Feds clear General Motors in UAW union corruption probe

FBI agents finish loading materials into a truck out of the home of United Auto Workers President Gary Jones on Wednesday, Aug. 28, 2019.

Michael Wayland / CNBC

Federal prosecutors this week informed General Motors that it is not currently a target in a yearslong investigation into corruption of the United Auto Workers union.

The automaker on Friday said it received a letter from the U.S. attorney’s office in Detroit conducting the probe confirming its status. A spokeswoman with the government told CNBC that “a letter was sent to GM’s counsel stating that the company is not presently a target.”

“Recent media reports suggested that General Motors may be a focus of a ‘newer front in the years-long criminal investigation’ being conducted by the U.S. Attorney’s Office in Detroit,” the automaker said in an emailed statement. “This is simply not true. GM is not a target of the government’s ongoing investigation. The U.S. Attorney’s Office in Detroit officially confirmed this to GM.”

The statement follows The Wall Street Journal reporting earlier in the week that federal officials were looking into GM as part of the investigation, which was made public nearly three years ago. The article used anonymous sources and claimed the probe into GM was “a newer front.”

The Journal, in an email to CNBC, said, “We stand by our reporting”. 

The federal investigation started with a probe into UAW officials taking bribes and favors from executives at Fiat Chrysler. Months after the investigation was made public in July 2017, it was reported that prosecutors also were looking into whether similar actions occurred at GM and Ford Motor.

The three automakers have about 150,000 UAW-represented employees and negotiate contracts with the union typically every four years.

The spokeswoman with the U.S. attorney’s office in Detroit declined to comment on whether Ford is a target. A spokesperson for Ford was not immediately available for comment.

The investigation has led to charges against 13 people, including three Fiat Chrysler executives and 10 people affiliated with the union, including former UAW President Gary Jones. The ex-union leader is the only one who has yet to plead guilty in the case, but court documents suggest he plans to do so.

Former UAW Vice President Joe Ashton, who was on GM’s board, also has been convicted. Ashton, who oversaw the union’s GM department before retiring in 2014, pleaded guilty in December to being involved in a bribery and kickback scandal with union vendors. He is awaiting sentencing.

GM last year filed a federal racketeering lawsuit against Fiat Chrysler, alleging it was harmed as a result of “corrupted” collective bargaining involving Fiat Chrysler leaders bribing union officials into taking company-friendly positions that resulted in unfair labor costs and operational advantages.

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