Former UAW official becomes 9th person charged in corruption probe

August 14, 2019 08:41 PM UPDATED AN HOUR AGO
Former UAW official becomes 9th person charged in corruption probe
DANIELLE SZATKOWSKI

DETROIT — A former UAW official affiliated with the union’s General Motors department faces charges for wire fraud conspiracy and money laundering in connection with a multi-year federal corruption investigation.

In court records filed on Wednesday, federal prosecutors accuse former UAW senior official Michael Grimes and other unnamed UAW officials of accepting bribes and kickbacks in the form of cash, checks and other valuable items worth hundreds of thousands of dollars.

From 2006 to July 2018 Grimes was a senior UAW official who “at times worked closely with the UAW Vice President and Director of the GM Department,” the court filing states. UAW Vice President Cindy Estrada headed the union’s GM department from 2014 until mid-2018. She now heads the UAW’s FCA department. Grimes retired from the UAW in July 2018.

Court records accuse Grimes, who also served on the executive board of the UAW-GM Center for Human Resources, of demanding an unnamed vendor provide a mortgage for $60,000 so that he could buy a property in Michigan. He also recommended that the vendor provide 23,000 watches to the center to distribute to one of GM’s powertrain divisions, the filing states.

Prosecutors say that following the 2006 watch order, Grimes continued to accept cash bribes and kickbacks from the unnamed vendor on an almost monthly basis. The payments ranged from $1,800 to $3,800.

Prosecutors claim Grimes concealed the bribes by having the vendor make checks payable to one of his relatives or to “KKG Consulting,” which was a “sham” company in the name of his relative.

From November 2010 to about October 2017 “Grimes accepted from Vendor A approximately 27 checks totaling almost $900,000 payable to his relative or to KKG Consulting,” prosecutors wrote.

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The Detroit News first reported the charges against Grimes earlier Wednesday.

Grimes is the ninth person charged in the ongoing scandal and the first former UAW official not connected to either the union’s FCA department or the UAW-Chrysler National Training Center.

Previously charged were Alphons Iacobelli, a former FCA labor relations chief; Jerome Durden, a former FCA financial analyst; former FCA employee Michael Brown; former UAW Vice President Norwood Jewell; ex-UAW associate director Virdell King; former UAW official Keith Mickens; Nancy Adams Johnson, a former top aide to Jewell; and Monica Morgan, wife of former UAW Vice President General Holiefield.

“Mike Grimes benefited only himself, not the UAW membership, and should be fully prosecuted to the extent of the law,” UAW spokesman Brian Rothenberg said in an emailed statement to Automotive News.

GM, in a statement, said it has been “fully cooperating with the government on its investigation of the UAW Center for Human Resources, and will continue to do so. As a matter of practice, we do not comment on the specifics of an ongoing investigation.”

Michael Martinez contributed to this report.

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