By Nora Naughton
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (November 7, 2019).
Federal prosecutors charged former United Auto Workers vice
president and ex- General Motors Co. board member Joe Ashton with
conspiracy to commit fraud and money laundering, according to court
documents filed Wednesday, the latest in a yearslong criminal
investigation into corruption in the union's top ranks.
Mr. Ashton, who retired from the UAW in 2014 and left the GM
board in 2017, is accused of helping to orchestrate a scheme to
personally enrich himself and other UAW officials by steering
contracts to vendors in exchange for bribes and kickbacks,
prosecutors alleged.
GM said in a statement it was disturbed by the charges involving
Mr. Ashton, and the company wasn't aware of the alleged illegal
conduct. Acting UAW President Rory Gamble said in a statement the
charges were inexcusable and violate the union's standards of
conduct.
Mr. Gamble, later said in an interview, he plans to present
reforms to the UAW's governing board in a private meeting
Thursday.
"We're going to have to embrace and adopt some very serious
proposals and put in place some very serious controls to make sure
that this does not happen again," Mr. Gamble said. He declined to
provide specifics.
Mr. Ashton's attorney, Jerome A. Ballarotto of New Jersey,
didn't immediately return a phone message requesting comment.
Mr. Ashton, who ran the UAW's GM department and led negotiations
with the auto maker earlier in the decade, is now the 13th person
charged in the Justice Department's widening criminal probe into
allegations of corruption, bribery and other financial misconduct
among top-ranking officials at the UAW, one of the nation's oldest
unions. The investigation has potentially implicated UAW President
Gary Jones, who over the weekend stepped aside to take a leave of
absence. Mr. Jones hasn't been charged and his attorney said he
took voluntary leave and didn't face pressure to do so.
Mr. Ashton is also the second former UAW vice president to be
charged in the investigation, which first became public in 2017 and
had initially focused on misuse of UAW training-center funds at
Fiat Chrysler Automobiles NV. Fiat Chrysler has said the misconduct
was perpetrated by a small group of individuals acting in their own
interest.
The latest charges mark another setback for the UAW leadership
at a time when union officials are still trying to secure new labor
contracts at Ford Motor Co. and Fiat Chrysler. The UAW late last
month reached a new labor agreement with GM after a 40-day
nationwide walkout.
The UAW's governing board is also trying to move past internal
divisions over the terms and timing of Mr. Jones's leave of absence
and mend the union's reputation, people familiar with the matter
said. On Saturday, six of the board's 13 voting members voted
against the union leader's request for paid leave, but Mr. Jones
prevailed as he was able to cast a vote, the people said.
As part of the alleged fraud scheme, Mr. Ashton in 2012 and 2013
arranged a nearly $4 million contract for his personal chiropractor
to provide more than 50,000 custom-made wristwatches to union
members, according to the charging document filed in a U.S. federal
court in Michigan. The money came from a jointly run UAW-GM
training center in Detroit, the document says.
GM and the UAW agreed to close the training center in a new
labor contract approved late last month by GM workers.
In exchange for arranging the contract, Mr. Ashton, along with
two other UAW officials, accepted hundreds of thousands of dollars
in bribes and kickbacks from the chiropractor, prosecutors alleged.
The chiropractor visited Mr. Ashton's house regularly to deliver
cash payments of $5,000 to $30,000, prosecutors said.
The watches were delivered to the training center in 2014 but
never distributed to workers and remain stored in a warehouse, the
document said.
The allegations involving Mr. Ashton come as federal
investigators continue to build a case that they say has also
uncovered evidence of UAW leaders using union funds to pay for
extravagant trips, cigars, high-end liquor and golf clubs. Some of
the most lavish spending, federal prosecutors say, happened on
trips to Palm Springs, Calif., for conferences hosted by Mr. Jones
when he was the top official at UAW Region 5.
A number of mid-level and top ranking UAW officials, two of
which were close associates of Mr. Jones, have already been charged
or convicted in the criminal probe. According to a charging
document filed by federal prosecutors, Edward Robinson, a former
UAW Region 5 official, allegedly split embezzled union dues with an
unnamed official referred to as "UAW Official A." That unnamed
official is Mr. Jones, a person familiar with the investigation
said.
Mr. Jones's attorney J. Bruce Maffeo hasn't commented directly
on the investigation.
Mr. Ashton was appointed to GM's board of directors in 2014 on
behalf of the voluntary employees' beneficiary association, or
VEBA, a major GM stockholder which administers health-care benefits
for UAW-represented retirees at GM.
--Mike Colias contributed to this article.
(END) Dow Jones Newswires
November 07, 2019 02:47 ET (07:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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