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Judge sends former UAW VP and GM board member Ashton to prison for 2 1/2 years

Robert Snell
The Detroit News

Detroit — Former United Auto Workers Vice President Joe Ashton was sentenced to 2 1/2 years in federal prison Tuesday for taking $250,000 in kickbacks from a union vendor, the second-longest sentence issued during a years-long crackdown on auto industry corruption.

The sentencing ends the legal odyssey of the highest-ranking person charged during a scandal that has pushed the UAW to the edge of federal oversight and led to 15 convictions of auto industry figures, including former UAW presidents Gary Jones and Dennis Williams. The conviction and sentence provide additional evidence that could be used by federal prosecutors as they mull seizing control of the UAW for as long as a decade to root out corruption within one of the nation's most influential unions.

Former UAW Vice President Joe Ashton

The ongoing investigation has uncovered a wide range of illegal conduct by auto industry figures, some scheming together, some acting on their own. The crimes uncovered include breaking federal labor laws, stealing union funds, receiving bribes and illegal benefits and trying to cover up the crimes.

Ashton, 72, of Ocean View, New Jersey, also served on the board of General Motors Co. until abruptly resigning in 2017. He was sentenced almost one year after pleading guilty to receiving kickbacks from his chiropractor who received a rigged $4 million contract to produce commemorative union wristwatches.

Ashton, who participated in the Zoom hearing from an undisclosed location, leaned forward and appeared shocked by the sentence after requesting leniency and expressing regret.

“I betrayed the trust my union members had in me for over 50 years and for that I am genuinely sorry,” Ashton said, reading from a prepared statement. “No apology will ever change the damage that I have done.”

Ashton's crimes were motivated by "pure greed" despite a six-figure salary, lavish entertainment and travel provided by the union, Assistant U.S. Attorney Frances Carlson said: "He didn’t need the money, but he wanted it.”

The case involved "some very large victims,” U.S. District Judge Bernard Friedman said. “So we have to do something. We have to send a message and let people know the criminal justice system is not a system only for people on the streets selling drugs.”

Ashton is the third UAW leader sentenced for pocketing kickbacks and bribes from entrepreneurs in the so-called "trinkets and trash" industry, a collection of promotion companies that sell everything from rain ponchos to commemorative made-in-China pens honoring UAW President Rory Gamble. Ashton's top aide, Jeff Pietrzyk, is awaiting a likely prison sentence and Mike Grimes, who worked for UAW Vice President Cindy Estrada, is serving a 28-month sentence in federal prison.

One year ago, Gamble announced the UAW would ban spending training money on promotional items, and the union had previously implemented a contracting policy requiring three bids — though a union spokesman declined to document whether the new rules were followed. Since then, the UAW and its political action committee continued buying trinkets and trash from companies linked to the federal investigation while retired labor leaders paraded into court to plead guilty to federal crimes.

Until Jan. 10.

UAW President Rory Gamble under federal investigation

That is one day after a front-page story in The Detroit News revealed federal agents were probing financial ties among Gamble, retired Vice President Jimmy Settles and one of the union's highest-paid vendors.

The agents were investigating whether UAW leaders received cash kickbacks or bribes at a Detroit strip club in exchange for awarding lucrative contracts to Huntington Woods businessman Jason Gordon.

UAW President Rory Gamble, left, and Jason Gordon

Gordon is president of several companies, including Custom Promotions, Idea Consultants, and Organization Services of Michigan. His companies have been paid approximately $3 million by the UAW, its political action committee and CAP councils since 2013

Federal filings show the last payment to a Gordon company from the UAW or its political action committee was $7,351 on Jan. 10, the day after the front-page story revealing the existence of the investigation involving Gamble.

Gamble has denied wrongdoing and has not been charged.  U.S. Attorney Matthew Schneider has repeatedly declined to talk about the investigation. 

UAW honors Gamble with commemorative pens from China

The lucrative trinkets-and-trash industry led to Ashton's downfall, sending him from the GM boardroom to a federal prison cell. He resigned from the GM board in December 2017, one month after The News reported investigators probing corruption within the U.S. auto industry were interested in him and Estrada, who has not been charged with wrongdoing.

Ashton deserved 34 months in prison because he betrayed union workers, violated the public's trust and conspired with his chiropractor to rig a $4 million contract for UAW-branded watches that were never distributed to workers, prosecutors said. Ashton received at least $250,000 in kickbacks from the chiropractor and left the 58,000 watches to rot on pallets as the batteries died in a UAW warehouse.

