Feds: Fiat Chrysler tried to alter labor talks
Statement surfaces in training center scandal
Federal prosecutors say Fiat Chrysler Automobiles, through a key defendant in the wide-ranging training center scandal, “sought to corrupt and warp the labor-management relationship” with senior union officials.
The statement in a sentencing memorandum for Alphons Iacobelli, a former vice president of employee relations for Fiat Chrysler, is part of what appears to be a dramatic uptick in the allegations directed toward the automaker.
Prosecutors said the automaker wanted to influence labor contracts and that union officials failed in their duties to represent union members.
The company insisted that wrongdoing was limited to certain bad actors and did not affect contract bargaining with the United Auto Workers.
“FCA sought to obtain benefits, concessions and advantages in the negotiation and administration of collective bargaining agreements with the UAW in an effort to buy labor peace,” federal prosecutors said in a 14-page sentencing memo filed Monday in court. “High-level officials of the UAW sought to enrich themselves and live lavish lifestyles rather than zealously work on behalf of the best interests of tens of thousands of rank and file members of their union.”
Fiat Chrysler provided more than $9 million in illegal chargebacks – money from FCA used to pay the salaries of UAW officials at the training center, a place that was supposed to provide for autoworker training – between June 2009 and July 2017, according to prosecutors. The government said Iacobelli and FCA viewed the chargebacks as a political gift to the UAW and that high-level UAW officials assigned union officials to the training center “with no intention that they would perform any real work at the NTC.”
The dollar figure suggests the government believes it was an even pricier scheme than previously reported. Earlier stories had focused on allegations that $4.5 million had been misused, in part, on clothing, jewelry and travel.
In its response, the company called itself a victim in the case. The company said the actions involved “a small number of bad actors, who, for personal gain, misappropriated training funds entrusted to their control and who, unfortunately, co-opted other individuals who reported to them to carry out or conceal their activity over a period of several years.”
The union has also insisted the case is limited to a few bad actors.
“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,” thenUAW President Dennis Williams said last year.
The sentencing paperwork does, however, also focus on the specific role of Iacobelli, with the government pointing to his efforts to cooperate and suggesting a sentence of six years and four months rather than a possible eight-year sentence. Iacobelli is scheduled to be sentenced Aug. 27.
Officials said Iacobelli worked closely with the late General Holiefield, a former UAW vice president, on the scheme. Holiefield’s widow, Monica Morgan, was the first person to be sentenced in the scandal. Last month, Morgan, a metro Detroit photographer, filed paperwork to appeal her 18month sentence on a tax charge, to which she pleaded guilty in February. Officials said Morgan hid $201,000 on her 2011 taxes, and Morgan, in plea documents, acknowledged the money came from criminal activity.