Federal Corruption Probe of FCA Spreads to GM

Federal prosecutors in Detroit have charged another former United Auto Workers union executive—this one with links to General Motors Co.—in a continuing investigation into bribery and illegal kickbacks, The Detroit News reports.

Michael Grimes, who retired last year, is accused of wire fraud and money laundering while serving on the executive board of a joint UAW-General Motors training center.

The charges, which were unsealed yesterday, are the first to expand a probe that initially focused on wrongdoing at a similar facility run jointly by the UAW and Fiat Chrysler Automobiles. To date, nine people have been charged or convicted in the scandal.

Court documents assert that Grimes conspired with two unidentified UAW officials to collect nearly $2 million in kickbacks and bribes from two vendors who supplied promotional products to the union. The scheme ran between 2006 and 2018, according to the News, which says Grimes received payments through a bogus company set up by his wife.

During that period, Grimes was administrative assistant to Cindy Estrada, then vice president in charge of the UAW’s GM department. Last year the UAW reassigned her to head its FCA department.

The News notes that prosecutors filed their charges as a criminal information rather than indictment, a distinction which indicates that Grimes intends to plead guilty. The newspaper points out federal prosecutors have been investigating Estrada for two years.