Ex-GM board member, union leader pleads guilty to accepting kickbacks – CNBC

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Former UAW Vice President Joe Ashton speaks during a GM announcement at a plant in Spring Hill, Tenn. in 2011.

GM

DETROIT – Former General Motors board member Joe Ashton, a retired United Auto Workers leader, pleaded guilty on Wednesday, as part of a deal with federal prosecutors, to criminal charges as part of an ongoing federal corruption probe into the union.

As part of the deal, he agreed to forfeit $250,000.

With the guilty plea, Ashton admitted to demanding and accepting hundreds of thousands of dollars in kickbacks from union vendors and improperly using his position to illegally benefit himself and others.

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.

Ashton 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 eleventh to be convicted thus far, including two union officials who admitted to assisting him in the schemes.

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

Gary Jones, the newly-elected President of the United Auto Workers (UAW), addresses the 37th UAW Constitutional Convention June14, 2018 at Cobo Center in Detroit, Michigan.

Bill Pugliano | Getty Images

A scheme identified by federal prosecutors involved a nearly $4 million 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.

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.

The auditing changes are in addition to reform actions announced by acting UAW President Rory Gamble in November. Gamble has been acting president of the union since UAW President Gary Jones took a leave of absence on Nov. 3, days after being implicated in the multiyear investigation. Jones resigned from his position and the union last month. He has not been charged by federal prosecutors.

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