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United Auto Workers union settles corruption probe with Justice Department

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Key Points
  • Federal prosecutors Monday announced a proposed civil settlement with the United Auto Workers regarding a multiyear corruption probe.
  • UAW President Rory Gamble and U.S. Attorney Matthew Schneider have previously discussed settlements to reform the union, including possibly using an independent monitor.
  • The probe has led to the convictions of 15 people, including two past UAW presidents, three Fiat Chrysler executives and a former GM board member who was a union leader.
UAW President Rory Gamble (left) and U.S. Attorney Matthew Schneider announce a settlement agreement to end a years-long corruption investigation into the union on Dec. 14, 2020 in Detroit.
Michael Wayland / CNBC

DETROIT — Federal prosecutors have agreed to end a multiyear corruption probe into the United Auto Workers under a proposed civil settlement that will include an independent monitor overseeing the American union for six years.

U.S. Attorney Matthew Schneider and UAW President Rory Gamble said Monday that the settlement, which must still be formally approved by the government, comes after months of negotiations between the two sides, including several voluntary reforms by the union.

Other requirements under the deal include the union conducting a memberwide vote to potentially reform its voting process and making certain repayments, including a $1.5 million payment to the Internal Revenue Service. The UAW has already paid back about $15 million to training centers for improper chargebacks uncovered by officials.

"Today we are joining together to announce that the UAW, one of the largest and most prestigious unions in the world, is now on a pathway to be free of corruption," Schneider said during a joint press conference Monday at the U.S. Attorney's Office in Detroit. "During our five-year investigation, we have uncovered a startling level of corruption and fraud by a number of senior leaders of the UAW."

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The investigation has led to convictions of 15 people, including two past UAW presidents, three Fiat Chrysler executives and a former General Motors board member who was a union leader. Prison sentences for those involved have ranged from 60 days to 6½ years. A handful of people are still awaiting sentencing.

Schneider said the settlement ends the investigation into the UAW, however, additional individuals could still be charged if other illegal activities are uncovered. He emphasized Gamble is not a target. He said investigations into Fiat Chrysler and Ford Motor are ongoing. He reconfirmed GM is no longer a target of the probe.

"This is for our members," Gamble said during the press event. "Today is about them. Today is about justice for their very hard-earned dues money and the things that they provide not only in society but their individual communities as a whole."

UAW President Rory Gamble (left) and U.S. Attorney Matthew Schneider fist bump following a settlement agreement being announced to end a years-long corruption investigation into the union on Dec. 14, 2020 in Detroit.
Michael Wayland / CNBC

Schneider thanked Gamble for his cooperation and leadership of the union to achieve the settlement. Gamble at least twice called the U.S. attorney "brother," a term commonly used within the union between members. The two ended the press conference with a fist bump.

The independent monitor, who must be approved by the government, will not be involved with collective bargaining between the union and companies where its members work. The six-year time period could be shorter or longer based on need and recommendations by the monitor.

"We are committed to making the monitor's job a very boring one," Gamble said, adding members of the union's highest-ranking board have approved the settlement deal. "We will continue to do everything in our power to make sure the mistakes of the past are never, ever repeated."

When the federal investigation into the union was made public in July 2017, it focused on a training center jointly operated by the UAW and Fiat Chrysler. But it quickly expanded to probes into similar operations with GM and Ford.