Editor's note: An earlier version of this story included a reference to a 6th U.S. Circuit Court of Appeals decision that applied to Judge Borman’s ordering of a meeting between the CEOs of GM and FCA, not the merits of the case itself. It has been removed.
DETROIT — General Motors filed a motion for reconsideration of its racketeering case against Fiat Chrysler Automobiles, now alleging that FCA and co-conspirators are guilty of "corporate espionage" that directly harmed GM.
"New facts about the direct harm FCA caused GM have come to light and they are detailed in our amended racketeering complaint. These new facts warrant amending the court's prior judgment, so we are respectfully asking the court to reinstate the case," GM said in a statement.
GM's racketeering suit, filed in November, accused FCA of coordinating a yearslong bribery scheme with UAW leaders to gain an unfair labor-cost advantage. Last month, U.S. District Judge Paul Borman dismissed the case with prejudice after calling it a distraction for the companies and a "waste of time and resources for the years to come."
"As we have said from the date the original lawsuit was filed, it is meritless," FCA said in a statement on Monday. "The court agreed and dismissed GM’s complaint with prejudice. FCA will continue to defend itself vigorously and pursue all available remedies in response to GM’s attempts to resurrect this groundless lawsuit.”
GM's filing on Monday in U.S. District Court in Detroit says FCA and co-conspirators used a broad network of foreign bank accounts containing millions of dollars in Switzerland, Luxembourg, Liechtenstein, Italy, Singapore and the Cayman Islands to directly harm GM.
GM points to UAW Vice President Joe Ashton, who later joined GM's board as the UAW Trust's designee in 2014, former UAW President Dennis Williams and defendant Alphons Iacobelli, who left FCA in 2015 and then joined GM. The complaint also raises allegations against former UAW President Ron Gettelfinger, who previously has not been named or implicated in any previous cases of UAW corruption.
The foreign bank accounts were "controlled in part by individuals purportedly acting on GM's behalf" and reveal "a magnitude of bribery and illegal activity specifically targeting GM that was not previously known or reasonably knowable," the filing said.
The 'paid mole'
GM detailed Ashton's role as a "paid mole" inside its boardroom and claimed that Iacobelli, after joining GM, funneled information to FCA. FCA provided Iacobelli and a family member with "millions of dollars" through funds currently in accounts in Italy, Liechtenstein, Switzerland and Singapore, the filing said.
Control over Iacobelli’s accounts and possibly further compensation from FCA continued after Iacobelli left FCA and remain available to Iacobelli today. They are managed by his wife, the filing says.
The funds were used as payment not only for his role in the alleged racketeering scheme, but also for protecting high-ranking FCA executives.
In 2015, Iacobelli resigned from his post as vice president of employee relations at FCA. His responsibilities in that role included negotiating and implementing labor agreements with the UAW. Shortly after leaving FCA, Iacobelli began reaching out to GM labor employees, seeking information about GM’s 2015 bargaining, GM’s filing says.
GM claims that Iacobelli spent months requesting that GM hire him in its labor department.
GM has said that it knew of no wrongdoing by Iacobelli or FCA at the time. GM hired him in 2016, and Iacobelli shared GM’s confidential labor strategy with FCA, the filing says.
GM says Iacobelli continued to protect those executives even after he agreed to cooperate with the criminal investigation and pleaded guilty to conspiracy to violate the Labor Management Relations Act and filing a false tax return.
Iacobelli now is serving his five-and-a-half-year sentence in federal prison in Morgantown, W.Va., for his role in the scandal. His sentence is scheduled to be complete Sept. 8, 2023.
Ashton’s role as vice president of the UAW-GM department was critical to ensure that GM did not receive the labor programs and advantages that FCA received, GM’s amended complaint said. GM claims that Ashton shared confidential GM information with UAW and FCA executives, such as GM’s strategies connected with the 2015 UAW labor contract negotiations, the most significant risks GM identified related to the negotiations and discussions of FCA’s merger proposal.
Ashton provided the information to the UAW and FCA, allowing them to adjust their approaches to labor negotiations and merger efforts, the filing says.
In 2017, amid the federal corruption probe, GM tried to question Ashton about his knowledge of wrongdoing. Ashton refused to speak to GM, breaking company policy, and resigned from the board, GM said.
"The newly discovered evidence confirms that GM was the target of defendants' scheme, as the scheme was directed not only through the UAW, but also from payments to individuals within GM to maximize the direct harm to GM," the filing said.
Williams, meanwhile, has been implicated in the government's ongoing investigation into UAW corruption but has been not charged with a crime. Ashton and former UAW President Gary Jones are awaiting sentencing in U.S. District Court in Detroit following their guilty pleas on corruption charges. Jones could face 10 years in prison but may also get a lighter sentence if he cooperates with the government.
Gettelfinger, UAW president from 2002 to 2010, also received payouts from FCA through offshore accounts in Panama and Switzerland in his name and the name of a family member, GM claims. Gettlefinger has not been implicated in the federal corruption probe. He could not be reached for comment on Monday.
“The UAW is unaware of any allegations regarding illicit off-shore accounts as claimed this morning by GM 'on information and belief,' nor has the U.S. Attorney’s Office, or anyone else, ever raised this type of allegation with the UAW," the union said in a statement on Monday.
"If GM actually has substantive information supporting its allegations, we ask that they provide it to us so we can take all appropriate actions. If any such payments were made or such bank accounts exist, it would obviously be a gross violation of the law, the UAW Constitution, and the oath and responsibilities of anyone in UAW leadership."
GM said it was unaware of the offshore accounts when it filed the initial lawsuit in November. It planned to gather banking information during formal discovery -- a stage the case never reached. GM hired investigators to obtain the banking information, which took several months amid the coronavirus pandemic, the filing said.
GM's amended complaint was about 30 pages longer than its original lawsuit. GM's new allegations have not surfaced publicly in the government's ongoing corruption probe of the UAW, which could ultimately lead to a takeover of the union by the government. U.S. Attorney Matthew Schneider and current UAW President Rory Gamble met in late June to discuss the union's ongoing reform efforts and discussed the possibility of an independent third-party monitor of the union.
In an emailed statement, Schneider's office said on Monday: "We’re aware of the allegations made by GM in the court papers and have no further comment."
Vince Bond, Michael Martinez and Philip Nussel contributed to this report.