Former United Auto Workers Vice President Joe Ashton, who once served on General Motors’ board of directors, faces up to 37 months in prison and a $250,000 fine after pleading guilty Wednesday to federal criminal charges.
Federal prosecutors charged Ashton with money laundering and wire fraud, and Ashton told Judge Bernard Friedman that he understood the gravity of the charges and the decision to plead guilty was his and his alone.
After the hearing in federal court, Ashton’s attorney, Jerome Ballarotto of Trenton, N.J., said his client wanted apologize to all the members of the UAW. “Sometimes you find that good people wind up doing really bad things,” he said.
Ashton, who served as head of the union’s GM department until 2014, was the union’s representative on the GM board of directors for three years until 2017 when he abruptly resigned as the federal investigation about corruption in the UAW picked up momentum.
“The criminal conduct Joe Ashton admitted to is outrageous. GM was not aware of his illegal activity until it was revealed by the government’s investigation, nor did we know that he continued to benefit from wrongdoing after the UAW Retiree Medical Benefits Trust appointed him to the GM Board – a position he resigned in December 2017,” GM said in a statement.
The UAW also said in a separate statement that the Ashton’s misconduct violated everything for which the union has stood for decades.
“The crimes that Joe Ashton has plead(ed) guilty to are against everything we stand for as a union, demonstrate his self-interest, and signify his lack of respect for the oath he took to protect the sacred dues money of our UAW brothers and sisters.
“Under the leadership of Acting President Rory Gamble, the UAW and our board are focused on reviewing and tightening policies and controls and implementing new measures to restore the full faith and trust of our more than 400,000 members across the country. If we find there has been wrongdoing, we will take all available actions to hold that person accountable.”
The UAW never named a replacement for Ashton on the GM board even though his original appointment was considered a major victory for the union. The union’s VEBA, which pays the health-care bill for retired auto workers once employed by GM, Ford and Chrysler, subsequently sold a major block of GM shares and has not sought to put a member on the automaker’s board of directors.
Federal prosecutors charge Ashton demanded kickbacks from vendors as part of an illicit scheme described in federal court documents.
In return for the payoffs, Ashton has been accused of helping steer at least $15.8 million worth of UAW merchandise contracts to vendors, including his personal chiropractor.
Two other former union officials who participated in the conspiracy, Jeff Pietrzyk and Mike Grimes, the former co-director the UAW-GM joint fund, have already pleaded guilty to charges of money laundering and are thought to have provided information to federal prosecutors in exchange for leniency at sentencing.
Ashton was specifically charged with fraud and money-laundering conspiracies. The fraud charge is punishable by up to 20 years in federal prison; money-laundering conspiracy is a 10-year felony.
The joint program operated by GM and the UAW since the mid-1980s also come under scrutiny during the union’s recent negotiations with the GM. As part of the settlement that ended a 40-day strike against GM, both sides agreed to sell the joint program lavish headquarters on the Detroit River and to restructure the programs.
So far, a total of 10 UAW officers and officials have been charged in the probe, which also forced UAW president Gary Jones to resign after federal investigators uncovered evidence of another scheme to embezzle money from the union treasury that was centered on UAW Region 5 in Hazelwood, Missouri.