Detroit — Federal agents have expanded a corruption investigation to include a member of General Motors Co.’s board and the United Auto Workers training centers funded by all three Detroit automakers, The Detroit News has learned.
Spurred by corruption charges filed against a former Fiat Chrysler Automobiles NV labor executive and the wife of a deceased union vice president, investigators have issued subpoenas in recent weeks for information about training centers financed by GM and Ford Motor Co. that are operated jointly with the union, sources familiar with the investigation said.
Investigators are interested in Joe Ashton, a retired UAW vice president appointed to GM’s board in 2014, and Cindy Estrada, his successor in charge of the union’s GM department, according to sources familiar with the investigation. Ashton, 69, of Ocean View, N.J., is the highest-ranking official whose name has surfaced in connection with a criminal investigation into whether money and illegal benefits corrupted the bargaining process.
Neither Ashton nor Estrada returned calls from The News. The investigation focuses on whether training funds were misappropriated, and if labor leaders at GM and Ford received money or benefits through their tax-exempt nonprofits — an allegation that emerged this summer involving Fiat Chrysler and General Holiefield, a former UAW vice president who died in 2015, sources said.
“If the companies are buying labor peace by corrupting union leadership, that has to be a significant concern,” said Peter Henning, a Wayne State University law professor and former federal prosecutor. “This sends a message that union leaders are just in it for themselves. This can rile up members and lead to an insurgency.”
New details about the corruption investigation emerged Wednesday, four months after former Fiat Chrysler labor negotiator Alphons Iacobelli and Holiefield’s widow, Monica Morgan-Holiefield, were indicted and accused of violating the Labor Management Relations Act. They are accused of participating in a $4.5 million scheme that siphoned corporate training funds earmarked for blue-collar workers.
The expanded investigation appears to be focused at this point on the joint training centers, sources confirmed, not the automakers themselves. Ford was notified in recent weeks of the investigation into the Dearborn automaker’s joint training center in downtown Detroit.
“We are cooperating with the inquiry,” Ford said in a statement. “We are confident in the UAW-Ford National Programs Center leadership team and the policies and procedures used to govern the program operations ... .”
Federal prosecutors contacted GM within the last month and the automaker has launched an internal investigation. “We are fully cooperating with the investigation,” a GM spokesman said in a statement provided to The News.
The probe is the second criminal investigation involving GM in recent years. Under a so-called “deferred prosecution agreement,” the automaker is still under federal oversight following a scandal involving faulty ignition switches that have been linked to almost 400 deaths and injuries.
“(GM) will bend over backwards — more than backwards, if that is possible — to cooperate” with prosecutors, Henning said. “Nobody wants to bust the agreement.”
The UAW and FBI declined comment Wednesday.
The expanded corruption investigation, and the Iacobelli indictment, offer insight into the UAW’s top ranks and its culture of six-figure paychecks, liberal expense accounts and personal charities that, in at least one case, served as a conduit for a union leader to pocket more than $1 million in illegal benefits, according to court records.
UAW President Dennis Williams has vice presidents assigned to GM, Ford and Fiat Chrysler. Each handles contract negotiations with the respective automakers, helps run training centers for blue-collar workers and oversees charities that, in most cases, have received more than $1 million in contributions in recent years.
■Estrada, 49, of Whitmore Lake. She is a trailblazing labor negotiator assigned to GM and the first Latina elected as an international labor officer. She succeeded Ashton in 2014 and is co-president of the UAW-GM Center for Human Resources, which has almost $78 million in assets.
She also chairs the Cynthia Estrada Charity Fund. The nonprofit has received almost $1.4 million in the last five years, according to tax filings that do not reveal donors.
■Vice President Jimmy Settles, 67, of Detroit is assigned to Ford and is co-president of the joint training center, the UAW-Ford National Programs Center. The center, funded by Ford, has more than $27 million in assets, according to its most recent tax filing.
He also is president of JUST, a Detroit-based nonprofit that has received almost $1.3 million in recent years. Donors are not identified in tax filings.
■Vice President Norwood Jewell, 60, of Davison is assigned to handle Fiat Chrysler negotiations and is co-chairman of the UAW-Chrysler National Training Center. The center, funded by Fiat Chrysler, has $58 million in assets.
