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UAW President Shawn Fain under investigation by federal watchdog, court filing reveals

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Detroit — United Auto Workers President Shawn Fain is under investigation by the court-appointed watchdog tasked with eliminating corruption, according to a federal court filing, one of a series of probes targeting top leaders of the scandal-plagued union.

The watchdog, monitor Neil Barofsky, revealed the probe Monday while accusing union leaders of obstructing and interfering with attempts to access information, actions that could serve as an apparent violation of the 2020 consent decree that averted a full-scale takeover of the UAW by the Justice Department.

In a federal court filing, Barofsky described an erosion of cooperation by union leaders in February after he revealed investigations targeting members of the UAW’s governing International Executive Board, including Fain, Secretary-Treasurer Margaret Mock and one of the union’s regional directors who is not named in the documents.

Barofsky said he is investigating a fight between Fain and Mock, who accused the union president of removing her authority in retaliation for her refusal or reluctance to authorize spending money for Fain’s office, according to the filing.

The monitor also revealed he is investigating whether Fain retaliated against one of the UAW’s vice presidents. Separately, Barofsky said he opened an unrelated investigation in April into a regional director after receiving allegations of potential embezzlement.

“With more than three months having passed since the inception of the monitor’s investigation, and only a small fraction of the requested documents produced, the monitor’s assessment is that the union’s delay of relevant documents is obstructing and interfering with his access to information needed for his investigative work, and, if left unaddressed, is an apparent violation of the consent decree,” Barofsky wrote.

The investigation does not appear to involve criminal allegations. However, Barofsky has the ability to bring charges seeking to discipline, remove, suspend, expel and fine UAW officers and members.

“At this stage, it is important to emphasize that the allegations are just allegations,” Barofsky wrote. “They prove nothing in themselves, and nothing in this report should be construed as reaching any conclusion about possible charges, if any, for suspected misconduct.”

The court filing marks continued fallout from a high-profile scandal that ended with the UAW being subjected to years of federal oversight in 2020 and sent more than a dozen people to prison. That includes Fiat Chrysler Automobiles executives and two former UAW presidents, Gary Jones and Dennis Williams. UAW labor leaders were convicted of a pattern of corruption that included breaking federal labor laws, stealing union funds and receiving bribes, kickbacks and illegal benefits from contractors and auto executives.

“Taking our union in a new direction means sometimes you have to rock the boat, and that upsets some people who want to keep the status quo, but our membership expects better and deserves better than the old business as usual,” Fain said in a statement.

“We encourage the monitor to investigate whatever claims are brought to their office, because we know what they’ll find: a UAW leadership committed to serving the membership, and running a democratic union. We’re staying focused on winning record contracts, growing our union, and fighting for economic and social justice on and off the job.”

Mock declined comment on the monitor’s investigation and findings.

“If the government takes over the union, Shawn Fain will quickly become one of the most despised leaders by the rank-and-file,” said Erik Gordon, a professor at the University of Michigan’s Ross School of Business.

Barofsky has support from the Justice Department. Prosecutors told him the union’s position is making it difficult, if not impossible, for the monitor to remove fraud, corruption and illegality from within the UAW, he wrote.

“Notably, the union’s secretary-treasurer has also disavowed the union’s current position as non-cooperative and inconsistent with her own direction to union staff to fully cooperate,” Barofsky wrote.

The monitor wrote that he has tried for months to gather information to conduct a full investigation “but the union has effectively slow-rolled the monitor’s access to requested documents.”

Union leaders have produced a “very small” portion of documents, about 2,600 out of more than 116,000 records, Barofsky wrote. And most of those records were shared after receiving a draft last week of the scathing report filed in court Monday.

“There has been a similar lack of production for the monitor’s embezzlement investigation into one of the union’s regional directors,” Barofsky wrote. There are no additional details about the alleged embezzlement.

Barofsky describes a shift in the level of cooperation from UAW leaders. As recently as December, before the investigation started, Fain told underlings to answer questions from the monitor “without hesitation” and vowed to share information.

