Former UAW aide Michael Grimes pleaded guilty to accepting $1.5 million in kickbacks from vendors.
A former United Auto Workers official pleaded guilty Wednesday to charge of abusing his position to solicit kickbacks from vendors and supplier working for the joint General Motors-UAW Human Resources Center in Detroit.
Michael Grimes, who played a key role in the UAW’s General Motors Department, admitted he used his position with the union and on the executive board for GM-UAW Center for Human Resources to obtain $1.5 million in kickbacks from vendors and depositing it in U.S. banks where it was shared with two other yet-to-be-identified union officials.
Grimes, who under federal sentencing guidelines faces between 46 and 57 months in prison, said he began taking the kickbacks after his wife lost her job and his family faced financial hardship. The scheme continued right up until Grimes retirement in June 2018, according to federal prosecutors.
(Union Training Fund Investigation Examining GM-UAW Fund)
Grimes will be sentenced in mid-January, according to U.S. District Judge Bernard Friedman.
Michael Manley, Grimes’ lawyer, told reporters after the hearing his client was ashamed of what he’d done and of the fact that he had betrayed his friends and the UAW. “Mr. Grimes has taken accountability for what he did, which is first step toward redemption,” Manley said.
Grimes is the ninth individual to enter a guilty plea in the growing federal probe of the UAW and the training funds the union operates in cooperation with Detroit’s three automakers. Since the mid-1980s, the income for the training funds comes from a 5-cent per hour charge collected for overtime hours worked by union members.
Former UAW Vice President Norwood Jewell pleaded guilty in federal court to charges stemming from the ongoing investigation into bribery of UAW officials.
Manley declined to comment on whether Grimes would cooperate by identifying other union or GM officials connected to the kickbacks. So far, eight individuals snared by the investigation union members or company officials were connected to the UAW-FCA fund.
Last week, the FBI raided the private home of Gary Jones, the UAW’s current president, who is now in the midst of bargaining new labor contracts with Detroit’s three automakers. The union said the raid was unnecessary since the UAW has cooperated with federal investigators during the past two years.
“The conduct admitted by Mr. Grimes in his plea today is shocking and absolutely disgraceful,” UAW spokesman Brian Rothenberg said in a statement e-mailed to AFP.
(Former UAW VP Jewell Sentenced to 15 Months in Prison)
The union’s statement noted the UAW has adopted a series of internal reforms so conduct outlined by Grimes cannot be repeated. One of the changes requires that all contracts for the union or for the joint training centers now require three bids.
Union members have indicated they have little faith in the current UAW leadership and active union members employed under the contracts at GM, Ford or FCA fear they might be sold out again.
The scandal also brought calls for reform from within the union. “I am sad and angry at what the scandal has done to our union,” said Frank Hammer, a retired UAW staff member and activist who was at the hearing in Ann Arbor, Michigan.
Former FCA executive Michael Brown was the third FCA executive to plead guilty in the FCA-UAW scandal. (Photo credit: UAW-Chrysler)
“I’m here to cheer on the prosecutors,” said Bob Dechetler, a retired UAW member from Toledo, Ohio. “We want the union cleaned up. We want the bad guys gone.”
Paul Wolfarth, another retired UAW member who turned out for the hearing, said the scandal has undermined union organizing drives at Volkswagen and Nissan. “All they do is say, ‘Look at the corruption,’” he noted.
GM also weighed in issuing a statement saying Grimes’ conduct while operating inside the cooperative structure created by the labor contracts with the UAW was shocking.
“GM is deeply disturbed by the conduct of Michael Grimes and other union officials as uncovered by the government’s investigation and admitted to by Mr. Grimes in today’s hearing,” the automaker said in a statement.
(GM Walking Tough Road in Negotiations With UAW)
“These actions represent a stunning abuse of power and trust. There is no excuse for union officials to enrich themselves at the expense of the union membership they represented — and to steal CHR funds invested by GM for training our hourly employees.”