Monday, December 4, 2023 | Back issues
Courthouse News Service Courthouse News Service

Former Auto Union Exec Appears in Court After Resignation

A former regional director for the United Auto Workers union appeared in Detroit federal court Tuesday, just two days after stepping down amid a sprawling federal investigation into bribery and embezzlement.  

DETROIT (CN) – A former regional director for the United Auto Workers union appeared in Detroit federal court Tuesday, just two days after stepping down amid a sprawling federal investigation into bribery and embezzlement.

Vance Pearson, dressed in a black nylon jumpsuit, answered U.S. Magistrate Judge Elizabeth Stafford’s questions with a quick “yes, ma’am” when she asked if he understood the charges against him.

It was his first court appearance in Michigan since appearing in Missouri federal court after being charged in September with embezzlement of union funds, mail and wire fraud and money laundering. He did not enter a plea Tuesday and is due back in court early next year.

UAW has been rocked by a bribery scandal unveiled by a federal corruption investigation. Just last week, General Motors sued Fiat Chrysler for allegedly bribing union officials to get an unfair advantage in labor agreements.

Pearson, a high-ranking union official from St. Louis, was the second to resign his post after being pressured to leave. UAW President Gary Jones stepped down last Wednesday as the union’s International Executive Board moved to expel him and Pearson. In a statement posted to the UAW website, the board said they filed charges for the submission of inaccurate expense records. The former executives could have faced a union trial.

On Sunday, UAW announced Pearson’s resignation as Region 5 director and as a member of the union.  He had been on paid administrative leave since the charges were filed.

The 58-year-old’s biography has since been scrubbed from the UAW website. His former region covers 17 states in the western and southwestern United States, including Missouri, Texas, New Mexico and California.

Judge Stafford, appointed in 2014 by then-President Barack Obama, restricted Pearson’s travel to inside the continental United States, forced him to turn in his passport and concealed weapons permit, and ordered a $10,000 bond held against him.

Pearson agreed to adjourn his hearing until Jan. 6, 2020. It is possible he could reach a deal with prosecutors before then.

He was ordered to avoid all contact with those involved in the union scandal and was warned he would be imprisoned if he failed to appear at the next hearing.

Federal agents raided union offices in August as they confiscated cash collected as membership dues that was allegedly used for personal expenses including liquor, golf and a condominium in Palm Springs, California.

“UAW expenditures on these annual training conferences — all of which are publicly reported — are entirely reasonable," UAW spokesman Brian Rothenberg told The Detroit News in September. "Over three years, more than 650 union attendees, from all over the western half of the country, attended all-day meetings during week-long conferences. Those are the facts, which stand in contrast to unattributed allegations.”

Acting UAW President Rory Gamble, meanwhile, told the Free Press earlier this month of his intentions to clean up the tarnished labor organization.

“We intend to do everything we can to show that we can manage our business. We are setting into place new standards and things that will clean up our systems and make sure we are guarded in the future against any of these type of charges,” Gamble said. “So right now, the government is going to do what the government is going to do, but it’s my job to make sure whoever comes in and looks at this union, they’re going to be presented with a clean union.”

Gamble has moved to sell a three-bedroom luxury cottage built in northern Michigan for former union head Dennis Williams at the UAW Walter and May Reuther Family Education Center. The cottage has become a symbol of excess, featuring quartz bathroom counters and kitchen cabinets with rich wood complimented by chrome sinks.

He also plans to establish an ethics ombudsman to receive, review and respond to new complaints and allegations.

Categories / Business, Criminal, Employment, National

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.