The United Auto Workers' court-appointed monitor on Friday filed in federal court a report that describes a continuing "culture of fear of retaliation" in the union, concerns over centralizing oversight in the president's office and some slowness on instituting adopted reforms.

The 10th status update filed in the U.S. Eastern District Court of Michigan comes amid heightened tensions between the Detroit-based union and its monitor, attorney Neil Barofsky. He's investigating retaliation claims against President Shawn Fain in light of the removals of Secretary-Treasurer Margaret Mock and Vice President Rich Boyer from overseeing previously assigned departments.

Meanwhile, the union and monitor are seeking clarification from the court on the consent decree over whether the union can withhold from the monitor sensitive information around collective bargaining, organizing and attorney-client privileges.

A request for comment was left with a UAW spokesperson late Friday afternoon.

The Detroit-based union is midway through its six-year federal mentorship instituted as a part of a 2020 consent decree with the U.S. Justice Department following a years-long corruption scandal that entangled several former UAW officials, including presidents Gary Jones and Dennis Williams, and former Fiat Chrysler Automobiles NV executives.

Barofsky's investigation into Fain doesn't appear to involve criminal allegations. However, Barofsky has the ability to bring charges seeking to discipline, remove, suspend, expel and fine UAW officers and members.

He was appointed as a part of efforts to put the union on a better path. Although the union has adopted almost all of the 38 compliance-related recommendations the monitor previously put forth, Barofsky raised concerns over the lack of urgency in implementing some of those reforms and persistent responses from UAW over a "toxic" fear of retaliation for reporting potential misconduct.

A recent culture assessment conducted by the union's third-party Internal Audit function, one of the recommendations from the monitor that the UAW adopted, surveyed hundreds of union staff. Of the approximately 100 respondents who reported they witnessed "unethical behavior or misconduct" during the last year, more than 30% said they didn't report the misconduct, Barofsky wrote. And of all participants, more than 40% said they would decline to report because of retaliation fears.

"If left unchecked, these issues will inevitably impede the Union’s efforts to create a culture of compliance," the monitor wrote. "No matter how strong its architecture of policies and procedures, the Union cannot detect and prevent malfeasance, financial or otherwise, if such a sizable portion of its employees fear speaking up when they see it."

Aggravating those fears, he said, was the decision in February by the UAW's governing International Executive Board to remove Mock from overseeing nine departments, alleging she misused her treasury powers, which she denies. Adding to that was the reassigning of the Stellantis Department from Boyer to the president's office in May. Fain in the decision cited actions or lack thereof related to collective bargaining. Barofsky disclosed earlier this week in a court filing that he is investigating whether Fain had demanded that Boyer take action to benefit the president's fiancée and her sister.

"Although the Monitor will make no judgment on whether the actions of the President were appropriate until after he concludes the investigation described in the Monitor’s Ninth Status Report, these events have been perceived by Union staff — that already has significant concerns about a 'culture of fear of retribution' — as confirmation that even the highest-ranked Union officials can be subject to retaliation," Barofsky wrote.

"Specifically, reports to the Monitor’s Hotline from Union staff have cited the actions taken against the Secretary-Treasurer and Vice President as driving retaliation fears that reporting alleged abuses might lead to retribution from the President’s Office," he continued. "Given the fragility of the Union’s cultural perception of retaliation, whether they were appropriate or not, how these recent acts are perceived by the Union’s staff must be taken into account when tackling this persistent cultural challenge."

The Internal Audit urged the board in an April meeting to take "immediate actions" and issued multiple recommendations to address the cultural problems, Barofsky wrote. His office contributed additional suggestions, bringing the total to 18 action steps. They include creating a new Culture Committee to develop a plan to implement the recommendations, sharing results of the culture assessment to staff with ways in which it is addressing retaliation fears, and holding an annual all-staff meeting "to emphasize compliance and ethics as core Union values." The last meeting was in November 2022 prior to Fain's election. One has been scheduled for October.

"The pace of taking these actions is critical, and, in carrying out these reforms, it is essential for the Union to seize the moment to address the concerns of its staff with a sense of energy and urgency," Barofsky wrote. "The Union, however, has not yet demonstrated the appropriate sense of urgency and concern in these areas, as indicated, among other things, by the fact that its Culture Committee will not conduct its first meeting until later this month, nearly three months after the IEB voted to create it."

Marick Masters, a professor emeritus of business at Wayne State University, said it would be a good idea, in the name of transparency for the UAW's membership, to release the culture assessment report itself.

The status update offers useful background about the environment inside the union, Masters said. But the larger issue at play continues to be the monitor's attempts to obtain more documents from the union so he can dig deeper into retaliation claims against Fain as well as other concerns.

"What still remains to be seen is what the investigation by the monitor is going to produce," the professor said.

Masters said the latest filing does suggest that there still appears to be an inadequate system of checks and balances within the union, and that some of the past cultural problems that helped foster corruption haven't yet been rooted out.

Barofsky also noted the IEB moved the Purchasing and Information Technology Services departments to Fain's office from Mock's and removed certain policy approvals from her, placing them with the newly created compliance director position, which falls under the president's office.

"These changes consolidate authority under the control of the President’s Office and risk diluting the role of the Secretary-Treasurer as a potential independent check on actions that pertain to financial approvals and oversight of expenditures," Barofsky wrote. "The Union must tread carefully in removing potential checks and balances on authority — especially those that concern financial matters — given the Union’s history of financial corruption, the cultural concerns still present at the Union, and the relative nascency of its compliance program."

Barofsky also raised concerns that the union in February adopted new structural and policy changes without meeting "the Monitor's expectations for transparency" by not providing adequate notice. Barofsky said he sent a letter more than three months ago to clarify his expectations with several recommendations to prevent future lapses in communication. The union, he said, hasn't accepted those recommendations, stating instead that it would consider them.

Barofsky said this refusal combined with the unsatisfactory speed at which the union is turning over documents related to his investigations "sends a troubling signal about its previously stated commitment toward transparency with the Monitor."

Despite the concerns, Barofsky did report "the UAW has made significant strides in building a sustainable compliance regime." That includes the hiring of a compliance director, though he noted the work "might be underfunded." Additionally, the union has created a Compliance and Ethics Committee and hired a new external service provider as its Internal Audit, which has done an "impressive array of work," including identifying ways the UAW can strengthen its internal controls that the union has accepted.

He said "commendable progress" has been made on implementing new policies, procedures and training to improve transparency, reduce favoritism, rebuild trust and prevent financial misconduct. That includes strong review procedures in vendor selection, an area that had been used to solicit kickbacks and bribes during the corruption scandal.

Some of those procedures, though, were slow to be implemented. The union, Barofsky wrote, "failed to fully implement, communicate, or train personnel" on a new policy governing conference-related expenditures for more than a year after it was approved, resulting in inconsistent observance. It also took time in agreeing to adopt measures to combat perceptions of nepotism and favoritism. They include creating job descriptions for all positions and generating a list of roles that are "political appointments" and exempt from competitive hiring.

Barofsky also noted despite fears of retaliation, UAW staff report strong senses of purpose and fufillment in their roles and feel “motivated and inspired” by the union’s identity.

"Although the Union should be commended for the work noted above," Barofsky said, "there is still more work to do to fortify these areas."

(Detroit News staff writer Robert Snell contributed.)

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