But right now, Detroit is dealing with a two-track wave of corruption that touches public officials as well as the once-mighty United Auto Workers.
The Detroit News estimates that more than 100 labor leaders, police officers, politicians and others have been caught up in investigations that simply keep mounting.
The torrent of scandals may alarm Detroit boosters, who have poured in money to polish up the formerly battered downtown for years, cheering on the city as it emerged from the country’s biggest municipal bankruptcy in 2013. Billionaire businessman Dan Gilbert alone “invested or allocated an estimated $5.6 billion in about 100 Detroit properties through his Bedrock real estate firm,” NPR reported in 2018.
Urbanist Richard Florida, author of “The Rise of the Creative Class,” says even wealthy cities such as New York and San Francisco are looking fragile amid the pandemic, “and it is especially fragile now in older industrial Midwest cities like Detroit.”
Charges of labor-union corruption might also be greeted with a yawn, except that the United Auto Workers was for decades regarded as relatively clean under the helm of its strait-laced leader, Walter Reuther.
This month, former UAW presidents Gary Jones and Dennis Williams reported to their respective prisons for sentences that involved embezzling millions of dollars in union funds. A sweeping federal investigation found they were among a group of union officials who spent workers’ money on luxury condos in Palm Springs, golf equipment and gourmet meals.
“Reuther would have been appalled,” says Nelsen Lichtenstein, Reuther’s biographer and a history professor at the University of California at Santa Barbara. “He prided himself on his Boy Scout reputation.”
Given the carmakers’ bankruptcy filings in the past decade, and the UAW’s shrunken size, from its peak of some 1.5 million members in 1979, to fewer than 400,000 in 2020, it might seem incredible that there was any money to steal.
But Matthew Schneider, the former U.S. district attorney who prosecuted both public and union corruption cases, says the UAW leadership found a honey pot: retraining money.
Beginning in the 1980s, the union negotiated funds so that laid-off workers could begin new lives in other professions. UAW and car company officials jointly administered programs, which led to friendly relationships that union traditionalists thought got too cozy.
The retraining money wasn’t carefully tracked, Schneider says, and it became a tempting source for anyone with itchy fingers.
Investigators also saw the union giving kickbacks to vendors, he said, such as one that made jackets for a union local, as well as evidence of dues money spent on non-union business.
His lightbulb moment came two years ago, when 48,000 General Motors workers walked out over demands for more job security and a faster hiring process for temporary workers. “The workers are on strike, barely getting by, and the leadership is living an incredibly extravagant lifestyle,” Schneider says.
Meanwhile, the federal investigation of political corruption in Detroit also continues, just when the city seemed poised to resume its comeback from bankruptcy, after stalling during the pandemic.
“The bankruptcy fixed the problems it could fix, but one of the problems it couldn’t fix [was] the greedy, evil nature of some human beings,” Schneider says. “It doesn’t matter what shape the city is in.”
This week, Detroit Mayor Mike Duggan presided at the groundbreaking for the city’s first all-new residential high-rise built since the 1990s, combining condos and apartments.
If Detroit wants similar investments to follow, says Florida, leaders in the city and region must “double down to beat back any semblance of corruption.”
Agreed. The city has come too far since 2013 to let all that progress slip away.