Tag: graft and conflicts of interest

Reformers take 6 of 14 UAW board seats, could win majority

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DETROIT — Reform-minded candidates won several races as members of the United Auto Workers union voted on their leaders in an election that stemmed from a federal bribery and embezzlement scandal involving former union officials.

In unofficial results posted early Sunday on a federal court-appointed monitor’s website, challengers took six of 14 seats on the union’s International Executive Board. They could win as many as eight, including the presidency, and control a majority, depending on the outcome of three runoff elections.

The reform candidates, most part of a slate called UAW Members United, campaigned on taking a more confrontational stance in bargaining with Detroit’s three automakers. They want to rescind concessions made to companies in previous contract talks, restoring cost-of-living pay raises and eliminating a two-tier wage and benefit system.

The adversarial stance is likely to raise costs for General Motors, Ford and Stellantis, which almost certainly would be passed on to consumers. Even without the election, costs likely would have gone up as workers seek a bigger share of billions of dollars in profits.

In the race for president, incumbent Ray Curry defeated challenger Shawn Fain by 614 votes. Curry had 38.2% of the vote to Fain’s 37.6%. But neither got a majority in the five-candidate field, so there will be a runoff election in January.

Mike Booth and Rich Boyer, both from Members United, took two of three vice president slots. Two vice president candidates from Curry’s Solidarity Team slate, incumbent Chuck Browning and Tim Bressler, will compete in a runoff for the third vice president slot.

Members United candidate Margaret Mock ousted current Secretary-Treasurer Frank Stuglin. Reform-minded candidates took three regional director slots, with another headed for a runoff.

Winners will be sworn in on Dec. 12. Ballots for the runoff elections will be mailed Jan. 12 with a Feb. 28 deadline to return them. Votes will be counted starting March 1, according to the website of Monitor Neil Barofsky.

In an interview, Fain said the election puts the companies on notice “to get ready. We’re coming for you.” He said companies are making billions of dollars and have closed or spun off plants and failed to give the Stellantis plant in Belvidere, Illinois, a new vehicle to build after it stops making its current model.

“It’s just a fact that over the years our leadership has become way too close to management,” he said.

Curry’s slate said in a statement that it is fighting for all active and retired members. “Our member expectations are high, and our team has the experience and proven track record to both build coalitions for the fight and deliver results,” it said.

Curry, elected by a vote of the International Executive Board in 2021 to replace retiring Rory Gamble, said at a September candidates’ forum that he has put financial safeguards and reforms in place and has plans to bring union members “back into greater days.” He said the union also has plans to recruit new members.

“We don’t just make false demands and deliver false hopes,” he said.

Turnout in the election for the 372,000-member union was low. Of about 1 million ballots mailed to active members and retirees, only 10.5% were returned.

The 2023 contract talks come at a critical juncture for the union, which faces a transition from internal combustion vehicles to those that run on batteries. With fewer moving parts, fewer people will be needed to make electric vehicles, and jobs making engines and transmissions could be shifted to battery assembly plants that might not be unionized.

The election came after union members last December decided to directly vote on leaders for the first time instead of having them picked by delegates to a convention.

Under the old system, convention delegates were picked by local union offices. But the new slate of officers was selected by the current leadership, and there was rarely any serious opposition.

The voting happened after 11 union officials and a late official’s spouse pleaded guilty in the corruption probe, including the two former presidents, Gary Jones and Dennis Williams. Both were sentenced to prison. The first criminal charges in the probe were filed in 2017.

To avoid a federal takeover, the union agreed to reforms and Barofsky’s appointment to oversee the UAW and elections of the executive board.

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December 4, 2022
Reform candidates lead in UAW races with 68% of vote counted

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DETROIT — Members of the United Auto Workers union appeared on Thursday to favor replacing many of their current leaders in an election that stemmed from a federal bribery and embezzlement scandal involving former union officials.

Reform-minded candidates, many part of the UAW Members United slate, are leading or close in multiple key races with about 68% of the vote counted. Many challengers campaigned on rescinding concessions made to companies in previous contract talks, including cost-of-living pay raises, elimination of a two-tier wage and benefit system, and other items.

That could raise costs for Detroit’s three automakers — General Motors, Ford and Stellantis — and almost inevitably will drive up already expensive auto prices.

