Feds charge another UAW leader, say he received kickbacks

Robert Snell
The Detroit News

Detroit — Federal prosecutors Friday charged the former top aide to United Auto Workers Vice President Joe Ashton with receiving $123,000 during a bribery and kickback conspiracy that defrauded union workers.

Jeff Pietrzyk, 74, of Grand Island, New York, is accused of conspiring with Ashton and former UAW official Mike Grimes to receive millions in kickbacks and bribes from UAW vendors who received rigged contracts to produce union-branded watches, jackets and backpacks, according to the court filing. 

The contracts were awarded by a UAW training center jointly operated and financed by General Motors Co., which Friday was engaged in negotiations to end a five-day-old labor strike that has sent 46,000 hourly workers to the picket line.

Jeff Pietrzyk

Pietrzyk, who prosecutors say received approximately $123,000 during the alleged conspiracy, is the 11th person charged in a corruption scandal that has implicated the top echelon of the UAW, including President Gary Jones and former President Dennis Williams.

The criminal filing Friday appears designed to pressure Ashton into cooperating with federal investigators, who already have secured Grimes' conviction, said Peter Henning, a Wayne State University law professor and former federal prosecutor.

“This is their game plan,” Henning said. “You start low and make your way up the chain of command.”

Most of the details included in the criminal case Friday were first revealed last month when prosecutors charged Grimes with wire fraud conspiracy and money laundering.

Pietrzyk was charged with wire fraud and money laundering conspiracies in a criminal information, which means a guilty plea is expected. Wire fraud conspiracy is punishable by up to 20 years in prison while money laundering conspiracy is a 10-year felony.

Pietrzyk’s attorney, Robert C. Singer, said in a statement that he has been "working with the government to resolve Jeff’s involvement in this matter."

"According to the government’s allegations in the information, Jeff’s involvement in this scheme is much more limited in time and scope than his named and unnamed co-defendants,” Singer said.

“The charges against Jeff Pietrzyk are serious, and the conduct outlined in his charges is not just illegal, it is an affront to every member of the UAW," the union said in a statement. "The UAW has already made changes to its purchasing procedures that require three bids and pushed the Joint Program Centers to significantly tighten their accounting controls to prevent this type of criminal activity from happening again.

"This conduct — which was suspiciously announced in the middle of our current bargaining — must not and will not distract us from negotiating the strongest possible contract for our members.”

The charge comes one month after The Detroit News revealed investigators had accused Pietrzyk of taking kickbacks and securing hundreds of thousands of dollars for Ashton.

Grimes, who admitted receiving $1.5 million in bribes from union vendors, pleaded guilty to wire fraud conspiracy and money laundering Sept. 4 and could be sentenced to more than 4 1/2 years in federal prison.

The criminal filing accuses Pietrzyk of teaming with Grimes and a former UAW senior leader identified by prosecutors as "Union Official 1." That official, who is accused of demanding $550,000 in kickbacks and bribes from union vendors, is Ashton, four sources familiar with the investigation told The News last month. 

The alleged conspiracy started in 2006 and lasted until July 2018, prosecutors alleged.

Retired UAW Vice President Joe Ashton, left, and former UAW officials Mike Grimes and Jeff Pietrzyk are accused in a federal criminal case of scheming to defraud UAW members and a training center for blue-collar workers.

Pietrzyk, who within UAW circles was known by the nickname "Paycheck" due to his difficult-to-pronounce last name, was paid $110,055 as Ashton's top administrative assistant until retiring in 2014. He and Ashton also served on the board of the UAW-GM Center for Human Resources training center.

"GM is disappointed by the conduct of the UAW officials charged in the government’s expanding investigation," the automaker said in a statement Friday. "GM continues to cooperate with the government on its investigation."

The criminal case involves vendors being awarded contracts from the training center to produce more than $15.8 million worth of UAW-branded merchandise in exchange for paying bribes and kickbacks.

For example, in 2011, Ashton proposed buying 50,000 UAW-GM jackets using training center funds, according to sources familiar with the investigation and court records.

Grimes recommended a family-owned company identified in court records as "Vendor A," which was awarded a $6 million contract, prosecutors said.

Then, prosecutors say Pietrzyk told Grimes to demand a $300,000 kickback for "Union Official 1," who sources said is Ashton.

In this July 27, 2011, photo, General Motors Chairman and CEO Dan Akerson, from left, shakes hands with United Auto Workers President Bob King, marking the ceremonial start of labor negotiations between GM and the UAW as GM Vice President Labor Relations Cathy Clegg and UAW Vice President GM Joe Ashton look on. Ashton aide Jeff Pietrzyk is seen in the upper right corner.

Pietrzyk served as the middleman, delivering the kickbacks to Ashton, according to the government.

Ashton, 71, of Ocean View, New Jersey, continued receiving kickbacks for two years after he was promoted to GM's board of directors in 2014, according to the court records.

He resigned in December 2017, one month after The News linked him to the criminal investigation. He has not been charged with wrongdoing.

Ashton, Williams and Jones, the UAW president, are the highest-ranking UAW officials linked to a criminal investigation into whether money and illegal benefits corrupted UAW leaders and the collective bargaining process.

Pietrzyk, meanwhile, played a central role in a $4 million watch contract awarded to Ashton's chiropractor, prosecutors said.

In 2013, the UAW-GM training center awarded a $3.97 million contract to New Jersey chiropractor Marc Cohen, according to sources and the criminal case.

Marc Cohen

Ashton, who helped negotiate the contract, demanded a $250,000 kickback, prosecutors allege.

Cohen hand-delivered the kickbacks to the UAW vice president's house, prosecutors said. Ashton also told his chiropractor to pay kickbacks to Pietrzyk, according to the criminal case against Grimes and sources familiar with the investigation.

Pietrzyk received $95,000 from the chiropractor and gave $25,000 to Grimes, according to the government.