Ghost of 1989 Teamsters takeover haunts UAW

DETROIT — As hundreds of UAW members from across the nation gather here this week to set priorities for upcoming negotiations with the Detroit automakers, there's an undercurrent of fear that a dark episode of labor history could repeat itself.

It was 30 years ago this week that the federal government seized temporary operational control of the Teamsters union under a consent decree to settle racketeering and corruption charges brought by then-U.S. Attorney Rudy Giuliani.

The action placed the once-powerful union in receivership under the watch of federal officials. It wasn't until 2015, 26 years later, that the feds partly let go and agreed to end the consent decree. Even now, the union remains under some oversight as part of a five-year "transition period."

The specter of that historic intervention now hangs over the UAW, which is facing a federal corruption and conspiracy investigation of its own. Already, seven people — two formerly with Fiat Chrysler Automobiles and five affiliated with the UAW — have been charged and pleaded guilty in the case, which stemmed from the misuse of funds from a training center jointly operated by FCA and the union. More charges are expected as the probe continues.

The circumstances of the Teamsters and UAW cases differ widely. The Teamsters tumbled into federal receivership after a long and sordid history of ties to organized and even violent crime. The UAW investigation has turned up nothing of the sort, focusing mainly on allegations of bribery and other financial misdeeds.

But three well-placed union sources, including two in leadership positions, told Automotive News that there is concern within UAW headquarters that the government could push to prosecute the case under the Racketeer Influenced and Corrupt Organizations Act, possibly leading to federal oversight.

While there's no sign that the government intends to do so, legal experts say it is a possibility if the investigation uncovers evidence that points to a widespread conspiracy. Although RICO is best-known to be used against organized crime, it can and has been used to prosecute widespread corruption in organizations or push for a settlement.

"It doesn't have to be organized crime in a literal sense," said attorney Edwin Stier, a former state and federal prosecutor. "It has to be a continuous pattern of racketeering as defined by the statute."

Specifically, violations of the Labor Management Relations Act, which has been the basis for the government's case against UAW and FCA officials, are considered among the predicate crimes used to establish a pattern of corruption under RICO.

Stier, who led an anti-corruption task force for the Teamsters from 1999 to 2004, said it's far from clear whether the federal government would want to take such an action.

"I"m not sure the Department of Justice likes to bring RICO cases any more," Stier said. "They're complicated, and they drag on for years and years."

In a statement, UAW spokesman Brian Rothenberg said the union is "focused on bargaining for better wages, health and safety improvements, and better working conditions for our members." It dismissed the notion of a RICO action being a concern as "salacious gossip" and "pure conjecture."

The Justice Department declined to comment and hasn't made any public comments regarding the use of RICO in the UAW case.

The Justice Department investigation into the UAW started at least four years ago with the jointly operated UAW-Chrysler National Training Center, but it expanded to include inquiries into General Motors and Ford Motor Co., which have similar training operations. No one outside FCA or not linked to the union's FCA Department has been charged with any crimes.

The UAW has strongly denied that the misappropriation of training center funds could have compromised bargaining, as prosecutors allege, saying the union has thorough checks and balances in place, including a full membership vote on any labor agreement.

The scandal could nonetheless complicate what are expected to be contentious labor talks this summer between the UAW and Detroit 3.

Peter Henning, a Wayne State University law professor and former federal prosecutor, said he doesn't believe RICO charges are likely unless the case spreads to other automakers.

"If it was just one company, RICO might be too much," he said. "Whereas, if there were issues involving GM and Ford, maybe the U.S. Justice Department would go in that direction."

The Teamsters investigation and monitoring led to the ouster of hundreds of union leaders and members. As part of its enforcement, the government also instituted direct elections for leadership positions.

Some UAW members have voiced support for direct elections. The UAW currently chooses top officers through an administrative caucus — a group made up largely of existing officers.