FCA execs paid UAW officials to take company-friendly positions, U.S. says

January 23, 2018 12:00 AM

Al Iacobelli admitted he and other FCA executives or employees paid "senior UAW officials" more than $1.5 million in an effort to "obtain benefits, concessions, and advantages for FCA in the negotiation, implementation, and administration" of contracts.

DETROIT -- Confidential retirement offers and a former union vice president being "scripted" to support company initiatives are among the newest allegations in the UAW-FCA corruption scandal.

The information was released as part of a plea deal between federal officials and former FCA labor relations chief Alphons Iacobelli, who pleaded guilty Monday to two of seven charges related to his role in siphoning more than $4.5 million in training center funds to union and company officials.

The details, for the first time since the investigation was made public in July, show federal officials saying company executives paid UAW officials in an attempt to influence union decisions and collective bargaining agreements, which were ratified in 2011 and 2015.

Iacobelli, 58, according to the plea, admitted he and other FCA executives or employees paid "senior UAW officials" more than $1.5 million in an effort to "obtain benefits, concessions, and advantages for FCA in the negotiation, implementation, and administration" of the agreements.

The investigation started with a training center jointly operated between the union and FCA but has since expanded to similar operations with Ford Motor Co. and General Motors, where Iacobelli was employed following FCA. No union or company officials with GM or Ford have been formally named or charged with any crimes.

Iacobelli has agreed to cooperate in the Justice Department's ongoing investigation into alleged misspending at union training centers funded by U.S. automakers, according to the plea deal.

The alleged payments included paying off a mortgage for $262,219, first-class airline travel, designer clothing, furniture, jewelry and custom-made watches.

Not previously detailed was a $30,000 party for a union official that included "ultra-premium liquor," more than $7,000 worth of cigars and more than $3,000 in wine with custom labels. The party allegedly occurred at an FCA training center in Warren, Mich.

UAW officials, including President Dennis Williams, have contended that the alleged activities could not have impacted negotiations, as union members have the final vote on the contracts, which are bargained between dozens, if not hundreds, of individuals.

The corruption of a few, the union and company have argued, could not influence all of the committees and members.

A UAW spokesman on Monday reiterated that the union is "appalled at these charges" and has taken measures to "reduce the risk of any future recurrence of these activities." He declined to comment directly on the newest allegations, referring to previous statements from Williams.

'Scripted'

The plea agreement details at least two specific occurrences that raise concerns about the alleged payments influencing union business.

The first, feds say, occurred in December 2013. Iacobelli, according to the plea deal, sent an email to another "FCA executive" confirming then-UAW Vice President General Holiefield, now deceased, had been "scripted" ahead of a meeting with other members of the union's International Executive Board.

Iacobelli, in the email, said Holiefield would "create a dialogue pursuant to our outline." At the time, the executive board was considering the terms of a multibillion-dollar offer to purchase equity interest held by the UAW Retiree Medical Benefits Trust, or VEBA, in Chrysler Group, now known as FCA US. The transaction was completed a month later.

The second occurrence allegedly occurred in February and March of 2015. FCA, according to the plea, offered to pay confidential "one-time non-precedent setting" retirement offers to "senior UAW officials."

An unnamed union official allegedly said in an email that his people would "process the transactions to keep them out of the plants."

Things such as "targeted buyouts" are not uncommon, however, they are typically based on job classification, department or years of seniority and not exclusively offered to handpicked senior leaders.

More charges coming?

Iacobelli is one of four people charged in connection with the case. The others are Virdell King, a retired UAW associate director; Jerome Durden, a former FCA financial analyst; and Monica Morgan, Holiefield's widow.

Durden and King pleaded guilty to charges and are scheduled to be sentenced separately this year.

Morgan is scheduled for another plea hearing Feb. 6.

Iacobelli's plea deal adds several unnamed individuals who were not previously mentioned in other court documents, which could mean additional charges are still to come.

"So long as such practices exist, the FBI and its federal partners will continue to aggressively root out corruption in both corporate and labor union boardrooms," David Gelios, special agent in charge, Detroit Division of the FBI, said in a statement.

Iacobelli pleaded guilty to conspiracy to violate the Labor Management Relations Act and subscribing a false tax return. Sentencing is scheduled for May 29. He faces a statutory maximum of eight years in prison, and prosecutors said he will be required to repay $835,000.

Jackie Charniga contributed to this report.