Former U.A.W. Official Pleads Guilty in Corruption Scandal

Mr. Pearson’s guilty plea stems from a yearslong federal investigation that has uncovered the improper use of millions of dollars of funds and bribery of union officials by auto executives, leading to multiple convictions. In some cases, money was spent on personal travel and high-priced items including Rolex watches.

Three former Fiat Chrysler executives have been sentenced on charges that they allowed U.A.W. officials to divert money from worker training to personal travel and shopping. One of the Fiat Chrysler executives was found to have used training funds to buy a Ferrari sports car and renovate his home. Mr. Pearson is the 12th defendant to plead guilty in the scandal.

The allegations have also prompted a lawsuit by General Motors accusing Fiat Chrysler of bribing union officials to get a leg up on G.M. by manipulating labor costs.

At the center of the embezzlement scheme was an accounting device known as a “master account,” which union officials set up at hotels in cities like Palm Springs, Calif., ostensibly to cover expenses during union conferences.

But in practice, according to prosecutors, union officials billed to the accounts hundreds of thousands of dollars in expenses incurred outside the hotels for weeks before and after the conferences, including villa rentals, cigars and golf apparel.

In previous court filings, prosecutors have said that Mr. Jones directed union officials to set up the accounts, and that Mr. Pearson was involved in doing so.

The plea agreement on Friday provided additional detail regarding Mr. Pearson’s involvement, including his falsely telling a U.A.W. accounting official that an expense of over $19,000, which had been labeled “outside vendors,” was for meals. In fact, according to the plea agreement, the spending was for golf green fees and over $10,000 in golf paraphernalia bought by U.A.W. officials, including Mr. Pearson and Mr. Jones.

Article source: https://www.nytimes.com/2020/02/07/business/uaw-vance-pearson-guilty.html?emc=rss&partner=rss