DETROIT — In 2013, the training center jointly run by General Motors and the UAW ordered 58,000 custom-made watches — enough to give one to every GM hourly worker and have plenty left over.
But they were never handed out. Today, the $4 million order remains packed away in a warehouse near the Detroit River.
Still, federal investigators say, the deal accomplished what it was intended to do. The UAW official who arranged it collected a $250,000 kickback. Two others split $95,000 disguised as payments for "furniture." That still left well over $1 million in profit for the vendor — a Philadelphia chiropractor who got into the watch business solely to recoup a bad loan he had made to a friend of one of the union officials.
That's just one of the conspiracies that prosecutors detailed last week when filing wire-fraud and money-laundering charges against Michael Grimes, an assistant in the UAW's GM department who retired last year. Grimes, who is accused of collecting nearly $2 million in illicit benefits over more than a decade, is the ninth person charged in a corruption investigation by the U.S. Justice Department.
Notably, he's the first UAW official outside the Fiat Chrysler Automobiles department to be charged, an indication that the probe has expanded just as talks between the union and the Detroit 3 intensify in the final month of their current labor contracts.
The charges against Grimes bring the scandal closer to former UAW Vice President Joe Ashton, who headed the GM department from 2010 through 2014, and current UAW Vice President Cindy Estrada, Ashton's successor until 2018, when she moved to oversee bargaining with FCA instead.
Grimes worked in the UAW's GM department, including as Estrada's administrative assistant. Ashton's time running the GM department matches prosecutors' description last week of when two UAW "senior officials" allegedly took kickbacks in cahoots with Grimes.
Automotive News reported in February 2018 that investigators were looking into Estrada and Ashton. But the charges against Grimes don't mention anyone who matches Estrada's description; she led another unit of the union from 2010 to 2014.
One of the officials — the one who got a $250,000 kickback from the 2013 watch contract — was identified as Ashton by The Detroit News, citing sources.
The UAW's 14-member International Executive Board, which includes Estrada, called the allegations against Grimes "shocking and absolutely disgraceful" in a statement last week. It noted that the union in 2018, as part of its "Clean Slate" reform agenda in response to the scandal, began requiring at least three bids for large purchases.
"UAW members deserve better," the statement said. "We are committed to continue putting in place more strong, enforceable reforms and more stringent financial controls throughout the Union."
GM, in a statement, said it is cooperating fully with the investigation but would not comment further because the matter is ongoing.
Prosecutors said Grimes conspired with the two unidentified senior UAW officials on multiple schemes going back to at least 2006. They said Grimes pressured a vendor of custom UAW logo products into giving him a $60,000 mortgage and periodic bribes totaling nearly $900,000.
The prosecution's criminal information against Grimes says the trio also arranged for the same vendor to sell the training center 50,000 "Team UAW-GM" jackets for $6 million in 2011 and 55,000 backpacks for $5.8 million in 2016. Grimes got the vendor to give him more than $1 million in kickbacks for those orders, the document said.
The government's use of that document suggests Grimes is planning to plead guilty as part of a deal with prosecutors.
