A United Auto Workers official has been hit with charges related to wire fraud and money laundering as part of the United States Department of Justice’s ongoing investigation into the worker’s union.
The official, Michael Grimes, is the first non-Fiat Chrysler UAW representative to be charged as part of the Justice Department investigation into the worker’s union. Grimes worked under the UAW’s General Motors department, serving as an administrative assistant before retiring abruptly last year.
Federal prosecutors allege Grimes received $1.99 million in illegal kickbacks between 2006-2018 after he organized UAW apparel and accessory contracts with companies owned by associates of his. His arrest could lead to the charges of more UAW GM employees as well, with the indictment against him alleging he worked under the direction of other senior officials.
Grimes’ scheme allegedly involved taking bribes in exchange for valuable union contracts for clothing – some of which were purchased through the UAW-GM Training Center. In one instance, he received a kickback worth $250,000 in exchange for a contract for over 50,000 UAW-branded watches. The watches were never delivered and are still sitting on UAW-GM Training Center property.
In a statement, the UAW said Grimes “benefitted only himself, not the UAW membership, and should be fully prosecuted to the extent of the law.”
“We are committed to continue putting in place more strong, enforceable reforms and more stringent financial controls throughout the Union,” the statement also said.
GM said it was co-operating with the federal investigation into the matter.
It’s expected that other GM UAW officials will be investigated going forward as well.
According to MLive, Grimes was a Democratic National Convention delegate in 2016 and was described by the UAW as “one of our own,” in a profile on its website.
“Mike has spent a lifetime helping and representing brothers and sisters in the UAW,” the profile said. “He has done everything from being a committeeman from ‘Down in the Hole’; to being Cindy Estrada’s (administrative assistant) during her past tenure being the VP for GM. Mike has been a lighthouse for all the UAW, and especially here at his home Local 659.”
The charges against Grimes carry a maximum sentence of up to 30 years.