Chrysler VP bribes UAW

Feds: Fiat Chrysler VP bribed UAW execs 'to take company friendly positions'

Tresa Baldas and Brent Snavely, Detroit Free Press Published 6:00 a.m. ET Aug. 19, 2017

The intertwined lives of a UAW official and a Fiat Chrysler executive

Over a period of years, former Fiat Chrysler executive Al Iacobelli and former UAW Vice President General Holiefield helped to save Chrysler and then stole millions intended for worker training, authorities say. Wochit

(Photo: Detroit Free Press photos)

It started out as a scandal about personal greed.

Fiat Chrysler and UAW executives, authorities said, were scheming together to line their own pockets.

But the scheme, they now claim, had another goal: Helping the company instead of autoworkers, and bribing union officials to get that done.

In an explosive document filed Friday in the growing Fiat Chrysler-UAW scandal, the government said former Fiat Chrysler Vice President Alphons Iacobelli was bribing union officials to persuade them "to take company-friendly positions."

This new allegation raises the question of whether or not the union's contract and other decisions were influenced by the wrongdoing, potentially undermining the credibility of the contract.

The phrase "company friendly positions," also could relate to how the UAW handled employee grievances, plant specific issues, holiday work and overtime work schedules, training, plant organizational changes and other plant programs.

The government, however, doesn't have to prove that contracts or policies were influenced to convict those charged. It only has to show that auto executives were bribing union officials -- a crime that prosecutors claim Iacobelli pulled off through various financial schemes. One of them, they said, involved giving union officials credit cards to go on shopping sprees whenever they felt like it.

The credit cards, they said,  were issued through the UAW-FCA training center, and paid for everything from designer clothes and $1,000 shoes to a Ferrari and swimming pool.

"Iacobelli said,  'if you see something you want, feel free to buy it. I don't have a problem if you buy it on the charge card,' " prosecutors wrote in a court filing today, adding this was part of a bigger plan to keep senior union officials  "fat, dumb and happy."

The details about Iacobelli's alleged motives surfaced in a new charging document that named a fourth targeted defendant in the case.

Both the UAW and FCA have previously said that the alleged FCA-UAW scam did not affect the contracts.

"It is important for you to know that despite some public commentary to the contrary, the allegations in the indictment in no way call into question the collective bargaining contracts negotiated by our union during this period," UAW President Dennis Williams said last month after the first charges became public.

Said Fiat Chrysler CEO Sergio Marchionne in a letter to employees last month: "This conduct had nothing whatsoever to do with the collective bargaining process."

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Al Iacobelli, former Fiat Chrysler labor chief, right, walks out of the federal courthouse in Detroit on Tuesday, August 1, 2017, with an unidentified woman. (Photo: Romain Blanquart, Detroit Free Press)

Nevertheless, those involved were in positions to influence both contract negotiations and other decisions.

Retired UAW Associate Director Virdell King, the first African-American female to be elected president of a local union in UAW-Chrysler's history, was charged Friday in U.S. District Court today with being part of a conspiracy that involved the theft of more than $4.5 million in autoworker training funds.

King, 65, of Detroit, was a UAW employee who served as a senior offical in the UAW Chrysler Department from 2008 until she retired in 2016.

King was served as a member of the UAW national negotiating committee responsible for the collective bargaining agreements.

King's attorney, John Shea, declined comment.

Iacobelli, as vice president of employee relations for Fiat Chrysler, was the top official in charge of negotiating with the UAW and administering the contract and led contract modifications in 2009 and contract negotiations in 2011.

He was preparing to lead contract negotiations in 2015 until he was fired in June of that year, one month before negotiations were about to start.

Holiefield, as a UAW Vice President in charge of the Chrysler department, also led the UAW’s contract modifications in 2009 and negotiations in 2011.

In 2009, the modifications that Chrysler and the UAW made to their national contract were largely mandated by President Barack Obama's automotive task force. Those changes were made after Chrysler filed for Chapter 11 bankruptcy and agreed too receive a government loan.

In 2011, the UAW picked General Motors as its target in national negotiations and model its four-year contract with Chrysler on the results those discussions.

But Holiefield, who died in March 2015, was a polarizing figure who agreed to some policies that many UAW members strongly opposed.

In 2013, Fiat Chrysler adopted a new work schedule at several plants that called for employees to work four 10-hour days instead of five eight-hour days.

Holiefield brushed off workers concerns about the policy by calling it a "good problem to have." He argued that the the company agreed to hire more workers in return for the UAW agreeing to adopt the new work schedules.

Tresa Baldas can be reached at tbaldas@freepress.com. Follow her on Twitter @Tbaldas.  Contact Brent Snavely: 313-222-6512 or bsnavely@freepress.com. Follow him on Twitter @BrentSnavely.