Ex-UAW Official Pleads Guilty to Receiving Bribes, Kickbacks

The strike by nearly 50,000 United Auto Workers against General Motors ended after nearly six weeks on October 25. But Jeffrey Pietrzyk’s troubles are far from over. On October 22, Pietrzyk, a retired top aide to ex-UAW Vice President Joe Ashton, pleaded guilty in Ann Arbor federal court to honest services fraud and money laundering charges in connection with his acceptance of about $123,000 in bribes and kickbacks from union vendors. He had been charged on September 20. His offenses were part of a dozen-year, $2 million scheme in the union’s GM Department led by now-convicted ex-UAW official Michael Grimes. The actions follow an investigation by the FBI, the IRS and the U.S. Labor Department’s Office of Labor-Management Standards and Office of Inspector General.

Union Corruption Update covered this scandal in August and September. The United Auto Workers’ General Motors Department, like its Chrysler Department, has been the focus of an extensive federal criminal probe. And like the UAW-Chrysler scandal, which has resulted in nine convictions, the UAW-GM scandal has begun to produce guilty pleas. This August, federal agents searched the homes of current union President Gary Jones and immediate past union President Dennis Williams, the UAW conference resort center at Black Lake, Mich., and other locations. The main focus of the raids was Michael Grimes, a retired UAW official who had been administrative assistant to current union Vice President Cindy Estrada. Grimes was charged on August 14 in Ann Arbor federal court with wire fraud and money laundering related to the nearly $2 million in bribes and kickbacks that he and two unnamed union officials had received from vendors during 2006-2018 in return for contracts totaling $15.8 million to produce UAW-logo items. A portion of those contract awards came from the UAW-General Motors training center, known as the Center for Human Resources. Grimes, who received about $1.5 million, or three-fourths, of the vendor payoffs, pleaded guilty on September 4.

The two unnamed Auto Workers officials in short order were named. They are retired UAW Vice President Joe Ashton and a top aide, Jeff Pietrzyk, also now retired. Last Tuesday, on October 22, Pietrzyk pleaded guilty to conspiracy to commit wire fraud and money laundering. Charging documents indicate that Pietrzyk, now 74, a resident of Grand Island (Buffalo area), N.Y., used his positions as an assistant to Ashton and a member of the executive board of the Center for Human Resources to extract payments from unnamed union vendors as a condition for the awarding of contracts to produce sundry items at GM manufacturing facilities.

These schemes were as brazen as they were lucrative. In one case, Pietrzyk and two other union officials in 2011 demanded that a vendor provide $300,000 in kickbacks related to a $6 million contract for the union to purchase 50,000 jackets bearing the logo “Team UAW-GM.” One UAW official collected the $300,000 and delivered it to Pietrzyk, who in turn delivered that sum to another union official. In another case, Pietrzyk and his co-conspirators during 2013-16 demanded $300,000 in kickbacks from a vendor in exchange for a $3.9 million contract for the Center for Human Resources to buy 58,000 watches for all UAW members employed by GM. Some of these kickbacks took the form of checks under the category “antique furniture” and either deposited in Pietrzyk’s personal bank account or cashed. To add insult to injury, the merchandise never reached its intended beneficiaries. After receiving the watches in 2014, the Center for Human Resources, rather than distribute them to union members, allegedly put stored them in a warehouse where they reportedly remain to this very day. In addition, Pietrzyk also conspired to launder the proceeds from the watches through various complex methods of concealment. All told, he enriched himself to the tune of $123,000.

Currently free on a $10,000 unsecured bond, Jeff Pietrzyk is scheduled for sentencing on March 3. He has agreed to pay full restitution. Pietrzyk’s lawyer, Robert Singer, while not justifying the actions, believes that his client was pressured into participation. “I don’t want to characterize him essentially as a bagman,” Singer said, “but I think he was approached by someone who was in power over him and asked to do something, and he did it and that wasn’t the best choice, and it’s something he regrets.” The prospect for Joe Ashton, who had resigned his union seat on the General Motors board of directors back in December 2017, doesn’t look promising either. With Grimes and now Pietrzyk pleading guilty, it’s almost inevitable Ashton will follow suit.

Federal officials believe that Pietrzyk’s guilty plea is a reminder of the need to maintain the integrity of organized labor. “The hard-working members of the UAW deserve to be represented by union officials dedicated to providing honest representation free of corruption and greed, and today’s guilty plea is another step in the right direction,” said U.S. Attorney Matthew Schneider. FBI Special Agent-in-Charge Steven D’Antuono put it this way: “In his official role, Mr. Pietrzyk was charged with protecting the interests of his fellow union employees, but today he admitted to abdicating this responsibility to serve his own interests. We will continue to work with our law enforcement partners to investigate corruption and ensure the financial integrity of our country’s labor unions.”