United Auto Workers President Shawn Fain is under investigation by the union’s federal corruption watchdog, posing a serious threat to a union celebrity who has taken over some of the world’s largest companies and built a close relationship with the Biden administration.
The court-appointed monitor, Neil Barofsky of Jenner & Block LLP, said in a filing Monday that he is investigating allegations that Fain retaliated against another union official. The 36-page report details claims of increased opposition and non-cooperation by the union, as well as delayed access to documents required under a sweeping consent decree that avoided a full-fledged government takeover in 2020.
The monitor’s report, filed in the U.S. District Court for the Eastern District of Michigan, is a liability to Fain, who narrowly won the presidency last year by promising to eschew top-down leadership and backroom deals that plagued his predecessors. While it’s not yet clear whether the allegations could expose Fain to legal trouble, the document paints a portrait of an organization deeply skeptical of federal efforts to keep the union free of corruption — a stark contrast to Fain’s public image as morally centered activist.
The report came the same day the UAW reached a historic contract agreement with electric vehicle battery maker Ultium Cells LLC, a key step in Fain’s agenda to ease the transition from gas-powered cars. The deal would more than double wages, from $16.50 an hour at the start of the union contract to $35 after a year of employment, building on gains made last year during a 46-day strike against the three Detroit automakers.
Fain also led a campaign in April to unionize a Volkswagen plant in Chattanooga, Tennessee, achieving the South’s first major union victory in decades. But the momentum sputtered a month later when Mercedes workers in Vance, Alabama, firmly rejected the union.
The report identifies at least two union officials who say they faced retaliation for not approving certain expenses requested by Fain. Barofsky’s investigation focuses on a recent incident in which Fain stripped the duties of an unnamed union vice president who oversaw the UAW’s relationship with Stellantis, and placed the division back under his own control on May 29, citing the official’s “dereliction of duty” in connection with collective bargaining. That vice president was identified by the Detroit Free Press as Rich Boyer.
Barofsky said he later received accusations from that official and other unnamed union staff that Fain’s reasoning was flawed.
The real reason, they said, was that the vice president refused to “engage in financial misconduct for the benefit of others.” The report does not say whether Fain is personally accused of wrongdoing, and suggests the allegations have not been verified.
“At this stage it is important to emphasize that the allegations are merely accusations,” the report said. “They in themselves prove nothing, and nothing in this report should be construed as concluding any charges for alleged misconduct.”
In a statement, Fain denied the allegations and said they stem from his efforts to change the union.
“When we take our union in a new direction, sometimes you have to shake things up, and that upsets people who want to maintain the status quo, but our members expect better and deserve better than the old way of doing things,” Fain said. “We encourage the Monitor to investigate any claims brought to their office because we know what they will find: a UAW leadership committed to serving its members and running a democratic union. We remain focused on winning record deals, growing our union and fighting for economic and social justice both at work and beyond.”
But perhaps just as damaging are allegations that the union has virtually stopped cooperating with — and in some cases even thwarted — a slew of investigations after the Monitor began investigating top officials. Barofsky’s report says cooperation between the unions began to erode in February after he began investigating Fain, secretary-treasurer Margaret Mock and a union regional director.
According to the report, the UAW has slow-moving documents related to a February decision by the board of directors to curtail some of Mock’s power. The U.S. Department of Justice supported the Monitor’s statement in the report, saying the union “makes it difficult, if not impossible, for the Monitor to fulfill its mandate to remove fraud, corruption and illegality within the UAW.”
The investigation into Fain is related to another investigation into a decision by the board of directors to limit Mock’s power. The board voted in February to strip Mock of some departments in response to allegations that she withheld money for political influence and failed to approve supplies for the strike last fall.
Mock said in response that the measure was in retaliation for “the refusal or unwillingness” to approve expenditures that would benefit Fain’s office, the report said.
The thing is USA vs. UAWED Mich., No. 20-cv-13293, status report 6/10/24.