By on November 6, 2018

Uaw-Logos

The training center embezzlement scandal currently rocking the United Auto Workers began with the indictment of a former Fiat Chrysler labor chief who offered kickbacks to select union officials in exchange for favorable treatment. Alphons Iacobelli, the ex-FCA executive in question, was sentenced to five years in federal prison last August but spent nearly 10 months helping the FBI’s investigation into unionized corruption, resulting in additional indictments.

Federal prosecutors have secured convictions of seven people linked to the conspiracy at this point, claiming FCA executives provided gifts or covert cash payments through the jointly operated UAW-Chrysler National Training Center in an effort to influence collective bargaining. It became such a problem that several union officials now claim they engaged in illicit activities because they were fearful of bucking the trend, losing their six-figure salaries, and being forced back onto factory floors — you know, like the people they were supposed to be representing. 

Keith Mickens, one of three individuals to face sentencing this week, served directly under former UAW Vice President General Holiefield. Mickens struck a plea deal with federal prosecutors in April, admitting he purchased more than $7,000 worth of personal items using FCA funds intended for auto workers. He also helped procure illegal funds to assist Holiefield and his “widow” in buying a pool for their home.

According to The Detroit News, Mickens’ lawyer Robert Sheehan claimed he was part of a much larger problem involving the normalization of illicit activity within the union. “The culture of the UAW staff at the NTC under the Holiefield administration was one that you were expected to do what your superiors asked of you,” Sheehan wrote in a court filing. “The consequences of a failure to do as you have been told would have quickly led you back into a factory and to be ostracized by UAW leadership.”

While it sounds like a standard excuse for a lawyer to make in such a case, prosecutors don’t think he’s that far off.

“This investigation and prosecution has revealed that there was a culture of corruption in the senior leadership of the United Auto Workers union,” Assistant U.S. Attorney David Gardey wrote in Mickens’ sentencing memorandum. “Leaders of the UAW viewed the National Training Center as a mechanism to take apparently unlimited and illegal payments from Fiat Chrysler for their own personal benefit, for the benefit of the union itself, and for their own lavish entertainment.”

Federal prosecutors have already hinted that more charges are likely in the coming months. In the interim, U.S. District Judge Paul Borman has to decide an appropriate punishment for Mickens. His lawyer requests probation; the opposition wants 16 months in a federal prison.

Fiat Chrysler financial analyst Jerome Durden is also scheduled for sentencing this week. However, this could be delayed, as he continues to assist in the investigation. “Durden is engaged in ongoing cooperation in the criminal investigation of other individuals and entities concerning illegal payments made by FCA and its executives to the UAW and its union officials,” Assistant U.S. Attorney Erin Shaw wrote in a court filing.

Durden served as controller of the training center, and was caught filling erroneous tax returns that concealed the labor conspiracy. He also served as treasurer of Holiefield’s fake children’s charity, the Leave the Light On Foundation. That organization, along with Hospice of Metropolitan Detroit, served as ways for UAW officials to conceal a significant portion of the illegal funds. The prosecution estimates both were used to funnel several hundred thousand dollars to union executives. However, the total embezzled funds and gifts are estimated to be in excess of $4.1 million.

“The stated purpose of [the foundation] was to raise money to be used for charitable and community activities, but in reality, the [foundation] was used to direct additional prohibited payments to UAW Vice President General Holiefield and his mistress, Monica Morgan,” Shaw wrote.

Holiefield died in March of 2015, before he could be charged. Morgan was sentenced to 18 months in federal prison over the summer for failing to report income funneled through the training center.

Michael Brown, a former Fiat Chrysler executive who helped run the UAW-Chrysler National Training Center, will also be sentenced Wednesday for helping cover up the conspiracy. He’s expected to see a 12-year sentence, but prosecutors hope he’ll cooperate with the investigation in exchanged for a reduced sentence.

Former UAW labor executive Virdell King of Detroit pleaded guilty to embezzlement charges last year; she’s expect to see sentencing on November 13th. “Persons like Ms. King are beholden to their superior, and if such a person outlasts her or his welcome that person is demoted or, worse, terminated from the International (UAW) and, if the person wants to keep the union job, sent back to the plants,” King’s attorney, John Shea, told the court.

It’s believed that federal prosecutors are currently building a case against several higher ranking UAW officials and at least one more FCA employee. Keep in mind that everyone is innocent until proven guilty, as the government has a lot of suspects right now.

Get the latest TTAC e-Newsletter!

