address any wrongdoing.

The home of United Auto Workers union President Gary Jones on Wednesday, Aug. 28, 2019 after federal agents raided the home.
Mike Wayland | CNBC

At Jones' home, Telepo said there were about a dozen cars on the street, including a large black van that remained in front of the house by the early afternoon. There also was a black Chevrolet Suburban with an employee tag next to the driveway for the GM-UAW Center for Human Resources training center, which is a target of the federal investigation.

Telepo, who was unaware Jones was the president of the UAW, described the suburban Detroit subdivision in Canton Township as "quiet, kid- and family-friendly." He said Jones primarily kept to himself.

"It is shocking to see this happening close to home," he said.

The home of United Auto Workers union President Gary Jones on Wednesday, Aug. 28, 2019 after federal agents raided the home.
Mike Wayland | CNBC

Widening probe

The multiyear probe has already led to the convictions of five people affiliated with the UAW and three Fiat Chrysler executives, including former head of labor relations, Alphons Iacobelli, who was sentenced last year to 5½ years in prison — the longest sentence in the case.

Federal charges into the misuse of millions of dollars in training center funds by Fiat Chrysler executives and UAW leaders expanded to General Motors in recent weeks.

Michael Grimes, a retired senior official with the union's GM division, was charged earlier this month with wire fraud and money laundering for allegedly receiving $2 million in kickbacks from UAW vendors. He was charged in a criminal information, which indicates a guilty plea is expected at his next hearing sent for Sept. 4 in Ann Arbor.

Gary Jones, the newly-elected President of the United Auto Workers (UAW), addresses the 37th UAW Constitutional Convention June14, 2018 at Cobo Center in Detroit, Michigan.
Bill Pugliano | Getty Images

Grimes' expected guilty plea would be a major milestone in the Department of Justice investigation into one of America's largest unions. He is the first person not affiliated with Fiat Chrysler to be charged as part of the multiyear probe.

Prosecutors haven't identified any GM executives as being involved in the corruption, like they did with Fiat Chrysler.

The expansion of the investigation is expected to make ratifying the contracts between the UAW and automakers more difficult. The contracts expire Sept. 14.

The UAW, in the emailed statement Wednesday, said the "sole focus" of Jones and other leaders is "winning at the bargaining table for our members."

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Key Points
  • A multiyear federal investigation involving alleged misuse of millions of dollars designated for employee training has expanded to General Motors.
  • Michael Grimes, a retired senior official with the union's GM division, is charged with wire fraud and money laundering for allegedly receiving $2 million in kickbacks from UAW vendors.
  • GM says the alleged conduct of Grimes and other union officials is "deeply disturbing" and says it is "fully cooperating" with the government's investigation.