Fiat Chrysler's U.S. unit reached an agreement to settle a criminal probe by U.S. prosecutors into conduct of some former employees tied to the ongoing UAW corruption scandal.
FCA US, which is now part of Stellantis, said Wednesday it agreed to plead guilty to a single count of conspiracy to violate the Labor Management Relations Act and pay a $30 million fine. The automaker has also agreed an independent compliance monitor for three years.
U.S. Attorney Matthew Schneider said the criminal conduct by FCA and its executives has significantly undermined the confidence and trust those working in the plants and assembly lines hold in their leaders. The crimes, he said, have also undermined the workers trust in the integrity of the collective bargaining process.
From 2009 to 2016, Schneider said FCA conspired to make over $3.5 million in illegal payments to UAW officials.
During those years, he said FCA executives, including FCA’s former senior vice president in charge of labor relations, Alphons Iacobelli, directed millions of dollars to UAW officers in the forms of extravagant meals, rounds of golf, lavish parties for the UAW international board, designer shoes, and clothing.
FCA, he said, even conspired to pay off a $262,000 home mortgage of a UAW vice president.
An investigation into Ford, he said, is ongoing.
“Congress enacted the Taft-Hartley act to ensure that union members can have confidence that union leaders would not be tainted or improperly influenced by payments from employers,” Schneider said during a Wednesday press conference. “FCA officials, by improperly giving lavish gifts and cash to UAW leaders, violated that principle.”
Schneider said the proposed plea agreement is not yet filed.
It must be reviewed and approved by a United States District Court judge, and Schneider said he’s hopeful that process will be a smooth one. If approved, he said a plea hearing will be scheduled in the near future.
Schneider said some may wonder why prosecutors sought a criminal charge against FCA, but not the UAW as an institution.
He said in most cases the criminal violations related to the UAW involved individual UAW officials seeking to satisfy their own greed. They sought to benefit themselves, he said, rather than to benefit the UAW. In many instances, he added, they stole from the UAW. He pointed to UAW presidents who were embezzling money from the membership and committing fraud, which is not for the benefit of the UAW.
“FCA's crimes were different,” Schneider said. “FCA executives [were] acting in the interest of FCA, and doing so, they made illegal payments to UAW officials. They did that with the hope that the company itself could possibly get more favorable treatment from the union leaders. And that's why the criminal resolution for FCA is appropriate.”
Schneider wouldn’t comment on any potential role that late FCA CEO Sergio Marchionne may have had in the scheme, saying the U.S. government does not indict or charge the deceased.
Last month, the UAW agreed to independent oversight to resolve a five-year federal corruption investigation that ensnared two former UAW presidents.
The U.S. Attorney's Office said the UAW had paid back over $15 million for improperly billing Ford Motor Co. and FCA for employing members who did not work at the training centers operated by the union and the companies.
Schneider's office has charged former UAW officials as part of its investigation, and former presidents Gary Jones and Dennis Williams both have pleaded guilty to embezzling union funds.