By on February 1, 2018


FCA sign, Image: Fiat Chrysler Automobiles

The multimillion-dollar corruption scandal involving the United Automobile Workers and Fiat Chrysler Automobiles is starting to cross the line from hubbub to full-on fiasco. Earlier this week, three FCA employees filed a federal lawsuit against the automaker and the UAW seeking hundreds of millions of dollars in damages over allegations that union officials colluded with company executives to influence collective bargaining.

Meanwhile, a recently released plea deal with former FCA labor relations head Alphons Iacobelli implicated former UAW Vice President Norwood Jewell — the man tasked with overseeing the most recent round of contract negotiations with FCA. Iacobelli claims he and other FCA employees transferred hundreds of thousands of dollars in illegal payments to tax-exempt organizations controlled by UAW officials, including Jewell’s Making Our Children Smile Foundation.

Court documents signed by Iacobelli state he “knowingly and voluntarily joined a conspiracy in which FCA and FCA executives and FCA employees agree to pay and deliver, and willfully paid and delivered, money and things of value to officers and employees of the UAW.”

Earlier corruption allegations saw union heads and Iacobelli himself spending money, syphoned from the UAW-Chrysler National Training Center, on cars, home repair, vacations, parties, baubles, and more. While is plea deal doesn’t name Jewell specifically, it does say Iacobelli authorized salary reimbursements with a phony administration fee as a “gift to the Vice Presidents of the UAW Chrysler Department.”

The plea deal also says Iacobelli authorized salary reimbursements, along with “a fraudulent 7 percent administrative fee” as a “political gift to the Vice Presidents of the UAW Chrysler Department.” As Jewel was only one of two people who held that position during the timeframe of the investigation, General Holiefield being the other, that statement implicates him in the scandal.

Holiefield’s charity, the Leave the Light on Foundation, was another tax-exempt organization named within the plea bargain. His widow, Monica Morgan, has was charged in the initial union corruption probe. She is scheduled for a plea hearing on February 6th in U.S. District Court in Detroit. Retired UAW associate director Virdell King and Jerome Durden, a former FCA analyst who served as treasurer of Holiefield’s charity and as controller of the UAW-Chrysler training center until 2015, have both pled guilty to corruption charges and are awaiting sentencing.

As prosecutors try to uncover exactly what happened, the working assumption (helped by testimony of the accused parties) is that Fiat Chrysler employees like Iacobelli bribed union workers on the sly through various charities and gifts to influence union business decisions. This includes all collective bargaining that took place between 2011 and 2015.

UAW President Dennis Williams denies such activities could have seriously influenced the union’s bargaining process. “There’s just no truth to the allegation that the terms of the collective bargaining agreement were compromised by Iacobelli’s crimes,” Williams wrote to union members on Friday. “Iacobelli’s case is one of personal greed, plain and simple.”

That would be easier to believe if the labor relations chief was the only one to benefit from the mishandling of funds. While Iacobelli certainly had some of the more extravagant items, including a Ferrari and two limited-edition Montblanc fountain pens valued at $35,700, he was not the only person to benefit from the ill-gotten money.

Interestingly, Automotive News reports that the union has banned UAW-affiliated nonprofits from taking donations from the UAW and the joint program centers after the corruption probe began. Jewell also opted to retire in November of last year. While not suspect in itself, high-ranking UAW officials often stick it out until retirement age, or at least until they are voted out. But Jewel didn’t even complete his last term, which would have ended in July of 2018. Instead, he left his post at the end of December.

Back in the realm of class-action lawsuits, Michigan law firm Sterling Attorneys at Law filed a complaint last week with the U.S. District Court in Detroit. The three FCA employees say they represent thousands of other union workers who have been wronged. The complaint argues that UAW members “paid tens, if not hundreds of millions of dollars in Union dues for a transaction tainted by the conspiracy between FCA and the UAW.”

While the federal investigation has since branched out to include General Motors and Ford, no union or company officials have been formally charged with any crimes. Last November, both automakers also said they were fully cooperating with the investigators who subpoenaed information about their joint UAW training centers.

[Image: Fiat Chrysler Automobiles]

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11 Comments on “This Union Corruption Scandal Is Getting Awfully Messy...”

  • avatar

    Someone’s gonna end up falling on a sword like Frankie “Five Angels” Pentangeli.

  • avatar

    “Making our Children Smile Foundation”

    Well who could suspect an organization with a name like that?

  • avatar

    I’m sorry; but the assertion that the naked bribes didn’t effect negotiations is just not credible. FCA didn’t butter up all those UAW officials with ridiculous amounts of money/gifts because they were in a generous mood. Clearly they thought they were getting bang for their buck.

    • 0 avatar

      Absolutely. That’s not to say the UAW workers would have received more, they did vote for ratification after all.

      But clearly the money was meant to smooth the process. The lawsuit filed has some merit, but seemingly impossible to prove what an untainted outcome would have been thus, what damages? Im sure they got a raise in pay and benefits in the last negotiations and Chrysler has always been the least financially healthy of the big 3, so what do you want?

      Anyway, I hate to paint the UAW with such a broad brush, but there is plenty of corruption at the membership level too. How can there not be a boatload of graft at a job you cannot get fired from. But the UAW has never really been good at following the old adage “Never look a gift horse in the mouth.” So killing the goose that laid the golden egg is still on the agenda. “Just as long as I make it to retirement and get to keep MY benefits, who cares what happens to everyone else” remains the battle cry.

      I have to believe though that more top Chrysler brass will roll before its over. You know someone, or even a committee of someones was authorizing the distribution of that much money.

    • 0 avatar
      SCE to AUX

      Exactly. This story isn’t over yet.

      And I don’t blame the FCA employees filing suit to get their money back.

  • avatar

    Just wondering, what does one do with a Montblanc fountain pen valued at $35,700? Do you carry it around in your pocket so that you can pull it out a couple of times a week to sign something?

    I don’t even want to wear an expensive watch out of concern that I’ll damage or lose it. I can’t imagine toting $38K around in my shirt pocket.

  • avatar

    That’s a pretty expensive pen. To keep it safe, it must have been personalized: “Stolen from Alphons Iacobelli”.

  • avatar
    Tele Vision

    Back in the 2000s I was a Teamster for a few years. It was mandatory to join the union upon being hired. Every few months there would be a greasy-looking guy sitting in our lunchroom. He wasn’t allowed to initiate conversation but he’d smile at everyone, inviting same, which might lead to a chinwag. No one ever spoke to him. He just represented $7.00 off of every pay check to us. When I got Lead Hand ( which, in that company, was akin to lower-management but still in the union, i.e. ‘Tell Us What The Union Workers Are Doing And Thinking’ ) I learned more about that unions’ methodology and practices as regarded that company. Pretty garbagey stuff. Our ‘Shop Steward’, such as he was, was both a lazy bastard and a fanatical softball player. He twice tried to initiate strikes so that he could attend softball tournaments. Unions were necessary in the early-to-mid 20th Century but are now, mostly, an unnecessary evil.

    • 0 avatar

      So was the purpose of the greasy-looking guy some kind of intimidation? Like they’re rubbing it in your noses? Maybe they should send in some hot looking chick … at least give you something nice to look at. I’m thinking of like the girls at car shows… (haha)

      Thanks for sharing your comment! Oh, I can’t imagine where I work … that we’d have to keep/ pay for worthless people. That would just be discouraging on those of us that work hard to keep the business running in a very competitive environment.

    • 0 avatar

      Indeed! Forty plus years of stagnant wages and declining benefits for stake holders demonstrates there is no need for collective bargaining.

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