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Former UAW official, GM board member charged in UAW investigation

Stock Markets Nov 06, 2019 12:02PM ET
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© Reuters. FILE PHOTO: United Auto Workers President Gary Jones in a file photo taken in July 2019.

By David Shepardson

(Reuters) - Former United Auto Workers vice president Joseph Ashton was charged on Wednesday with conspiracy to commit money laundering and wire fraud, the latest person named in a wide-ranging corruption probe into the union.

Ashton, a former General Motors Co (N:GM) board member, conspired with other union officials to receive "hundreds of thousands of dollars in bribes and kickbacks," charging documents alleged in U.S. District Court in Detroit.

The U.S. Attorney's Office said it expected to seek the forfeiture of approximately $250,000 from Ashton, who left the GM board in December 2017 amid the federal investigation.

GM said in a statement it was "deeply disturbed by Joe Ashton’s alleged criminal conduct. GM was not aware of this illegal activity until it was recently revealed by the government’s investigation."

Ashton's lawyer did not immediately comment.

Federal prosecutors said Ashton and other UAW officials steered an inflated $4 million contract to a vendor to provide 58,000 watches to UAW members. The watches were never distributed and remain in storage in Detroit.

On Sunday, UAW President Gary Jones, who has been linked https://www.reuters.com/article/us-autos-corruption-labor/federal-corruption-probe-hits-home-for-uaw-boss-contract-talks-under-storm-cloud-idUSKCN1VI229 to the corruption probe by U.S. federal officials, took a paid leave of absence.

Acting UAW President Rory Gamble said the allegations "are completely inexcusable and violate UAW’s long-standing standards of conduct ... The UAW remains focused on negotiating and finalizing strong contracts for our members, especially during this round of auto negotiations."

The FBI has been conducting a wide-ranging investigation into illegal payoffs to UAW officials by Fiat Chrysler Automobiles (MI:FCHA). The union had hoped the 2018 election of former regional director Jones as president would put the federal probe behind it.

The probe also expanded to look at the conduct of UAW officials, like Ashton, tied with managing the union's relationship with GM.

To date, 10 people have pleaded guilty in connection with the criminal investigation into illegal payoffs. Last month, Jeffery Pietrzyk, a former high-level official in the UAW’s GM Department, pleaded guilty to conspiring with other UAW officials to engage in honest services fraud by taking over $123,000 in bribes and kickbacks from UAW vendors and contractors.

The widening probe raises questions about whether the U.S. government might seek to take over the UAW.

In 1988, the U.S. Justice Department sued to force out senior leaders at the International Brotherhood of Teamsters union and appoint 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 2020.

Former UAW official, GM board member charged in UAW investigation
 

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Comments (2)
Suman Jutur
Suman Jutur Nov 06, 2019 12:14PM ET
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Union leadership is organized mafia.
Aaron Last Name
Aaron Last Name Nov 06, 2019 11:01AM ET
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time for new leadership
 
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