Multiple Promo Distributors Subpoenaed in Federal Corruption Probe of Auto Workers Union
Federal law enforcement agents are investigating whether members of the United Auto Workers union received illegal payments after purchasing promotional products for the union. The Detroit News reported that about 10 promo distributors have received subpoenas so far to produce documents, and the process could lead to more criminal charges. There have already been eight convictions in the investigation, including the former vice presidents of the UAW and Fiat Chysler Automobiles, though no charges have been filed against the promo companies.
Be warned: The news story leans heavily on the verbiage "trinkets and trash" to refer to the promotional products industry, which is more than a little distracting and comes off as condescending. If you can get past that, the issues at the core of the probe are certainly concerning for the industry companies involved.
The Detroit News writes:
The subpoenas shed light on the so-called "trinkets and trash" industry, a collection of companies vying for a piece of the more than $29 million spent in the last five years on promotion, advertising and UAW-branded items distributed at union rallies, conventions and factories. The items include shirts and lanyards, Frisbees and flash drives, pencils and ponchos, Kangol hats, key chains, and novelty items like bowling ball buffers.
A search function on the Detroit News report allows readers to search a database showing exactly how much money the entities spent with specific promo companies, and on what products. The overwhelming majority of products came from Custom Products Inc., Organization Services and Impressions Specialty Advertising, but several other companies are listed in the database as well.
Prosecutors said that one distributor, Wilson's Diversified Products, was hired by the UAW-Chrysler National Training Center in 2011 to provide items like shirts, coffee mugs and more, but got the job without submitting a bid or quote.
Vintage Snapback Trucker Cap, Deadstock, UAW Solidarity, Hat Mesh Foam United Auto Workers Local 1005, Made In USA, 1980's, Baseball https://t.co/vFUPdxPzDW via @Etsy #Solidarity #UAW #SnapBack #VintageEtsy #ShopSmall
— MissKittys5n10 (@kittys5n10) April 25, 2019
In July of 2012, Fiat Chrysler executives that oversaw the training center reportedly approved paying the company more than $425,000.
"FCA officials viewed those payments as an investment in 'relationship building' with UAW vice president General Holiefield," prosecutors said.
"Whenever there is a large pot of money, the government is going to try to figure out whether it was spent properly or not," Peter Henning, a Wayne State University law professor and former federal prosecutor, told the Detroit News. "Whether they find anything, that's another question."
Since 2013, the UAW's training center, which gets money from Fiat Chrysler, spent more than $22.5 million on promotional products and advertising. The UAW and its political action committee spent more than $6.7 million on those items since 2013.
"Many times, the swag is for the UAW to promote the union to its own members and the community," Kristin Dziczek, vice president of industry, labor and economics at Center for Automotive Research, told the Detroit News. "If you see someone wearing a UAW T-shirt at the grocery store, it gets people thinking a certain way about the union."
Other Detroit area automakers like GM and Ford are involved in the process, and have cooperated with law enforcement, but both declined to confirm whether they donate money to charities controlled by UAW alumni. In a statement to the Detroit News, a UAW spokesperson denied the allegations that charities run by a UAW official could not accept donations from vendors, training centers or employees.
It's at least known now that executives from Impressions Specialty Advertising and Custom Promotions have received subpoenas. The UAW paid Impressions more than $3.1 million since 2013. In 2015, Custom Promotions sold $19,806 worth of polo shirts and $16,876 worth of jackets for a negotiations event.
One company owner provided insight that could help prosecutors, however.
Steven Wojkowiak, who runs Ameritee USA, a silkscreen shop in Buffalo, received $51,000 in work from UAW in recent years. He said that it's hard to break into businesses like UAW in Detroit, as the vendors are "well embedded." He specifically mentioned one former salesman at his company meeting with a UAW official years ago, who offered to send business to his company in exchange for a free vacation.
"I didn't give nobody nothing," he said. "That's why I struggle, probably."