Autos

Aide of retired UAW leader pleads guilty to criminal charges as GM workers vote on tentative deal to end strike

Key Points
  • Jeffery Pietrzyk, a top aide of retired UAW Vice President Joe Ashton, pleads guilty to charges of conspiracy to commit wire fraud and money laundering.
  • Pietrzyk is the 11th person to be charged in a widening federal probe into union corruption.
  • The investigation has added to a contentious year of contract negotiations between the union and Big Three Detroit automakers.
Retired United Auto Workers official Jeff Pietrzyk, a former aide to retired UAW VIce President Joe Ashton, exits the U.S. courthouse in Ann Arbor, Mich., after pleading guilty to federal corruption charges on Tuesday, Oct. 22, 2019.
Michael Wayland / CNBC

ANN ARBOR, Mich. – As United Auto Workers members with General Motors vote this week on a proposed deal that could end the union's 37-day strike, one of their former brethren pleaded guilty to his part in an ongoing federal probe into corruption at the union.

Jeff Pietrzyk, a top aide of retired UAW Vice President Joe Ashton, a former GM board member, pleaded guilty to charges of conspiracy to commit wire fraud and money laundering. He is the 10th person to plead guilty in the widening federal probe that also has led to the arrest of a member of the union's top governing board.

The corruption probe has added to a contentious year of contract negotiations between the union and Big Three Detroit automakers. Previous convictions included six people affiliated with the UAW and three Fiat Chrysler executives.

Pietrzyk, outside the courthouse in Ann Arbor, Michigan, told media "of course" he apologizes to UAW members for his crimes: "I'm sorry for what I did," he said.

Prosecutors recommended Pietrzyk, who retired from the union in 2014, serve 24 to 30 months in prison for his crimes. Sentencing is scheduled for March 3. He's required to pay $123,000 in restitution as part of his plea deal.

Pietrzyk, 74, of Grand Island, New York, did not give any explanation for his crimes. Robert C. Singer, Pietrzyk's attorney, repeated that his client's involvement in the scheme was much more limited than other people's involvement.

"He was approached by someone who was in power over him and asked to do something and he did it," Singer told reporters after the hearing. "And that wasn't the best choice. It's something that he regrets."

Singer declined to comment on whether his client is cooperating with federal investigators.

Prosecutors accused Pietrzyk, whose base salary was upward of $125,000, of conspiring with other union leaders to receive hundreds of millions of dollars in bribes and kickbacks from vendors that made hats, shirts and other merchandise for the union, internally known as "trinkets and trash."

Pietrzyk's guilty plea comes nearly two months after one of his co-conspirators, Michael Grimes, a retired senior official with the union's GM division, pleaded guilty to charges of wire fraud and money laundering.

Retired United Auto Workers official Michael Grimes, right, exits the U.S. courthouse in Ann Arbor, Michigan, after pleading guilty to federal corruption charges on Wednesday, Sept. 4, 2019. His attorney Michael P. Manley is being interviewed in blue suit.
Michael Wayland | CNBC

Grimes and Pietrzyk were two of three union officials identified in court documents unsealed Aug. 14 as receiving bribes and kickbacks from vendors. The Detroit News, citing anonymous sources, previously identified the third person as Ashton. He has not been charged.

Ashton — the first UAW leader on GM's board — resigned from the board in December 2017 after reportedly being linked to the investigation.

Prosecutors have not identified any GM executives as being involved in the corruption, as they did with Fiat Chrysler.

The UAW's 48,000 members with GM are voting on a tentative deal reached last week between the company and union through Friday.