Former UAW Official Pleads Guilty in Federal Probe of Union Corruption--Update
05 September 2019 - 3:30AM
Dow Jones News
By Nora Naughton
A former top aide at the United Auto Workers union pleaded
guilty Wednesday to conspiracy charges, the latest development in a
federal investigation into corruption within the leadership ranks
that recently expanded to current and former UAW presidents.
Michael Grimes, a retired official who was assigned to the UAW's
General Motors Co. division and once served as an administrative
assistant to a union vice president, stood accused of wire fraud
and money laundering. He entered into a plea deal with federal
prosecutors for a lesser sentence. The charges carry a maximum of
20 years in prison.
Mr. Grimes is the first senior official from the UAW's GM
department to be charged in the ongoing criminal probe, which first
became public in 2017 and has largely focused on financial
misconduct involving executives at Fiat Chrysler Automobiles NV and
their union counterparts.
Federal prosecutors say Mr. Grimes received about $2 million in
kickbacks and bribes from vendors hired to provide clothing and
other promotional accessories to the UAW's training center for GM
workers. In one instance, they say he used his power as a union
official to coerce a watch vendor to pay $60,000 on his mortgage,
according to court documents filed last month.
The charges allege Mr. Grimes and other unnamed union officials
spearheaded the scheme -- which started in 2006 and lasted until
July 2018 -- to enrich themselves. Before retiring from the union
last year, Mr. Grimes had worked alongside UAW Vice President Cindy
Estrada and was on the UAW-GM training center's board.
Mr. Grimes told the court he was experiencing financial hardship
when he accepted the kickbacks. His attorney, Michael Manley, told
reporters after the plea hearing that Mr. Grimes was devastated by
his actions.
The Justice Department's investigation has already resulted in
eight convictions, including a prison term for Fiat Chrysler's
former head of labor relations. Last week, federal agents searched
the homes of UAW President Gary Jones, the union's highest-ranking
official, and his predecessor, Dennis Williams, marking a
significant elevation in a probe that has mostly centered on
allegations of union officials using funds set aside for worker
training programs for personal benefit. Neither man has been
charged with a crime.
The UAW has said its leadership is cooperating with federal
investigators and the search warrants weren't necessary.
"The conduct admitted by Mr. Grimes in his plea today is
shocking and absolutely disgraceful," the UAW said Wednesday. The
union said it has recently enacted reforms that provide more
oversight and restrictions to the vendor-bidding process to ensure
such behavior doesn't occur again.
As the investigation accelerates, the UAW is working to
negotiate new four-year labor contracts with the Detroit auto
makers. The union on Tuesday said it would target GM to bargain
with first, aiming to reach a deal with the car company that it can
use as a template for similar agreements with Fiat Chrysler and
Ford Motor Co.
The current contracts, representing nearly 150,000 U.S. factory
workers at GM, Ford and Fiat Chrysler, expire on Sept. 14.
(END) Dow Jones Newswires
September 04, 2019 13:15 ET (17:15 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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