Former Auto Union Official Admits to Taking Kickbacks

DETROIT (CN) – The highest ranking United Auto Workers official yet to face punishment for his role in a sprawling corruption scandal pleaded guilty Wednesday, as the case continues to rock the foundation of one of the most powerful unions in the nation.

Joe Ashton, the former vice president of the United Auto Workers – GM Department,  pleaded guilty Wednesday to corruption charges, admitting he received a $250,000 kickback after arranging a contract for 58,000 watches. Ashton led the union’s General Motors department until July 2014 and also had a seat on the automaker’s board. He is pictured above at a 2011 news conference in Toledo, Ohio. Ashton(AP Photo/Rick Osentoski File)

Retired UAW Vice President Joe Ashton faced Senior U.S. District Judge Bernard Friedman in Detroit and entered guilty pleas 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, respectively. Both have maximum fines up to $250,000. The government is seeking a prison term of 30 to 37 months.

Ashton, 71, of Ocean View, New Jersey, was appointed as a union representative on the board of directors for General Motors when he retired from the union in 2014, but resigned in 2017 when an explosive Detroit News report detailed how he demanded more than $500,000 in kickbacks for lucrative contracts in which vendors would produce more than $15 million worth of union-branded trinkets and related merchandise for union workers.

Interim UAW President Rory Gamble condemned Ashton’s actions in a statement last month after the charges were filed.

“Joe Ashton’s actions, as set forth in the government’s filings, are completely inexcusable and violate UAW’s long-standing standards of conduct put in place by former leaders like Walter Reuther,” Gamble said. “The UAW remains focused on negotiating and finalizing strong contracts for our members, especially during this round of auto negotiations.”

General Motors, meanwhile, denied knowing about the misconduct.

“GM was not aware of this illegal activity until it was recently revealed by the government’s investigation, or that he allegedly continued to benefit from this conduct after the UAW Retiree Medical Benefits Trust appointed him to the GM Board,” the company said in a statement.

U.S. Attorney Matthew Schneider recently told The Detroit News that federal oversight of UAW is a possibility since tension still remains between the union and federal government. Schneider suggested the union move quicker to implement major changes and cooperate with authorities.

“Now isn’t the time to say ‘we’ll have some moderate reforms.’ No, we need significant reforms,” he said.

Schneider said in a statement that Wednesday’s plea marked another step towards cleaning out the corrupted union.

“The hard working members of the UAW deserve to be represented by union officials dedicated to providing honest representation free of corruption and greed, and today’s guilty plea is a step in the right direction,” he said.

Former UAW President Gary Jones resigned his position and his union membership last week under pressure from the union’s governing board that looked to expel him and former official Vance Pearson for their role in the corruption scheme. Jones has not been charged but was linked to embezzling more than $1 million of union dues he reportedly spent on himself in Palm Springs, California.

Responding to pressure from the government, UAW Secretary-Treasurer Ray Curry on Monday announced a new auditing process that includes four new auditors and the retention of the accounting firm Deloitte to conduct a complete assessment of all accounting and financial processes and procedures, including all political action committees and regional offices.

“The UAW is committed to putting in place checks and balances and accounting reforms that prevent financial malfeasance,” Curry said in a statement. “This top-to-bottom assessment of our financial and accounting procedures and policies will result in a stronger and more stringent financial oversight of all expenditures and financial transactions.”

Federal agents conducted raids in late August in Michigan, California, Wisconsin and Missouri that turned up massive amounts of cash and certain financial records that helped bolster their case. The raids included Jones’ suburban Detroit home.

Judge Friedman, who is overseeing Ashton’s case, was appointed by Ronald Reagan in 1988.

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