Former GM board member pleads guilty in UAW federal probe

By Graeme Roberts | 5 December 2019

Former General Motors board member Joe Ashton, a retired United Auto Workers leader, has pleaded guilty to criminal charges as part of an ongoing federal corruption probe into the union.

CNBC said the guilty plea was part of a deal with US prosecutors that included Ashton forfeiting US$250,000 he admitted to illegally receiving in bribes and kickbacks from a vendor of the union.

Ashton, who resigned from the GM board in December 2017 after being linked to the corruption, pleaded guilty to charges of fraud and money laundering conspiracies. Money laundering is punishable by up to 10 years in prison, while the fraud charge could be up to 20 years. However, federal prosecutors suggested his sentence be between 30 and 37 months as part of the plea deal.

CNBC noted Ashton, 71, is one of 13 people charged as part of the federal corruption probe, including 10 officials affiliated with the union and three Fiat Chrysler executives. Ashton is the 11th to be convicted thus far, including two union officials who admitted to assisting him in the schemes.

CNBC sait it was unclear whether Ashton was cooperating with federal prosecutors as part of the ongoing investigation. There was no cooperation agreement as part of the plea deal.

The charges centered on Ashton's position overseeing a jointly operated training centre with GM known as the Center for Human Resources which the company recently announced plans to dissolve as part of its new labour agreement with the union. Ashton oversaw the facility from 2010-2014, when he retired from the union.

A scheme identified by federal prosecutors involved a nearly $4m contract with the training facility for commemorative watches. According to prosecutors, Ashton demanded $250,000 from the vendor, which he had instructed to create a new company to produce the watches, which were never distributed to members.

GM, in a statement cited by CNBC, called Ashton's actions "outrageous". The company reiterated that it "was not aware of his illegal activity until it was recently revealed by the government's investigation". Nor was the company aware that "he allegedly continued to benefit from this conduct" while a member of the board, it said.

The UAW, in a statement cited by CNBC, condemned Ashton's actions: "The crimes that Joe Ashton has plead guilty to are against everything we stand for as a union, demonstrate his self-interest, and signify his lack of respect for the oath he took to protect the sacred dues money of our UAW brothers and sisters."

Ashton's guilty plea came days after the UAW announced "stringent changes to the UAW's financial procedures and processes". They included a new external auditing firm and additional internal auditors, among other measures.