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Former GM Board Member Charged in Widening Auto Union Scandal

Nov. 6, 2019
Joe Ashton resigned from the GM board in 2017. He faces charges of violating wire fraud and money laundering laws.

Federal prosecutors charged a former United Auto Workers official who served on the board of General Motors Co. for his alleged role in a bribery and kickback scheme involving union funds, the latest scandal dogging UAW officials.

Joe Ashton, who resigned from GM’s board in December 2017, faces charges of violating money laundering and wire fraud laws, days after the head of the UAW took a leave of absence amid questions about his alleged role in a corruption scandal.

The developments come as the union is negotiating new labor contracts with Ford Motor Co. and Fiat Chrysler Automobiles NV, and less than two weeks after the UAW reached a deal with GM on Oct. 25, ending a nearly six-week strike.

The acting head of the UAW, Rory Gamble, called the allegations against Ashton “completely inexcusable” and said in a statement that the union remains focused on completing its negotiations for a four-year contract with Ford and Fiat Chrysler.

The criminal allegations against Ashton mark an expansion of a conspiracy probe that has led to guilty pleas by several officials at the union and Fiat Chrysler, and more recently has implicated UAW President Gary Jones, who stepped aside indefinitely on Saturday.

Jones has not been charged with a crime, but is a co-conspirator in an embezzlement case and identified in court filings as “UAW Official A,” the Detroit News reported last week, citing unnamed people familiar with the investigation. He was similarly identified in a case involving his former aide, Bloomberg News reported in September, according to a person familiar with the federal probe who asked not to be identified.

The charges date from Ashton’s tenure as head of the UAW’s GM department, which he led from 2010 to 2014, prosecutors alleged in documents filed on Wednesday with the Eastern District of Michigan federal court. He allegedly conspired to award a $3.9 million union contract for 58,000 wrist watches to a vendor that then paid bribes and kickbacks to UAW officials, including Ashton.

Ashton’s attorney couldn’t be reached for immediate comment.

The union lost its sole representative on GM’s board when Ashton resigned as director. He had been nominated by the UAW Retiree Medical Benefits Trust, which was designated the seat as part of a post-bankruptcy restructuring. The trust forfeited board representation after reducing its shareholdings in GM in 2018.

GM said in a statement that it is “deeply disturbed” by the allegations against its former board member and that it was not aware of any illegal activity.

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