Jewell is president of the Making Our Children Smile nonprofit, which has received more than $629,000 in the last three years, though donors are not identified in tax filings.
Shane Dawes, listed as the assistant director of the UAW-Chrysler Training Center, was secretary and treasurer of Jewell’s nonprofit, according to the 2016 tax filing.
The nonprofit group’s former vice president, Nancy Johnson, was Jewell’s top administrative assistant until 2015. Johnson also served on the UAW-Chrysler National Training Center board.
Johnson has drawn scrutiny from federal agents investigating corruption at the training center. Former UAW official Virdell King used a training center credit card to buy a $2,180 shotgun for Jewell as a birthday present. King, who has struck a plea deal with prosecutors, was told to buy the firearm by Johnson, two sources have told The News.
Ashton, meanwhile, is one of GM’s 10 outside directors. He’s also associated with the Ashton Fund, a nonprofit that has received $1.3 million in the last six years. Donors are not identified in tax filings.
A former head of the UAW’s GM department from 2010 to 2014, Ashton was named to GM’s board of directors after his retirement from the union. He was nominated to represent the UAW Retiree Medical Benefits Trust, which owned 9.3 percent of the automaker’s outstanding shares as of March 15, according to GM’s latest proxy statement.
Nonprofits linked to UAW vice presidents often are overseen by boards that include UAW officials. Garry Bernath, a board member of the UAW-GM Training Center, has served as treasurer of Ashton’s nonprofit. UAW-GM Training Center board members Patti Bieber, Mike Grimes and Kris Owen all served as officers of Estrada’s nonprofit, according to tax filings.
“The charities are the big issue. There is so much misuse of funds in the international and major locals,” said Patricia Meyer, an outspoken UAW critic. “Why are they having the charities?”
A nonprofit controlled by General Holiefield factors prominently into the indictment of Iacobelli and Morgan-Holiefield. Holiefield’s nonprofit Leave the Light On Foundation was used to help hide more than $1.2 million in payments to Holiefield, prosecutors allege.
According to the indictment, the payments included designer clothing, jewelry, furniture and $262,219 to pay off a mortgage on the Holiefields’ home. The payments were made by using the UAW-Chrysler training center’s credit cards and bank accounts.
“The government is looking at whether a cozy arrangement went much further and became theft of labor funds,” Henning said. “There is a concern that a slush fund has been created.”
After Iacobelli was indicted in July, the UAW changed its policies and banned its training center from contributing money to charities union officials control.
The indictment alleges Iacobelli and other UAW-Chrysler training center officials created a liberal spending policy to keep senior UAW leaders “fat, dumb and happy.”
Iacobelli, 58, siphoned more than $1 million in training center funds and spent the money on a $365,000 Ferrari, two $35,700 fountain pens, a pool, outdoor kitchen and spa at his Rochester Hills mansion, according to the indictment.
Holiefield and his wife received more than $1.2 million, prosecutors allege. Jewell, meanwhile, succeeded Holiefield atop the training center board and received a $2,180 shotgun purchased with union training center funds. He later reimbursed the company for the firearm.
The federal investigation dates at least to 2015 and involves FBI, Internal Revenue Service and Labor Department agents.
Iacobelli was a labor negotiator at Fiat Chrysler but abruptly retired in June 2015 a month before negotiations with the UAW were to begin and amid the FBI investigation. In July, Fiat Chrysler said it fired Iacobelli after it learned of the investigation.
Months later, Iacobelli was hired by GM as executive director of labor relations and was involved in negotiations for GM with the Canadian auto workers union, Unifor.
Investigators also are interested in the circumstances surrounding the abrupt departure of Rex Blackwell, GM’s top labor negotiator, in June 2015, The News has learned.
Blackwell retired June 1, one month before Detroit automakers launched critical contract negotiations with the UAW. Blackwell, who previously served on the UAW-GM training center board, retired eight days before Iacobelli, his counterpart at Fiat Chrysler, was fired.
The timing of Blackwell and Iacobelli’s departures drew headlines at the time considering the significance of upcoming contract negotiations. The 2015 contract was the first since GM and Chrysler emerged from post-bankruptcy restrictions.