Former UAW official pleads guilty to federal charges

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By Joseph White

DETROIT (Reuters) – A former top official of the United Auto Workers union pleaded guilty on Tuesday to federal charges of financial misconduct while about 48,000 UAW members voted on whether to end a nearly five-week walkout at GM.

Jeffrey Pietrzyk, a former co-director of the UAW-GM Center for Human Resources, pleaded guilty to a charge of wire fraud and a count of conspiracy to commit money laundering, according to court documents. He is the latest in a string of former UAW officials to plead guilty to charges in a wide-ranging Justice Department criminal investigation of corruption within the union.

Federal agents last month raided the homes of the union’s current president, Gary Jones, and former president Dennis Williams (NYSE:). Neither Jones nor Williams has been charged with wrongdoing.

Pietrzyk was charged in connection with schemes to use funds from the UAW-GM Center for Human Resources to buy UAW logo jackets and watches, and then receive kickbacks from the vendors of those goods, according to court documents. On Sept. 4, former UAW official Michael Grimes pleaded guilty to wire fraud and money laundering charges in connection with misuse of Center for Human Resources funds, which were supposed to pay for worker training.

Federal prosecutors charged that Pietrzyk and an unnamed UAW official engineered use of $3.97 million in UAW-GM Center for Human Resources funds to buy watches that the manufacturer had said would cost $2.28 million. An unnamed UAW official then demanded a $250,000 kickback from the vendor for the watches, prosecutors charged. Pietrzyk also received kickbacks disguised as checks for antique furniture, prosecutors charged.

The watches “were never distributed to UAW-represented GM workers and are currently being stored in a warehouse at the CHR,” according to a court document.

Pietrzyk’s sentencing is scheduled for March.

GM and the UAW agreed last week as part of a tentative contract to wind down the Center for Human Resources and sell the multi-story office building on the Detroit River that houses the organization.

The federal criminal probe of the UAW continues, and has cast a shadow over the union’s efforts to bargain for new four-year contracts with General Motors Co (N:), Ford Motor Co (N:) and Fiat Chrysler Automobiles NV (MI:). Federal prosecutors have also accused former union officials of taking bribes from Fiat Chrysler executives, and using UAW funds to pay for lavish parties and winter stays at resorts in Palm Springs, California.

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