Feds clear General Motors in UAW corruption probe
Detroit — In a rare move, federal prosecutors assured General Motors Co. that the government is not targeting the automaker in conjunction with the years-long corruption investigation of the United Auto Workers.
The determination, confirmed Friday by the automaker and a spokesperson for the U.S. Attorney's office, comes three years after The Detroit News reported that federal investigators were probing bribery and kickback allegations involving UAW officials who helped oversee a training center jointly operated with GM.
Since then, three UAW officials who oversaw the Center for Human Resources training center — including former UAW Vice President Joe Ashton, who served on GM's board of directors — have pleaded guilty to crimes and are awaiting prison sentences.
GM received official notification Thursday from the U.S. Attorney's Office explaining that the company was not a criminal target. Such notifications are rarely issued, but they are coveted by people and companies linked to criminal investigations.
"Recent media reports suggested that General Motors may be a focus of a ‘newer front in the years-long criminal investigation’ being conducted by the U.S. Attorney’s Office in Detroit," the automaker said. "This is simply not true. GM is not a target of the government’s ongoing investigation. The U.S. Attorney’s Office in Detroit officially confirmed this to GM.”
The thrust of the notification, usually in the form of a letter, underscores what the government has referred to in previous court filings associated with a corruption investigation that has led to charges against former UAW President Gary Jones, 13 convictions of union leaders and Fiat Chrysler Automobiles executives.
The letter also draws a sharp contrast between GM and Fiat Chrysler. Unlike GM, prosecutors have labeled Fiat Chrysler and the UAW as co-conspirators in a scheme to pay bribes and break federal labor laws.
In the Ashton investigation, prosecutors have said the former UAW vice president and two aides devised a bribery and kickback scheme to defraud union members and the training center, which is financed by GM. They were accused of receiving money in exchange for awarding contracts to produce more than $15.8 million worth of union-branded trinkets, including backpacks and jackets.
Ashton was accused of demanding $550,000 in kickbacks and bribes from vendors, including his personal chiropractor, who received a nearly $4 million deal to produce commemorative watches for UAW members.
Fiat Chrysler, meanwhile, last year was negotiating a settlement with the government that that would resolve a federal criminal investigation. Settlement talks were focused on submitting to government oversight for up to five years, paying less than $50 million in penalties and agreeing to make broad institutional changes.
Federal prosecutors have labeled the UAW and Fiat Chrysler as co-conspirators in the corruption scandal, an allegation at odds with claims the labor union and automaker were victimized by rogue employees.
The allegation, contained in a federal court plea agreement obtained by The News two years ago, exposes the automaker and the UAW to criminal charges, fines and governmental oversight, according to a former federal prosecutor.
The ongoing corruption investigation into labor leaders embezzling member dues and committing other crimes could lead to the government seizing control of one of the nation's most powerful unions — a move that sitting UAW President Rory Gamble has said he's working hard to avert.
U.S. Attorney Matthew Schneider talks about the ongoing corruption case involving leaders of the UAW The Detroit News
U.S. Attorney Matthew Schneider has said seizing control of the UAW through a civil racketeering case remains an option to root out corruption within the union's senior leadership ranks.
Few public figures and officials linked to federal criminal investigations have received the type of letter GM received this week. In December 2017, The News obtained a sealed FBI wiretap records that revealed numerous elected officials were "target subjects" of a corruption investigation. The list included Detroit City Councilman Gabe Leland.
Days after The News' report, prosecutors cleared most of the public officials, except Leland and former Macomb County Public Works Commissioner Anthony Marrocco. Leland has since been charged with bribery and is awaiting trial.
And in early 2015, federal prosecutors cleared former Wayne County Executive Robert Ficano following a years-long corruption investigation that contributed to his re-election loss.