With tallies from six of nine UAW regions counted, incumbent President Ray Curry had a slim lead over Shawn Fain, an international union official who started at a Stellantis plant in Kokomo, Indiana, in a five-candidate race.

Curry had 38.6% of the vote, while Fain was second with 38%. There likely will be a runoff election early next year between Fain and Curry since neither had a majority of the votes.

In the race for three vice presidents, Rich Boyer and Mike Booth, both Members United candidates, are first and second in an eight-candidate field, followed by incumbent Vice President Chuck Browning. A runoff could happen there, too.

Margaret Mock, the Members United candidate for secretary-treasurer, had 62.6% of the vote to lead incumbent Frank Stuglin at 37.4%. Where tallies have been completed, candidates who campaigned on reforming the union also won three of nine regional director positions, with another heading to a runoff.

It wasn’t clear when the vote count would be finished. The ballots are being counted by a company hired by a court-appointed monitor who is overseeing the election and the union.

Fain led the Members United ticket, which campaigned on reforming the 372,000-member UAW after the scandal. The election also has broad implications for contract talks with the Detroit auto companies that start next year.

Fain has advocated for more of a confrontational stance and has accused union leadership of complacency. He has said the UAW has had a philosophy for 40 years of viewing automakers as partners rather than adversaries.

He said it’s too early to declare a winner but said in an interview Thursday that the early vote totals are “a loud and clear message to the companies and the businesses to get ready, we’re coming for you.”

The automakers, he said, are making making the best profits in their history, yet are closing factories and costing union jobs. He gave General Motors’ 2019 closure of its Lordstown, Ohio, assembly plant as an example, plus a lack of new vehicles for Stellantis’ Belvidere, Illinois, plant, which he said has lost 3,000 workers.

At a candidates’ forum in September, Fain said union leaders should have reversed concessions made starting in 2007 and should have won job security guarantees.

“We’ve had at least 10 years with perfect conditions for regaining and improving what was lost during the Great Recession,” he said.

The contract talks come at a critical juncture for the union, which faces a transition from internal combustion vehicles to those that run on batteries. With fewer moving parts, fewer people will be needed to make electric vehicles, and jobs making engines and transmissions could be shifted to battery assembly plants that might not be unionized.

The election came after union members last December decided to directly vote on leaders for the first time instead of having them picked by delegates to a convention.

Under the old system, convention delegates were picked by local union offices. But the new slate of officers was selected by the current leadership, and there was rarely any serious opposition.

A company hired by Monitor Neil Barofsky mailed out about 1 million ballots to active and retired union members. But only 106,790, roughly 10.7%, were returned.

The voting happened after 11 union officials and a late official’s spouse pleaded guilty in the corruption probe since 2017, including the two former presidents, Gary Jones and Dennis Williams. Both were sentenced to prison.

To avoid a federal takeover, the union agreed to reforms and Barofsky’s appointment to oversee elections of the 14-member executive board.

Curry, appointed in 2021 to replace retiring Rory Gamble to lead the union, said he has put financial safeguards and reforms in place and has plans to bring union members “back into greater days.” He said at the candidates’ forum that the union also has plans to recruit new members.

“We don’t just make false demands and deliver false hopes,” he said.

————

This story has been corrected to show that 68% of the vote has been counted, not 73%.

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December 1, 2022
Reform candidates lead in UAW races with 73% of vote counted

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DETROIT — Members of the United Auto Workers union appeared on Thursday to favor replacing many of their current leaders in an election that stemmed from a federal bribery and embezzlement scandal involving former union officials.

Reform-minded candidates, many part of the UAW Members United slate, are leading or close in multiple key races with about 73% of the vote in. Many challengers campaigned on rescinding concessions made to companies in previous contract talks, including cost-of-living pay raises, elimination of a two-tier wage and benefit system, and other items.

That could raise costs for Detroit’s three automakers — General Motors, Ford and Stellantis — and almost inevitably will drive up already expensive auto prices.

With tallies from six of nine UAW regions counted, incumbent President Ray Curry had a slim lead over Shawn Fain, an international union official who started at a Stellantis plant in Kokomo, Indiana, in a five-candidate race.

Curry had 38.6% of the vote, while Fain was second with 38%. There likely will be a runoff election early next year between Fain and Curry since neither had a majority of the votes.