Former UAW Vice President Joe Ashton steered a $4 million contract for commemmorative union-branded watches to his personal chiropractor. Ashton received $250,000 in kickbacks.

Ashton pushed for home confinement so he could care for his wife, Denise Ashton, who suffers from multiple sclerosis. She spoke Tuesday and asked the judge for leniency: "Please your honor, show mercy on my husband. I truly cannot imagine my life without him.”

Son Daniel Ashton begged the judge to consider the impact a prison sentence would have on his mother, saying Joe Ashton is genuinely remorseful.

“He is in a constant state of anguish and regret,” Daniel Ashton said. “He fought for the union his entire life and now he let them down.”

In a statement from spokesman Brian Rothenberg, the UAW called the sentence “appropriate” and noted ongoing efforts to review and improve the union’s financial controls and accounting oversight designed to restore trust among members.

“Mr. Ashton’s crimes defy everything we stand for as a union and demonstrate his lack of respect for the oath of office he took and the rank-and-file members he represented,” the statement read.

The sentence comes against the backdrop of private negotiations between UAW officials and federal prosecutors that are expected to end in prolonged federal oversight of the union. Otherwise, the government has the option of seizing control of one of the nation's most powerful unions in order to implement real reforms, Schneider has said.

Ashton pleaded guilty in December to one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. The crimes carry a maximum penalty of up to 20 years and 10 years, and $250,000 fines.

“I am surprised by the little amount of time he got,” said Daniel Rider, 47, of Westland, Local 163 shop committeeman at General Motors Co.’s Romulus Powertrain Plant. “Anyone who screws over the membership that way deserves to go to jail. I just feel like he got what he deserved, though I’m sad for his family.”

Rider says he feels there have been greater efforts to increase transparency between the international union and its members, but he says there is still a lot of work to do. He would like to see a direct election of the UAW president for more accountability.

“If you ask me, it makes the membership more involved,” Rider said. “That’s how they were able to get away. So many people weren’t paying attention. I think that’s changed. The spotlight has been turned onto the union. I understand we make up the union, not the people at the top.”

One part of the alleged conspiracy stems from a failed business deal in 2010. At the time, Ashton was a regular client at Oxford Rehabilitation Center, a clinic in Philadelphia co-operated by chiropractor Marc Cohen.

Cohen is not identified by name in federal court records. But sources familiar with the investigation confirmed Cohen is the unnamed chiropractor.

In 2010, prosecutors say Ashton convinced Cohen to loan $250,000 to a construction company owned by one of Ashton’s associates, according to federal court records. By 2012, the construction company had stopped repaying the loan. By September 2012, the debt had ballooned to $283,000 and led to a lawsuit, according to court records.

Ashton pitched a plan to repay the construction loan — and help himself. In 2012, the UAW was planning to buy more than 50,000 watches. Ashton contacted Cohen, telling him to create a company that could win the contract and supply the watches, according to the government.

Ashton drafted the deal, helped award it to his chiropractor and demanded a $250,000 kickback in spring 2013, according to court records. Cohen's watch contract described by prosecutors included steep profits. The watches cost less than $2.3 million to produce, but the contract was for $3.97 million.

Cohen, 60, from Cherry Hill, New Jersey, has not been charged with wrongdoing.

"My client is not facing any criminal charges," his lawyer Paul Hetznecker wrote in an email to The News. He would not elaborate or answer whether Cohen cooperated with investigators or forfeited any money from the $4 million watch deal.

Ashton's corruption had devastating impact. The watches were awarded by the jointly operated training facility, the UAW-GM Center for Human Resources.

"Ashton's criminal conduct directly resulted in the closing of the CHR building, the termination of those individuals who were employed or assigned to the CHR, and the lost training opportunities for UAW-represented GM workers," the prosecutor wrote. 

The sentence renewed a demand among workers for more transparency from UAW officers, including reform that would end the use of internal caucuses to select labor leaders in favor of them being directly elected by rank-and-file members.

“These reforms are the only thing that can prevent more corruption,” Scott Houldieson, chairman of the reform group Unite All Workers for Democracy. “Until real checks and balances are put in place, there cannot be accountability. It is the membership that suffers from all of this corruption.”

rsnell@detroitnews.com

Twitter: @robertsnellnews

Staff writer Breana Noble contributed