Former Fiat Chrysler US exec indicted in union payoff scheme

A Chrysler Warren Truck Assembly sign in front of the Fiat Chrysler Automobiles (FCA) plant in Warren, Michigan October 7, 2015. — Reuters pic
A Chrysler Warren Truck Assembly sign in front of the Fiat Chrysler Automobiles (FCA) plant in Warren, Michigan October 7, 2015. — Reuters pic

DETROIT, July 27 — A Detroit grand jury yesterday indicted a former Fiat Chrysler executive in charge of negotiating US labor agreements, charging him with raiding a workers’ training fund to benefit himself and union officers.

Alphons Iacobelli, an executive at FCA US, the American arm of the car giant, was in charge of negotiating and administering collective bargaining agreements with the United Auto Workers union, which represents Fiat Chrysler workers. 

Prosecutors charged that he hid more than US$1.2 million (RM5.139 million) in illegal payments and gifts to UAW officers over a five-year period ending in 2014 -- using funds from a separate entity set up to provide FCA workers with education and retraining. 

Monica Morgan, the wife of former UAW vice president General Holiefield, who was Iacobelli’s counterpart at the union until he died in 2015, was also charged in connection with the alleged conspiracy. 

The indictment alleges that Iacobelli made improper payments and gifts, including designer clothing, jewelry, furniture, and paid off a US$262,219 mortgage on Holiefield and Morgan’s residence, according to a statement by the US Justice Department. 

“Today’s indictment exposes a disturbing criminal collaboration that was ongoing for years between high ranking officials of FCA and the UAW,” said David Gelios of the FBI’s Detroit office. He questioned “the integrity of contracts negotiated during the course of this criminal conspiracy.” 

The UAW last ratified a four-year contract with Fiat Chrysler in 2015, after the alleged scheme ended, winning pay raises and effectively eliminating a two-tier wage system by 2019. 

The alleged conspiracy started in 2009, the same year Fiat took control of bankrupt Chrysler. 

The illegal payments were funneled through the UAW-Chrysler National Training Center in Detroit, from which Iacobelli also diverted more than US$1 million for his own use, including purchasing a Ferrari and leasing a private jet, prosecutors said. 

“FCA US and the UAW were the victims of malfeasance by certain of their respective employees,” the company said in a statement, adding that it fired Iacobelli and another worker, Jerome Durden, when it learned of their actions in 2015. 

Durden, a former FCA US financial analyst in the accounting department, was also charged. 

In an open letter to members, UAW president Dennis Williams said he was appalled by the alleged conduct.

“The current UAW leadership had absolutely no knowledge of the alleged fraudulent activities detailed by this indictment until they were brought to our attention by the government,” he said. — AFP

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