Former General Motors (NYSE: GM) Board Member and United Automobile Workers Vice President Joe Ashton has pleaded guilty to federal corruption charges as part of a corruption probe into the Union by federal prosecutors.
Ashton's guilty plea is part of a plea bargain with prosecutors, reducing his sentence from potentially 10-20 years down to roughly 30-37 months. Ashton is currently charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. Ashton is set to be sentenced on March 3 in 2020.
Ashton is not the first former UAW official to plead guilty in the federal government's investigation and is only one of 10 UAW officials and three Fiat-Chrysler (NYSE: FCAU) executives facing corruption charges as part of the government probe. In September, Mike Grimes, the administrative assistant to UAW Vice President Cindy Estrada, pleaded guilty to accepting $2 million in bribes. In October, Ashton's assistant Jeffery Pietrzyk pleaded guilty to accepting bribes.
Ashton has refused to comment on his guilty plea when approached by members of the press, however, his attorney made a statement on his behalf; "He has asked me to apologize to all the members of the UAW, workers at General Motors, Joe Ashton has spent literally 50 years working for the workers of the UAW and General Motors"
The UAW addressed Ashton's conduct, stating "The crimes that Joe Ashton has plead 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." GM also issued a statement, stating that Ashton's behavior was "outrageous" the automaker was "was not aware of his illegal activity until it was recently revealed by the government's investigation."
The ongoing years-long investigation into the UAW has uncovered a conspiracy of bribery and kickbacks perpetuated by top union officials, as well as several instances of embezzlement. Former UAW President Gary Jones, who in October had just helped negotiate the end of a GM autoworkers strike, resigned his membership after being named as an orchestrator in a plot to embezzle union dues for personal use.
Jones' resignation in the face of the scandal has left Rory Gamble as acting president of the autoworker's union. Days before Ashton entered his plea, and only days after Jones' resignation, Gamble announced sweeping changes to the Union to begin restoring its reputation. The union would be handing financial control over to an external firm to lessen the likelihood of future financial issues, as well as retaining auditors to help place further checks and balances on the union's finances.
Regardless of the Union's actions, U.S. Attorney Matthew Schneider has said that he is "unimpressed" with the Union's actions thus far and voiced his concerns over the Union's lack of cooperation over the course of the investigation. Schneider has announced that federal oversight of the Union has not been ruled out of the question.