That stance, however, has changed, Barofsky wrote: “The union’s arguments for delaying, and potentially denying, the monitor’s access to documents marks a shift in its position on cooperation.”

Allegations about UAW leaders not cooperating are unsurprising, Gordon said: “Fain is one of those guys who will fight anybody in the room. That’s sort of Shawn Fain’s approach to life.

“I’m not sure how angry members will be about not cooperating unless not cooperating results in the government taking over the union, but if there is talk of corruption still going on, Fain might be a one-termer,” Gordon added.

In his campaign and administration, Fain has emphasized how directly elected leadership would clean out the union. He’s emphasized transparency in decisions to make public offers from the Detroit Three automakers during last fall’s contract negotiations.

“Fain has been unusually transparent to date,” said Harley Shaiken, a University of California-Berkeley professor who specializes in labor and the global economy. “There’s a spirit that is unmistakable in the union about involving the members in what the union is doing. The monitor clearly has concerns, but he’s not making public what those concerns are in any detail.”

Still, the report indicates there is a problem within the union regarding how it’s managing its internal operations and ensuring it responds to these kinds of requests in a timely manner, said Marick Masters, professor emeritus of management at Wayne State University.

“It’s a bad look,” he said. “It suggests a general management problem, which is understandable given the newness of officials and the volume they’ve had to deal with, the monitor and his policy recommendations, and the promises they’ve made of transparency. With all the activities they’ve been involved in — the strike, the contracts outside of the Big 3 and the organizing efforts — it may be too much for them to handle.”

After securing recording contracts with the Detroit Three automakers, the UAW announced a $40 million organizing campaign at non-union automotive and battery plants. Workers at a Volkswagen AG plant in Tennessee voted to organize with the UAW, but Mercedes-Benz Group employees in Alabama rejected a unionization election last month.

“It will be red flags,” said Masters regarding how prospective UAW members could look at the situation. “They’ll say they don’t seem to have their act together. There’s concern whether they can process their business properly.”

Barofsky also revealed disciplinary steps taken against several high-ranking officials linked to Williams and the UAW’s past. That includes Amy Loasching, former administrative assistant to Williams. The monitor concluded that Loasching participated in an embezzlement scheme involving top UAW officials.

“The monitor found evidence that UAW officials improperly authorized disbursement of, and Loasching improperly accepted, approximately $25,000 of UAW funds for Loasching’s personal benefit, including for lodging, golf outings and apparel, and meals,” Barofsky wrote.

He also alleges Loasching improperly directed UAW maintenance employees to work on her condominium while on union time. Barofsky tried to question Loasching. Instead, she resigned, leading the monitor to expel her from the union June 6.

Loasching has been under scrutiny since FBI agents raided her home in Wisconsin in August 2019. The search was part of a nationwide series of raids targeting UAW officials and included searches at the homes of Jones and Williams and the union’s Black Lake resort in northern Michigan.

Loasching was never charged with a crime.

The report comes after Fain last month removed UAW Vice President Rich Boyer as head of the Stellantis Department. Fain issued a memorandum asserting the action was because of a “dereliction of duty” by Boyer in connection with certain collective bargaining issues, according to the monitor’s report. Boyer said it was about the refusal to remove a staff member.

“There’s concern whether the union is effectively representing the workers in terms of the action taken with Boyer at Stellantis,” Masters said. “With the allegation of embezzlement by a regional director, they’re suggesting improper financial management. All those things just resurrect the residue of the scandal that the UAW was involved in.”

In February, the International Executive Board removed Mock from overseeing several departments, including the union’s Women’s Department and the Technical, Office, & Professional (TOP) Department.

Mock allegedly “improperly denied” reimbursement requests, organizing effort expenditures and strike-related costs, according to the Unite All Workers for Democracy Caucus, which had endorsed Mock in the 2023 election and said it was citing from a report by the UAW’s compliance director. Additionally, it alleged Mock withheld approval of routine expenditures in an attempt to get IEB votes.

Mock defended her actions in a statement, stating she was adhering to the policies of her role.

rsnell@detroitnews.com

@robertsnellnews

bnoble@detroitnews.com

@BreanaCNoble

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