Recommended

10 Comments on “UAW Courtroom Drama Reveals ‘Culture of Corruption’ Among Senior Leadership...”


  • avatar
    JohnTaurus

    Thank God for modern unions. I can’t tell you the number of times I’ve personally been killed on the job because I’m not a member and they didn’t protect me. All those dues go to do great things, rest assured.

    And, when there was a guy on our crew who was constantly late or MIA, got caught sleeping and was always screwing around instead of working, he was simply fired. I know! You’re thinking the same thing I am: It’s too bad the union wasn’t there to save his job. Such a sad situation.

    • 0 avatar
      highdesertcat

      And keep in mind that President Trump is a Union Man; all out for bringing manufacturing jobs back to the US and increasing union-membership all around.

      He’s done it over the past two years in office, continues to do it now and will continue to do it in the future.

      I caught a few glimpses on CSPAN last night of the raucous rally in MO, the heart of the rust-belt of America.

      It looks to me like Unions in America are back!

  • avatar
    Rnaboz

    I am just SHOCKED that this was occurring! What next, they will want us to vote for a Democrat?! This must be fake news.

  • avatar
    stingray65

    Corruption among Union leadership – say it isn’t so!!! Must be some story made up by Republicans or Faux News – next think you know they will be telling us more fake news about union connections to organized crime, or some phony story about how union pensions aren’t fully funded, or totally bogus stories about how unions are bankrupting state and local governments.

  • avatar
    golden2husky

    Amazing, isn’t it. The very people they are supposed to represent turn into the same as those they are supposed to protect from. Like in Animal Farm, at the end looking at the pigs and the people it was hard to tell one from another… Unions certainly share some culpability in their decline…

    • 0 avatar
      highdesertcat

      Unions had problems in the past, often collectively-bargaining their members out of their jobs by driving their employers into the financial grave with unrealistic demands for healthcare benefits (Cadillac plans) and wages.

      But all that is in the past now because since President Trump came into office, unions have found a new voice and a new spokesperson in the bully pulpit who works daily to return jobs back to the US. It’s working too!

      And in turn, more jobs can often lead to greater union membership. Look for bolder meddling by unions from now on in right-to-work states, especially at the auto plants. The momentum is with the unions.

      Unions get preferential treatment these days, and shady practices are often mitigated or minimized with only a soft slap on the wrist, or a glance the other way.

      Corruption has always existed everywhere you look, but there won’t be any repercussions while President Trump is in office.

      Why would he alienate the people he’s trying to get back to work? The US auto industry is a KEY element of President Trump’s vision for a better, richer, more productive US economy.

      Without it, President Trump will not be re-elected in 2020.

  • avatar
    SCE to AUX

    The simple, noble origins of unions have been forgotten – protecting workers from unsafe conditions and breaches of contract, and securing fair wages. Union dues have been the conduit to corruption – so sad.

  • avatar
    Arthur Dailey

    What of the FCA officials who made the payoffs and the FCA executives who OK’ed them?

    Didn’t FCA benefit from the corruption of this union official?

    To paraphrase Judge Art Vandelay: “I do not know how, or under what circumstances you found each other, but your callous indifference and utter disregard for everything that is good and decent has rocked the very foundation upon which our society is built.”

  • avatar
    tylanner

    It’s all the same game…people will prey on the intellectually weak if not checked…they operate wholly independently of what’s right and only care about lobbying for themselves and those close to them….it is only the constant flow of money that keeps these bad organizations going.

  • avatar
    walleyeman57

    My awakening to the Union was in the 1970’s. As a union steward at our retail store I attended several meetings regarding our expiring contract. We were offered a pittance raise and the union strongly suggested we take it. We voted no on the first go round and prepared for a strike. After paying into the “strike fund” for years, we were informed that said strike fund held $2100. In a work force of over 1000. Seemed the union bosses had incurred higher than normal expenses and the headquarters had a new roof. We settled quickly iirc for $.15/hr.

Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • dukeisduke: The car I recently bought (2014 Kia Forte LX) for Daughter No. 2, after she totaled the 2013 Cruze LS...
  • Maymar: Fair enough – I particularly called out the Camry because it gets 29/41 EPA MPG in addition to doing...
  • Jon: We may have different definitions of a “feature”. A dimension, legroom, headroom, etc. is not a...
  • dukeisduke: Compression fittings? Yikes.
  • dukeisduke: Fer cryin’ out loud, fix the “Read all comments” thing. It’s annoying.

New Car Research

Get a Free Dealer Quote

Staff

  • Contributors

  • Timothy Cain, Canada
  • Matthew Guy, Canada
  • Ronnie Schreiber, United States
  • Bozi Tatarevic, United States
  • Chris Tonn, United States
  • Corey Lewis, United States
  • Mark Baruth, United States