In the race for three vice presidents, Rich Boyer and Mike Booth, both Members United candidates, are first and second in an eight-candidate field, followed by incumbent Vice President Chuck Browning. A runoff could happen there, too.

Margaret Mock, the Members United candidate for secretary-treasurer, had 62.6% of the vote to lead incumbent Frank Stuglin at 37.4%. Where tallies have been completed, candidates who campaigned on reforming the union also won three of nine regional director positions, with another heading to a runoff.

It wasn’t clear when the vote count would be finished. The ballots are being counted by a company hired by a court-appointed monitor who is overseeing the election and the union.

Fain led the Members United ticket, which campaigned on reforming the 372,000-member UAW after the scandal. The election also has broad implications for contract talks with the Detroit auto companies that start next year.

Fain has advocated for more of a confrontational stance and has accused union leadership of complacency. He has said the UAW has had a philosophy for 40 years of viewing automakers as partners rather than adversaries.

He hasn’t declared victory but said in an interview Thursday that the early vote totals are “a loud and clear message to the companies and the businesses to get ready, we’re coming for you.”

The automakers, he said, are making making the best profits in their history, yet are closing factories and costing union jobs. He gave General Motors’ 2019 closure of its Lordstown, Ohio, assembly plant as an example, plus a lack of new vehicles for Stellantis’ Belvidere, Illinois, plant, which he said has lost 3,000 workers.

At a candidates’ forum in September, Fain said union leaders should have reversed concessions made starting in 2007 and should have won job security guarantees.

“We’ve had at least 10 years with perfect conditions for regaining and improving what was lost during the Great Recession,” he said.

The contract talks come at a critical juncture for the union, which faces a transition from internal combustion vehicles to those that run on batteries. With fewer moving parts, fewer people will be needed to make electric vehicles, and jobs making engines and transmissions could be shifted to battery assembly plants that might not be unionized.

The election came after union members last December decided to directly vote on leaders for the first time instead of having them picked by delegates to a convention.

Under the old system, convention delegates were picked by local union offices. But the new slate of officers was selected by the current leadership, and there was rarely any serious opposition.

A company hired by Monitor Neil Barofsky mailed out about 1 million ballots to active and retired union members. But only 106,790, roughly 10.7%, were returned.

The voting happened after 11 union officials and a late official’s spouse pleaded guilty in the corruption probe since 2017, including the two former presidents, Gary Jones and Dennis Williams. Both were sentenced to prison.

To avoid a federal takeover, the union agreed to reforms and Barofsky’s appointment to oversee elections of the 14-member executive board.

Curry, appointed in 2021 to replace retiring Rory Gamble to lead the union, said he has put financial safeguards and reforms in place and has plans to bring union members “back into greater days.” He said at the candidates’ forum that the union also has plans to recruit new members.

“We don’t just make false demands and deliver false hopes,” he said.

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December 1, 2022
Former tribal leader gets 3 years in casino bribery case

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BOSTON — The former leader of a Massachusetts Native American tribe convicted of accepting bribes including exercise equipment and a weekend stay at a luxury hotel from an architectural firm working with the tribe to build a casino has been sentenced to three years in prison.

Cedric Cromwell, former chair of the Mashpee Wampanoags, was also sentenced in U.S. District Court in Boston on Tuesday to a year of probation and was fined $25,000, according to prosecutors.

David DeQuattro, 56, the owner of the Rhode Island architecture and design firm, was sentenced to a year of probation under home confinement and fined $50,000.

The Cape Cod-based tribe, which currently has about 2,600 enrolled citizens, in an impact statement signed by current Chair Brian Weeden said it has been “irreparably harmed” by Cromwell’s conduct.

“For over 400 years, the Tribe has fought to preserve its culture, lands and protect its people from constant exploitation and oppression,” Weeden wrote. “And yet, we are now facing the ultimate betrayal by one elected and entrusted to lead and act in the best interests of our Tribal Nation and future seven generations.”

He noted that while Cromwell was enriching himself, tribal members “struggled under the pressures of increased homelessness, unemployment, alcohol and opioid addiction, and other traumas.”

Cromwell, 57, apologized in court.

“I will spend the rest of my life seeking redemption,” he said, The Boston Globe reported.

