With a potentially close race for the presidency looming this fall, United Auto Workers President Ray Curry signed a memorandum boosting the pensions of members of the Staff Council, the UAW in-house union for UAW representatives responsible for contract enforcement and grievances.

The court-appointed monitor that oversees the union in the wake of its recent financial scandal also flagged a $95,000 expenditure for a backpack distributed to union members at a conference as an improper use of UAW funds because it supported the candidacy of Frank Stuglin, the administrative caucus campaign for UAW Secretary-Treasurer, the union’s second highest office.

Curry’s memorandum, which was obtained by TheDetroitBureau.com, eliminates a two-tier pension system built into the UAW’s contract with the Staff Council, which was put in place during the 2008 recession when the auto industry was reeling and the union as well as the auto companies were trimming staff and benefits.

Changes made as UAW election season gets underway

“UAW leadership and Staff Council have been in discussions regarding parity of benefits for all staff employees. It has been agreed to increase the Staff Retirement Income Plan pension multiplier from 1.01% to 2.2% for plan participants who were hired after 6/1/2008,” according to the memo. “The pension multiplier is now consistent for all staff employees, and retirees regardless of their date of hire,” noted the memo, which was distributed to plan participants and passed along to TheDetroitBureau.com.

The Staff Council negotiates its new labor pact after the conclusion of the negotiations with Detroit’s three automakers. Tim Bressler, Curry’s chief of staff said in a memo to Scott Andrews, the head of the Staff Council, a study by an outside consultant “found that plan funding is sufficient to modify the pension multiplier.”

The changes to the Staff Council contract come on the eve of what promises to be a heated election season inside the union.

During the 2018 convention, delegates approved a 31% raise in the salary of top union official by pegging the president’s rate at 1.8 times the salary of appointed staff, belong to the Staff Council.

Scandal changing UAW’s internal politics

Former UAW President Gary Jones, and his predecessor Dennis Williams, went to prison after pleading guilty for their part in a scandal that sent a dozen UAWs officers and staff to prison for theft and other violations of federal law that damaged the union’s reputation. The scandal also led to the union pleading guilty to racketeering and the installation of a court-appointed monitor as part of a settlement with the U.S. Department of Justice.

Meanwhile, the two-tier wage and benefit system where new workers get less than more senior employees is being dissolved. The UAW’s current contracts with General Motors, Ford Motor Co. and Stellantis reach the top wage tier after a long grow in period.

However, new hires at GM, Ford and Stellantis are not eligible for a traditional pension, like the one for which members of the Staff Council are eligible. 

Traditional pensions have been under pressure for years and were eliminated completely for new hires. 

The improvement in the Staff Council pension plan came as Curry, who became the UAW’s Secretary-Treasurer as part of the Jones’ slate in 2018, and other top union officers, such as Stuglin, are preparing to face union members during an election campaign in which those members and retirees will have an opportunity to vote directly for the top officers for the first time in the UAW’s history.

For more than 70 years, the union’s internal politics have been dominated by what is known has the administrative caucus in which members of the union’s professional staff have played a key role in lining up support for the caucus’ candidates, minimizing debate and suppressing criticism of the leadership from the ranks.

Federal prosecutors, who built the case against Jones and other union officials, believe direct election of officers was the best way to clean up the union.

Monitor acts on mandate to clean up union

The monitor, Washington D.C. attorney Neil Barofsky, reported Tuesday, “In March 2022, an allegation was submitted to the Monitor’s hotline that the UAW had branded certain merchandise with the names of IEB officials who were running for reelection and had distributed, or planned to distribute, the branded merchandise to attendees at UAW-hosted conferences in Spring 2022.”

Although the UAW’s new travel and entertainment Policy prohibits reimbursement of business meals above $150 per person and prohibit “excessive alcohol costs,” the T&E Policy is not expressly applicable to expenditures at conferences, according to the Monitor.

The Monitor later confirmed that a total of approximately $95,000 in Union funds were used to pay for approximately 1,500 backpacks for two conferences, branded with the name and title of Secretary-Treasurer Frank Stuglin, and that approximately 800 of them were distributed at the first of these conferences. 

“On March 30, 2022, the Monitor brought the matter to the UAW’s attention. Specifically, the Monitor expressed concern that, given the upcoming election of International Officers, the distribution of UAW-purchased branded merchandise bearing the name of a candidate could be viewed as a violation of the Labor-Management Reporting & Disclosure Act of 1959, Title IV, 29 U.S.C. § 401(g), which prohibits the contribution or application of union funds to promote the candidacy of any person in an election,” the Monitor’s report said.

In response, the UAW embroidered over Secretary-Treasurer Stuglin’s name on the backpacks that had not yet been distributed, and decided not to distribute other branded items, such as mugs and pens, bearing his name, the Monitor said.