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The federal corruption sample in the union expands to General Motors



Proponents wave signs during a speech at the Time Warner Cable Arena in Charlotte, North Carolina, on September 5, 2012, the second day of the Democratic National Convention (DNC).

Mladin Antonov | AFP | Getty Images

DETROIT – A federal investigation into the misuse of millions of dollars in training centers by Fiat Chrysler executives and United Auto Workers executives has expanded to General Motors.

Michael Grimes, a retired senior official at the union's GM division, has been accused of fraud and money laundering for receiving $ 2 million in kickbacks from UAW suppliers. He has been charged with criminal information which shows he is expected to plead guilty.

Grimes' statement at a hearing on September 4 in Ann Arbor will be a highlight of the Justice Department's investigation into one of the largest US unions. He is the first non-Fiat Chrysler person to be indicted as part of a multi-year probe.

However, the allegations against Grimes differ from the previous ones, which led to the conviction of eight company employees and trade unions with Fiat Chrysler. [1

9659002] Prosecutors did not identify any GM executives as involved in corruption as they did with the FCA.

Furthermore, there were no allegations that the actions were intended to affect the UAW's collective bargaining with GM, as it did with the Italian.

In a statement, GM called Grims and other Union officials' alleged behavior "deeply disturbing" and stated that he was "fully cooperating" with the investigation.

"These serious allegations constitute stunning abuse of power and confidence," GM said in a statement. "There is no excuse for union employees charged with the fiduciary responsibility of their members and the Human Resource Center (training center) to enrich themselves at the expense of union membership they represent – and to steal funds for CHR invested by GM to train our hourly employees. "

" Trust undermined "

The allegations come at an inopportune time for the union and the producers of the big three Detroit, who are negotiating new contracts for 158,000 UAW workers. Extending the investigation may make it difficult for employees to ratify contracts.

"This does not seem to have affected the bargaining process in the past, but it casts a shadow over this year's negotiations because it undermines confidence in leadership," said Kristin Dzicek, vice president of industry, labor and economics at the Automotive Research Center at Ann Arber.

When the federal investigation was made public in July 2017, it focused on a collaborative training center between the UAW and Fiat Chrysler. But it quickly expanded to probes in similar operations with GM and Ford Motor, which previously confirmed that was cooperating with the investigation. Detroit training centers are jointly controlled by companies and the union, but are funded by car manufacturers as part of their collective agreements.

The probe resulted in five UAW-related sentences and three Fiat Chrysler executives, including former Labor Relations Chief Alfonso Jacobelli, who was sentenced last year to 5½ years in prison – the longest sentence in the case.

Additional charges coming?

Grimes, who faces up to 20 years in prison, was one of three union employees identified by federal prosecutors as receiving bribes and refusals from sellers who were contracted to produce goods internally known as "trinkets and junk." , for the union.

Federal employees, in court documents unsealed Aug. 14, accuse three union employees of soliciting or extorting hundreds of thousands of dollars from vendors and using training center funds to seize them.

Grimes lawyer Michael P. Manley did not respond for comment. DOJ declined to comment on ongoing investigation

Former UAW Vice President Joe Ashton spoke during GM's announcement at a plant in Spring Hill, Tenn. In 2011

GM

Until court documents listed the other two union officials, The Detroit News, citing sources, named them as retired UAW Vice President Joe Ashton and one of his most important lieutenants, Jeff Peterzhik.

Ashton – the first UAW leader on the GM board – resigned from the board in December 2017 after being reported to be involved in the investigation.

GM declined to comment on the circumstances surrounding its resignation. Ashton did not return a phone message seeking comment. Pietrzyk could not be reached for comment.

"Shocking and Absolutely Shameful"

The allegations against Grimes, who withdrew from the union in 2018, have given credence to reports that Cindy Estrada, the union's vice president who succeeded Ashton, is of interest to federal prosecutors. Grimes serves as Estrada's chief assistant.

Estrada, who started as vice president in 2010, has not been charged with any crimes and is not listed in court files related to the corruption trial.

UAW Vice President Cindy Estrada spoke at an event at the General Motors Assembly Plant in Flint, Michigan in August 2015.

GM

A UAW spokesman declined to comment directly on the investigation, citing previous statement that Grimes "has benefited by itself. UAW membership and should be pursued entirely within the law."

A separate statement on behalf of the Union Council, which includes Estrada, called Grimes's alleged actions "shocking and absolutely shameful". He also outlined steps taken last year in an effort to end such corruption, including the adoption of a "rigorous three-application process" for union providers and joint training centers.


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