Feds Allege FCA Executives Bribed UAW Officials to Play Nice

Matt Posky
by Matt Posky

Former Fiat Chrysler labor relations chief Alphons Iacobelli pleaded guilty to two of seven charges relating to his role in a plan to divert more than $4.5 million in training center funds to union and company officials on Monday. As part of a plea deal with federal authorities, Iacobelli provided information regarding confidential retirement offers and a former union vice president being groomed to support company initiatives.

In an admission that he and other FCA employees paid various senior UAW officials over $1.5 million in an effort to “obtain benefits, concessions, and advantages for FCA in the negotiation, implementation, and administration,” Iacobelli is now helping map the deepening mire that is the FCA-UAW training center scandal.

While we’ve previously covered the ludicrous union-related “misspending,” Automotive News outlined a handful of new expenditures not previously listed in court documents. Among those was a $30,000 party for a union official that included ultra-premium liquor, more than $7,000 worth of high-end cigars, and more than $3,000 in wine. The party allegedly took place at the FCA training center in Warren, Michigan.

A UAW spokesman reconfirmed that the union is “appalled at these charges” and has taken steps to “reduce the risk of any future recurrence of these activities.” However, he declined to comment on the newest allegations. Meanwhile, UAW President Dennis Williams is attempting to downplay any corruption by saying the alleged misdoings could not have impacted negotiations in any meaningful way.

As union members have the final vote on the contracts, which are bargained between dozens and sometimes hundreds of individuals, he contends that a handful of corrupted officials wouldn’t sway the majority of the UAW’s committees and members.

However, Iacobelli’s plea agreement highlights at least two specific occurrences where the alleged bribes may have influenced union business.

From Automotive News:

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.”

Three other individuals have been charged in connection with the case. They include Virdell King, a retired UAW associate director; Jerome Durden, a former FCA financial analyst; and Monica Morgan, Holiefield’s widow. Both Durden and King have pleaded guilty to charges and are scheduled to be sentenced later this year, whereas Morgan faces another plea hearing in February.

As Iacobelli continues to work with authorities to establish the full scope of the scandal, more defendants are likely to crop up in the months to come. He has already pointed to several unnamed individuals’ involvement in the scheme. Having already pleaded guilty to violating the Labor Management Relations Act and subscribing a false tax return, his sentencing is scheduled for May 29th. He faces a statutory maximum of eight years in prison and will be required to repay $835,000 in stolen funds. Both Fiat Chrysler and General Motors cut ties to Iacobelli prior to his admission of guilt.

“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 an official statement.

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Heino Heino on Jan 23, 2018

    Wife is a union mediator at the federal level, including the sometimes awkward NHL or SAG ($$$$) union. But there are times it is just tough love with them, Longshoremen vs. IBEW ???. Despite what some may perceive about the feds, they follow the law no matter what party is in charge. There are always stories of excess on both sides, but in the last 20 years that I have known her, the saddest people were the non-union middle management types who were afraid for their jobs if they didn't eff the unions. Do you shower before or after work? Yeah.

  • Geekcarlover Geekcarlover on Jan 24, 2018

    Negotiations "between dozens, sometimes hundreds of individuals" means bribes to a small number are irrelevant? I can't wait for a member of Congress to try "I was only one, of hundreds of votes. It doesn't matter whether I was paid or not."

  • V16 Lobbyists, not a Senator from Missouri are the real power brokers in Washington.Money, the mother's milk of politics dictate every outcome.
  • The Oracle This one will push past 400K with another timing belt and basic maintenance.
  • Ajla I'll be the odd man out here and say I don't have a problem with this. It isn't like we are blocking a crack EV program from Spain. I don't consider China a friendly nation and I think a lot of you are whistling past the graveyard. Also as some commenters have already posted it is very difficult to separate Chinese corporations and the Chinese government. I like affordable cars but not that much. Yes, the ideal might be to make US EVs so amazing that BYD retreats back but that takes time so what happens in the meantime?
  • Daniel J Test drive the previous gen envision and couldn't bring myself to buy one over a Japanes made Mazda.
  • E Rocket boosters, boat capability, 600+ mile range, what other nonsense has he promised? And it will be here in probably about 18 months or so.Now give Tesla your deposit so they can have another interest free loan, and make it snappy!
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