A senior United Auto Workers official from Missouri was arrested on Thursday and charged with conspiring with other union leaders to embezzle hundreds of thousands of dollars in a mushrooming corruption scandal that comes at a decisive moment in contract talks with Detroit automakers.
Vance Pearson, 58, of St. Charles, director of the union’s Region 5 and a member of the union’s International Executive Board, was charged after search warrants were executed by the FBI two weeks ago at a number of locations, including at Pearson’s UAW office and at current UAW President Gary Jones’ Michigan home.
Pearson appeared in federal court in St. Louis briefly Thursday, where he was informed of the charges against him. His lawyer declined to comment.
Pearson was not home Thursday afternoon and a message left with the woman who answered the door was not immediately returned. A reporter who visited the Region 5 office on Dunn Road in Hazelwood was told to call the headquarters in Detroit for comment.
In a statement, the UAW said that while it found the allegations “very concerning, we strongly believe that the government has misconstrued any number of facts and emphasize that these are merely allegations, not proof of wrongdoing.”
The government’s complaint notes that Pearson became “second in command” of Region 5 in January 2016, which was headed by Jones at the time. Jones, who is from O’Fallon, Missouri, has not been charged with wrongdoing. Region 5 covers 17 western and southwestern states.
The complaint said from 2014 to 2018 Pearson and other leading UAW officials “submitted fraudulent expense forms seeking reimbursement from the UAW’s Detroit headquarters for expenditures supposedly incurred in connection with Region 5 leadership and training conferences.”
The officials “used the conferences to conceal the use of hundreds of thousands of dollars in UAW funds to pay for lavish entertainment and personal spending for the conspirators,” the complaint said.
Much of the complaint centers on conferences held by the Region 5 in Palm Springs, California. The allegations include that, through a “master account” set up at a Palm Springs hotel, union officials embezzled more than $600,000 that was spent on lavish living for weeks or months at a time.
The complaint singles out a dinner at a local restaurant on New Year’s Eve 2016 that cost $6,600, including four bottles of Louis Roederer Cristal champagne for a total of $1,760.
The complaint then accurately quotes the Louis Roederer website as saying the Cristal was “created in 1876 to satisfy the demanding tastes of (Russian) Tsar Alexander II,” who was assassinated by a revolutionary in 1881.
The complaint also makes frequent reference to someone identified only as “UAW Official A,” saying government agents had seized $30,000 in cash from the individual’s residence.
To date, nine people have pleaded guilty in connection with the ongoing criminal investigation into illegal payoffs to UAW officials by Fiat Chrysler Automobiles NV executives and corruption within the UAW itself.
Last week, former UAW official Michael Grimes pleaded guilty to wire fraud and money laundering. Grimes was an official in the union’s General Motors department until his retirement in July 2018.
The union’s current four-year contract with U.S. automakers expires on Saturday. In the St. Louis area, the contract talks affect workers at the GM assembly plant in Wentzville.
Robert Patrick of the Post-Dispatch and the Associated Press contributed to this report.