DeQuatto’s attorney called his client’s actions an “aberration.”

Cromwell, who also was the president of the tribe’s five-member gaming authority, received $10,000 from DeQuattro in November 2015 that was deposited into an account for a company called One Nation Development LLC, which Cromwell founded to help Native tribes with economic development, prosecutors said.

But One Nation Development had no employees and Cromwell spent the money on personal expenses, prosecutors said.

He asked for, and received from DeQuattro and his business partner, a $1,700 home gym in August 2016, prosecutors said.

Cromwell also asked DeQuattro to pay for a three-night stay at a luxury Boston hotel in May 2017 so he could celebrate his birthday with someone he described as a “special guest.” The stay cost $1,800, prosecutors said.

Cromwell was convicted in May of bribery and extortion charges. DeQuattro was convicted of a bribery charge. Cromwell still faces multiple counts of filing a false tax return.

Meanhwile, plans for the proposed $1 billion casino in Taunton remain on hold.

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November 16, 2022
Former North Dakota tribal official pleads guilty to bribery

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BISMARCK, N.D. — A former government official of the Mandan, Hidatsa and Arikara Nation accused of accepting bribes and kickbacks from a construction contractor pleaded guilty Tuesday to federal charges in North Dakota.

Randall Phelan, 58, of Mandaree, North Dakota, was an elected representative of the governing body of the Three Affiliated Tribes from the end of 2012 to the middle of 2020. Investigators said Phelan used his official position to help the contractor’s business by awarding contracts, fabricating bids and managing fraudulent invoices.

His trial had been scheduled to begin Tuesday.

Phelan and two others were originally charged with receiving hundreds of thousands of dollars from the bribery scheme that lasted for eight years on the oil-rich Fort Berthold Indian Reservation. The contractor has pleaded guilty to bribery and has been cooperating with prosecutors. Prosecutors said the business received more than $17 million over the past decade for construction work on the reservation.

Phelan pleaded guilty to conspiracy to commit bribery concerning programs receiving federal funds, honest services wire fraud and bribery concerning programs receiving federal funds. He faces a maximum penalty of 20 years in prison. Sentencing is set for Feb. 22.

Michael Hoffman, an attorney for Phelan, did not immediately respond to an email request seeking comment.

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October 25, 2022
Former veteran California FBI agent convicted of bribery

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LOS ANGELES — A former FBI agent in Northern California who handled national security issues was convicted Tuesday of accepting at least $150,000 in gifts and cash bribes to provide confidential information to a man with organized crime ties, prosecutors said.

Babak Broumand, 56, of Lafayette, was found guilty in Los Angeles of conspiracy, bribery of a public official and monetary transactions in property derived from unlawful activity, the U.S. Department of Justice said in a statement.

He could face 15 to 45 years in federal prison when he is sentenced in January.

Broumand, who joined the FBI in 1999, worked until 2018 in the bureau’s San Francisco office, where he was responsible for national security investigations, prosecutors said.

Prosecutors said from 2015 to 2018, Broumand accepted “cash, checks, private jet flights, a Ducati motorcycle, hotel stays, escorts, meals, and other items of value” in return for searching law enforcement databases to help a self-proclaimed lawyer and his criminal associates learn if they were under investigation and avoid prosecution.

Court documents refer to the lawyer only as “E.S.” but his name was Edgar Sargsyan, who earlier pleaded guilty to bribing Broumand and another federal agent and testified at his trial.

The two men were introduced at a Beverly Hills cigar club.

Sargsyan has admitted making a fortune by stealing identities, making credit card charges and taking out bank loans in their names, and while he falsely claimed to be an attorney he acknowledged actually paying a friend to take the bar exam under his name, the Los Angeles Times reported.

“To conceal the nature of their corrupt relationship, Broumand made it falsely appear that E.S. was working as an FBI source” and wrote false reports stating he was making legitimate database queries, according to the Department of Justice.

One involved Levon Termendzhyan, whom prosecutors described as an Armenian organized crime figure for whom Sargsyan had worked.

Termendzhyan was convicted in 2020 in a Utah federal court of involvement in a $1 billion fraud scheme involving renewable fuel tax credits, prosecutors said. He awaits sentencing.

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October 4, 2022