By David Shepardson and Ben Klayman
WASHINGTON/DETROIT (Reuters) -The U.S. Attorney's Office in Detroit said Monday the United Auto Workers (UAW) union has agreed to independent oversight to resolve a five-year federal corruption investigation that ensnared two former UAW presidents.
U.S. Attorney Matthew Schneider said the UAW would pay $1.5 million to settle tax issues, make significant reforms and be overseen by an independent monitor for six years. Schneider said the civil settlement caps the investigation into the union, but said inquiries could continue against individuals.
"The union has had a problem with fraud, embezzlement and corruption," Schneider told a press conference. He added that UAW International President Rory Gamble, who was present, was not a target of the investigation.
Schneider's office has charged 15 former UAW officials as part of its investigation, and former presidents Gary Jones and Dennis Williams (NYSE:WMB) both have pleaded guilty to embezzling union funds.
The UAW represents about 400,000 U.S. workers, including workers at Detroit's Big Three automakers and in other fields. At its peak in 1979, the union had a membership of some 1.5 million.
When Schneider and Gamble met in June, they discussed possible independent oversight of future labor agreements.
Gamble was appointed president in November 2019 when his predecessor Jones was forced out after being linked to the corruption inquiry. Gamble promised from the start that he would overhaul the UAW, and previously announced a series of ethics reforms, including increased financial oversight of the union's accounting department.
In 1988, the U.S. Justice Department sued to force out senior leaders at the International Brotherhood of Teamsters union and appointed a trustee because of the union's connection to organized crime. The government oversaw the Teamsters from March 1989 until 2015, and a five-year transition period ensued.
The Federal Bureau of Investigation has been investigating allegations of illegal payoffs to UAW officials by Fiat Chrysler Automobiles (FCA) NV.
That inquiry led to rival automaker General Motors Co (NYSE:GM) filing a lawsuit against FCA last year, accusing the Italian-American company's executives of bribing UAW officials to secure labor agreements that put GM at a disadvantage.