November 26, 2019 / 12:05 PM / 12 days ago

Former UAW official charged with embezzlement appears in U.S. court

DETROIT (Reuters) - A former United Auto Workers board member charged with conspiring with other union leaders to embezzle hundreds of thousands of dollars of rank-and-file members’ dues made his first appearance in federal court in Detroit on Tuesday.

Dressed entirely in black, Vance Pearson, 58, entered no plea and was released on a $10,000 unsecured bond pending a preliminary hearing on Jan. 6.

The long interval between Pearson’s arrest in September and his first appearance suggested he could be working with authorities on a plea deal.

Pearson’s court appearance came just days after General Motors Co filed a racketeering lawsuit against Fiat Chrysler Automobiles NV (FCA) in connection with a spreading corruption probe, accusing its rival of bribing UAW officials to gain advantages at GM’s expense.

That lawsuit comes as FCA is working on a planned merger with France’s PSA, parent of Peugeot.

The probe has also involved a number of FCA executives. To date, 10 people have pleaded guilty in connection with the U.S. criminal investigation of illegal payoffs.

Pearson’s arrest in September came while the UAW was negotiating new four-year contracts with GM, Ford Motor Co and FCA. Negotiators are still working on a contract with FCA.

The salacious details in the complaint against Pearson included vast sums being spent on lavish entertainment by labor leaders - including $440 bottles of champagne originally created to please a Russian czar and scantily clad women to light union leaders’ cigars.

Pearson was the head of the union’s Region 5, which covers 17 U.S. states - a role he took over from former UAW President Gary Jones after serving as his second in command.

Jones has also been linked to the federal probe, but he has not been charged with any crime. The FBI searched his home in August.

Both Jones and Pearson resigned their posts and membership of the UAW after the union launched proceedings last week to force them from office.

Acting UAW President Rory Gamble has promised to clean up the union and avoid a possible U.S. government takeover of the labor organization.

In 1988, the U.S. Justice Department sued to force out senior leaders at the International Brotherhood of Teamsters union and appointed a trustee because of the union’s connection to organized crime.

The government oversaw the union from March 1989 until 2015, when it agreed to a five-year transition period that will end in February.

Reporting By Nick Carey; Editing by Dan Grebler and Cynthia Osterman

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