GM Asks Court to Reinstate RICO Suit Against FCA, Claims New Evidence

Matt Posky
by Matt Posky
gm asks court to reinstate rico suit against fca claims new evidence

Last November, General Motors filed a racketeering suit against Fiat Chrysler Automobiles, claiming its rival was involved in a prolonged bribery scheme with UAW leaders to gain an unfair labor-cost advantage. Despite FCA already having staff participating in a vast union corruption scandal, U.S. District Judge Paul Borman dismissed the GM case in July after claiming there was nothing to it beyond petty corporate squabbling.

Now GM is back, claiming it has new evidence against FCA that’s going to blow the lid off everything.

On Monday, the General asked the court to reinstate the racketeering lawsuit. It now claims that there’s evidence of foreign bank accounts used in the alleged bribery scandal. We say “alleged” despite the FBI’s continued investigation into the UAW (separate from the GM-FCA suit) showing criminal levels of corruption. The company even suggested that Alphons Iacobelli ( who is already serving time for bribing union officials) channeled sensitive information back to FCA after being hired by GM. The claimed plot then has Fiat Chrysler paying the Iacobelli family millions of dollars via overseas accounts.

“These new facts warrant amending the court’s prior judgment, so we are respectfully asking the court to reinstate the case,” GM said.

FCA has continued to call the suit groundless, even though the Iacobelli connection has already cast a shadow over its credibility. Don’t assume that gives GM a free pass, however. In the FBI’s ongoing probe into the UAW, General Motors has come up a few times and is likewise under examination to see how deep its involvement in the union goes. However, it’s seemingly in the clear for now, making this an opportune moment to try and take out FCA.

In its latest finding, General Motors claimed the case “is much broader and deeper than previously suspected or revealed as it involved FCA Group apparently using various accounts in foreign countries … to control corrupt individuals by compensating and corrupting those centrally involved in the scheme to harm GM.”

“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.”

Automotive News provided a comprehensive summary of the matter, outlining claims that Iacobelli’s role continued even after he was convicted of corruption charges and began working with the FBI to bust the union in exchange for a reduced sentence. General Motors claims that the money, which is currently managed by his wife, is hush money to be used to protect high-ranking FCA officials that may have been involved in the plot.

From Automotive News:

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 UAW said it was totally unaware of any allegations regarding illicit off-shore accounts and that the issue was never brought up by the U.S. Attorney’s Office, FBI, or anyone else.

“If GM actually has substantive information supporting its allegations, we ask that they provide it to us so we can take all appropriate actions,” the union said this week. “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.”

[Image: Phil K/Shutterstock]

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  • El scotto El scotto on Aug 04, 2020

    The FBI, or GM with a score to settle. Who do you believe more?

  • Manta9527 Manta9527 on Aug 05, 2020

    I'm getting seriously fed up with GM with regards to these racketeering claims. I think they're just trying to screw up the upcoming PSA-FCA merger. If they're so sure of any wrongdoing on FCA's part, why didn't they provide evidence already?

    • Lorenzo Lorenzo on Aug 05, 2020

      The PSA-FCA merger is the heart of it, no doubt. Stellantis will likely be bigger, dropping GM to a lower rung on the global auto rankings. But there are so many little details involved. There's the GM sale of money-losing Adam Opel to PSA, only to see Carlos Tavares quickly turn it into break even at the least, and more likely to make a profit, something GM couldn't do; there's Ram and Jeep turning GM trucks and off-road vehicles into an also-ran; and there's GM's ace in the hole - the Chinese market - in danger of being ruined by the trade war with China. GM's top management has screwed up on several levels, and it's now dawning on them that they're headed for another bankruptcy, borrowing money to stay afloat during the pandemic with no way to repay it, after cutting so much of their NA market portfolio.

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