Feds inch closer to ex-UAW VP Ashton in corruption probe

Ann Arbor — Federal prosecutors closed in on former United Auto Workers Vice President Joe Ashton by securing the conviction Tuesday of a second union leader involved in a bribery and kickback conspiracy.

Ashton's former top aide, Jeff Pietrzyk, pleaded guilty to his role in a conspiracy involving Ashton and former UAW official Mike Grimes and admitted receiving kickbacks and bribes from UAW vendors. The vendors, including Ashton's personal chiropractor, received rigged contracts to produce more than $15.8 million worth of UAW-branded watches, jackets and backpacks, according to prosecutors.

Pietrzyk, 74, of Grand Island, New York, pleaded guilty to wire fraud and money laundering conspiracies seven weeks after Grimes struck a plea deal with federal prosecutors. Both men are believed to be cooperating with an ongoing investigation targeting Ashton and corruption within the UAW and domestic auto industry.

Prosecutors agreed not to seek more than a 27-month prison sentence for Pietryzk.

"When two of your co-conspirators plead guilty and agree to cooperate, it makes it very difficult for you to avoid charges," said Peter Henning, a Wayne State University law professor and former federal prosecutor. "That’s where the danger is for Ashton — he’s likely the next one on the list."

A grim, gray-skinned Pietrzyk ignored questions from reporters outside court and listened as defense lawyer Robert Singer explained his client's regrets.

"It was a strong case and also he pleaded guilty because it was the right thing to do," Singer told reporters. "Jeff wants to apologize to his family and apologize to union members that he doesn't feel he served faithfully."

Pietrzyk, who will forfeit $123,000, will be sentenced by U.S. District Judge Bernard Friedman on March 3.

The guilty plea came as striking UAW members across the country voted on a contract that would end a strike against General Motors Co. that's in its sixth week.

“The criminal conduct Jeff Pietrzyk has admitted is appalling and goes against everything we stand for as a union," the UAW said in a statement. "The UAW leadership is committed to acting in the best interest of its members and will continue to focus on achieving the best contracts possible for our members in the coming weeks."

Along with UAW President Gary Jones, Ashton is one of the highest-ranking former UAW officials linked to an investigation into whether money and illegal benefits corrupted union leaders and the collective bargaining process. Ashton, 71, of Ocean View, New Jersey, served as a vice president and was appointed to the board of GM but resigned in December 2017 after The Detroit News linked him to the investigation.

Pietrzyk is the 10th person to plead guilty in the corruption investigation. An 11th person, UAW Regional Director Vance Pearson, is charged with embezzling union funds, mail and wire fraud, and money laundering.

Pietrzyk is a key figure in a conspiracy stretching from Detroit to the Jersey shore, a conspiracy involving secret payoffs, shakedowns and high-ranking UAW officers.

Ashton is the unnamed union official accused in federal court records of demanding $550,000 in kickbacks and bribes from vendors and helping orchestrate the alleged conspiracy.

Prosecutors say the conspiracy defrauded UAW members and the UAW-GM Center for Human Resources, a jointly operated training center for blue-collar workers.

Federal court records portray Ashton as a powerful union executive who steered a $4 million deal to his personal chiropractor and then collected cash kickbacks hand-delivered to his home near the New Jersey shore.

Pietrzyk served as Ashton's top administrative assistant until retiring in 2014 and was paid $110,055 a year, according to UAW regulatory filings. He and Ashton also served on the board of the training center.

The criminal case against Grimes involves vendors being awarded contracts from the training center to produce UAW-branded merchandise in exchange for paying bribes and kickbacks.

For example, in 2011, Ashton proposed buying 50,000 UAW-GM jackets using training center funds, according to sources familiar with the investigation and court records.

Grimes recommended a family-owned company identified in court records as "Vendor A," which was awarded a $6 million contract, prosecutors said.

Then, prosecutors say "Union Official 2" told Grimes to demand a $300,000 kickback for "Union Official 1," who sources said is Ashton.

Pietrzyk served as the middleman, delivering the kickbacks to Ashton and was given $30,000, according to the government.

"(Jeff) was approached by someone in power over him and asked to do something and he did it," Singer told reporters. "That wasn't the best choice and it's something that he regrets."

Ashton's name was never mentioned during the court hearing Tuesday. Instead, Assistant U.S. Attorney Frances Carlson referred to an unnamed union official, who sources told The News is Ashton.

Ashton, 71, of Ocean View, New Jersey, continued receiving kickbacks for two years after he was promoted to GM's board of directors in 2014, according to the court records.

Pietrzyk also played a central role in a nearly $4 million watch contract awarded to Ashton's chiropractor, prosecutors said.

In 2013, the UAW-GM training center awarded a $3.97 million contract to New Jersey chiropractor Marc Cohen, according to sources and the criminal case.

Ashton, who helped negotiate the contract, demanded a $250,000 kickback, prosecutors allege.

Cohen hand-delivered the kickbacks to the UAW vice president's house, prosecutors said. Ashton also told his chiropractor to pay kickbacks to Pietrzyk, according to the criminal case against Grimes and sources familiar with the investigation.

Pietrzyk received $95,000 from the chiropractor and gave $25,000 to Grimes, according to the government.

"Did you fail to disclose that you accepted bribes and kickbacks from the vendors?" Carlson asked Pietrzyk.

"Yes," he said.

In all, Pietrzyk received approximately $123,000 during the alleged conspiracy, prosecutors said.

rsnell@detroitnews.com

Twitter: @robertsnellnews