The UAW discovered during a routine audit that more than $ 2 million may have been embezzled from the UAW Local 412’s bank account in Warren, who represents workers at the Stellantis factory, union officials confirmed Thursday to Free Press.
The discovery was made by the international union as part of improved internal control protocols and audits implemented after corruption and embezzlement have rocked the union in recent years, the spokesperson for the union said. ‘UAW, Brian Rothenberg.
The findings will be documented and sent to the US Department of Labor as well as the US Department of Justice, he said.
A local member has been put on leave, Rothenberg said. The identity of this person has not been disclosed.
No criminal charges have been laid, Rothenberg said.
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The discovery of the latter problem occurred this summer.
Barofsky was not involved in this audit process, Rothenberg said.
The UAW’s national organization has confirmed the accuracy of a statement posted on a private Facebook page by Local 412 titled “UAW Enhanced Auditing Discover Local Union Official Wrongdoing; Takes Immediate Action Based on Enhanced Auditing Procedures and Ethics Guidelines ”.
The statement from Local 412 stated in full:
United Auto Workers auditors uncovered irregularities at UAW Local 412 in Warren, Michigan, and uncovered more than $ 2 million in inappropriate spending.
“As part of the enhanced UAW audit process, the UAW internal auditors discovered inappropriate personal expenses on the part of the financial secretary of UAW Local 412. The local elected officer was suspended and the findings sent to authorities, including the US Department of Labor, ”said Frank Stuglin, UAW International Secretary-Treasurer. “We have taken immediate action in this matter. “
Stuglin said the improved auditing system put in place by his predecessor, current UAW President Ray Curry, discovered the local union official’s embezzlement. “Our staff were highly trained in detailed audit follow-up procedures and discovered a very elaborate embezzlement plan by the local elected official.”
Stuglin said authorities have informed the appropriate government agencies and law enforcement agencies and the union cannot comment further.
“We have put in place a much improved audit system and while we are outraged that dues have been misappropriated, we are encouraged that the UAW auditors themselves have discovered and reported this misuse of union dues through our new audit guidelines. We are confident that these new guidelines will identify any similar activity in our union and serve as a deterrent to prevent such activity in the future. “
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The problem now may be whether the UAW International will assume control of the local union as it reorganizes its systems and changes its policies to protect members’ finances.
Jerry Witt, president of UAW Local 412, wrote a letterhead dated Tuesday to its members, acknowledging that the audit “concluded that there is evidence of significant misappropriation of local union funds by the local financial secretary. … We are working with the international union to file a bail claim for these losses. ”
Due to the “seriousness” of the matter, Witt wrote: “I recommend that the Local Executive Board consider contacting the International Union to place the local as an administrator in order to help the local to move forward. correct this violation and put the local on the right track. “
Rothenberg confirmed the integrity of the letter. He said he couldn’t comment.
The UAW provided a list of financial reforms it made in the wake of the corruption scandal:
- Hiring of four additional auditors, all with post-secondary courses in accounting / financial / tax regulation to help escalate the audit process.
- Retain a new external accounting firm – with nationwide practice and expertise in working with labor organizations.
- Develop financial training for all UAW staff responsible for all finance / accounting tasks.
- More centralized financial operations under the supervision of the office of the secretary-treasurer and subject to the new strict policies and procedures implemented as a result of the comprehensive independent audit.
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