Automaker FCA US admits paying off union leaders; fined US$30M

Thursday, 19 August 2021

Fiat Chrysler Automobiles, now a part of the Stellantis group, has been fined US$30 million after it admitted bribing union officials.

A federal judge fined FCA US$30 million this week after the automaker admitted that it paid off United Auto Workers leaders to try to win concessions in negotiations covering thousands of factory workers.

U.S. District Court Judge Paul Borman also sentenced FCA US to three years’ probation and ordered an independent compliance monitor.

FCA stands for Fiat Chrysler Automobiles, which now is part of Stellantis, a company created by the merger of Fiat Chrysler and PSA Peugeot.

The automaker pleaded guilty in March to conspiracy. Its conviction follows a series of guilty pleas from UAW officials who were showered with more than US$3.5 million in cash and items of value from a jointly run training centre over an eight-year period.

“There is a need for this sentence imposed to reflect the seriousness of the offence, promote respect for the law and provide just-punishment for the offence to adequately deter criminal conduct from any other corporations or executives of corporations considering such criminality,” Borman said.

FCA’s head of labour relations Al Iacobelli was sentenced to 5 ½ years in prison as a result of the bribery scandal.

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The head of FCA labour relations, Al Iacobelli, executed the scheme with five UAW officials and a spouse, especially General Holiefield, who was a union vice president. He eliminated a US$262,000 home mortgage in 2014 with training centre money.

Union officials used credit cards for spending sprees.

Iacobelli was sentenced to 5 1/2 years in prison in 2018, but the sentence later was reduced by 18 months due to his cooperation. Holiefield died in 2015; his wife later pleaded guilty to a tax crime.

Holiefield’s successor, Norwood Jewell, was sentenced to 15 months in prison. His plea deal listed US$60,000 in meals and golf paid with training centre credit cards.

The government’s investigation became public in 2017, but agents soon were uncovering other corruption at the UAW. Union dues were used to pay for golf, booze and holiday villas in California, and contractors were giving kickbacks for union business.

Eleven officials have been convicted, including former presidents Gary Jones and Dennis Williams.

The training centre was created in the 1980s to train workers and ensure their health and safety is covered, Assistant U.S. Attorney Erin Shaw told the court Tuesday in a statement.

“But over time, the training centre’s benevolent purpose was usurped by a corrupt one,” she said. “The training centre served as a conduit for many of the illegal payments at issue in this case.”