FCA, UAW co-conspirators in training center scandal, prosecutors say
DETROIT -- Federal prosecutors for the first time have labeled Fiat Chrysler Automobiles and the UAW co-conspirators in the corruption scandal surrounding the automaker and union's jointly run training center.
The allegation was in a May 25 federal court plea agreement obtained by The Detroit News.
The filing says: "From in and before 2009 through 2015, FCA executives conspired with one another, with FCA, with officials at the UAW and with the UAW, to violate the Labor Management Relations Act."
It also says former FCA officials Alphons Iacobelli, Jerome Durden and others acting in the interest of the automaker concealed more than $1.5 million in "prohibited payment and things of value" paid to officers and employees of the UAW.
The allegation could expose the automaker and union to criminal charges, fines and government oversight.
Peter Henning, a Wayne State University law professor, told The Detroit News: "This does not bode well for Fiat Chrysler and the UAW. All along, the union and Fiat Chrysler have portrayed themselves as victims, but this indicates the government has a different view."
Last week, the training center filed a lawsuit seeking to recover more than $4.4 million in damages, accusing Iacobelli, Durden and Monica Morgan, widow of former UAW Vice President General Holiefield, of conspiracy to embezzle the money.
The more than $4.5 million federal corruption scandal between FCA and the UAW has plagued the automaker and union since July 2017.
Luxury cars, premium liquor
Prosecutors in the case contend that FCA employees and executives paid UAW representatives to influence union business -- including collective bargaining negotiations, which were ratified in 2011 and 2015. Government documents also said these officials siphoned money through the UAW-Chrysler National Training Center, and used false charitable donations and training center credit cards to pay for non-business-related items such as luxury vehicles, premium liquor for social gatherings, first-class travel and clothing.
Seven people have been charged in the corruption scandal thus far, and six have pleaded guilty. Most recently, in May, Michael Brown, a former FCA employee, pleaded guilty to one count of lying to a federal grand jury about the scandal.
Others charged in the case are: Iacobelli, a former FCA labor relations chief; Morgan-Holiefield; Durden, a former FCA financial analyst; ex-UAW associate director Virdell King; and UAW official Keith Mickens. Nancy Johnson, a former top aide to ex-UAW Vice President Norwood Jewell, was also charged for misusing funds but has not yet been arraigned.
Morgan was the first to plead guilty to one count of subscribing a false tax return. Iacobelli pleaded guilty to two of seven charges for his role in the scandal, including conspiring to violate the Labor Management Relations Act and for subscribing a false tax return. King and Mickens also pleaded guilty to conspiracy to violate labor laws. Durden pleaded guilty to conspiracy to defraud the government and failing to file a tax return.
Jewell, who retired at the end of last year, has been implicated in the scandal but has not yet been formally named as a conspirator or charged by investigators.
'Crook and liar'
Following Iacobelli's plea deal in January, now-outgoing UAW president Dennis Williams said in a statement: "Al Iacobelli by his own admission is a crook and a liar. He stole funds for his personal gain."
"Mr. Iacobelli also appears to have corrupted a handful of former UAW officials who worked at the NTC, most significantly former UAW Vice President General Holiefield. The fact that Mr. Holiefield and others allowed themselves to be corrupted by Mr. Iacobelli was and is a terrible betrayal of our union’s trust."
On Monday, Williams said: "To be clear, those who misallocated or misused training center funds betrayed our trust. The UAW has zero tolerance for corruption or wrongdoing, at any level of the organization. Now, our leadership team had no knowledge of the misconduct -- which involved former union members and former auto executives -- until it was brought to our attention by the government."
Brian Rothenberg, UAW senior communications adviser, told Automotive News he believes the "new President will address this further at his press conference (Thursday)."
Three FCA employees filed a federal lawsuit against the automaker and the union in January, seeking more than $4.4 million in damages over the allegations, including nearly $2.7 million from Iacobelli; more than $1.1 million from his wife, Susanne Iacobelli, who the suit says also benefited from the conspiracy; $539,219 from Morgan; and $70,300 from Durden, though some of the funds being sought could overlap.
The complaint has sought class-action status as the FCA employees said they represented thousands of other union workers.
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