UAW chief: Labor bargaining not tainted by corruption

Nora Naughton
The Detroit News

The president of the United Auto Workers is defending the sanctity of the union’s bargaining process four days after former Fiat Chrysler Automobiles NV labor negotiator Alphons Iacobelli’s plea agreement showed that officials paid more than $1.5 million to UAW officers and employees to sway contract negotiations.

UAW President Dennis Williams

“Let me speak clearly. Al Iacobelli by his own admission is a crook and a liar,” UAW President Dennis Williams wrote in a letter to union members Friday. “While Mr. Iacobelli will have to answer for his criminal conduct, it appears that in an attempt to get lenient treatment from the government he is now falsely spinning his crimes as an effort to corrupt the collective bargaining process between the UAW and Fiat Chrysler. In reality, it is plain as day that his motivation was nothing more than outright greed.”

Iacobelli, 58, pleaded guilty Monday to one count of conspiracy to violate the Labor Management Relations Act, and one count of subscribing a false tax return. The two charges carry a maximum sentence of eight years in prison. Iacobelli could also be ordered to pay more than $835,000 in restitution fees. He will be sentenced in Detroit on May 29.

The former FCA labor negotiator was charged with criminal corruption connected to the Fiat Chrysler-UAW joint training center. But his plea deal suggests the corruption was more widespread than previously disclosed — lasting for years as Fiat Chrysler officials granted UAW labor leaders cash payments and luxury items, including airfare, jewelry and secret $50,000 payments.

Court records also show the relationship involved illegal payments spent on a Ferrari, gold Montblanc fountain pens and a custom-made Italian watch.

In his letter, Williams refutes the $50,000 payments, which Iacobelli says were offered as retirement packages to select senior UAW officials: “What Iacobelli’s plea agreement fails to disclose is that these proposed retirement payments were reviewed by UAW legal counsel,” the union president wrote, “immediately rejected by me and never paid to anyone.”

Iacobelli’s lawyer, David DuMouchel, declined comment Friday. The U.S. attorney’s office in Detroit did not immediately respond.

The conspiracy dates back to September 2009, three months after Chrysler exited bankruptcy and joined forces with Fiat SpA. It was then that Iacobelli told other Fiat Chrysler executives, including former FCA financial analyst Jerome Durden, to shift from cost-cutting to spending at the training center.

Alphons Iacobelli

One of the first expenses Iacobelli identified in his plea agreement was a $50,000 payment to a nonprofit run by the late General Holiefield, head of the union’s FCA department. It’s one of several made over the next few years as part of a conspiracy “to obtain benefits, concessions and advantages for FCA in the negotiation, implementation and administration of the collective bargaining agreements between FCA and the UAW,” prosecutors allege.

The accusations made Monday in Iacobelli’s plea agreement say for the first time in the investigation that FCA executives’ actions were intended to sway UAW contract negotiations in favor of the Italian-American automaker. But Williams insists in his letter that union funds were neither stolen nor compromised by the actions of Iacobelli, Holiefield or any other conspirators.

Monica Morgan-Holiefield, the widow of General Holiefield, is expected to enter a guilty plea on Feb. 6 to unspecified federal charges. Iacobelli will have to cooperate with investigators as part of his plea deal, but it’s still unclear whether he has named any other FCA officials.

FCA CEO Sergio Marchionne has been questioned by investigators amid the widening investigation and sought legal representation by white-collar criminal defense lawyer William Jeffress of the Washington-based law firm Baker Botts.

“The fact that Mr. Holiefield and others allowed themselves to be corrupted by Mr. Iacobelli was and is a terrible betrayal of our union’s trust. But there is simply no truth to the claim that this misconduct compromised the negotiation of our collective bargaining agreement or had any impact on union funds,” Williams wrote.

“As I have discussed before, General Holiefield did not single-handedly control the collective bargaining agreement. That collective bargaining agreement passed through many hands, and its terms were reviewed, negotiated and approved at the highest level of our union, including the UAW president and ultimately the membership.”

Williams says the corruption was self-serving and designed to funnel “millions of dollars” directly into Iacobelli’s pockets, and that the 2011 agreement that Iacobelli says was influenced by his actions was patterned after other UAW agreements with Ford Motor Co. and General Motors Co.

“Mr. Iacobelli’s case is one of personal greed, plain and simple. Iacobelli stole money because he’s a thief who wanted to live a lavish lifestyle well beyond his means. And he corrupted a few UAW officials because he needed their silence to protect his own crimes,” Williams wrote. “Those were terrible acts on all sides. But the fact is those people’s misdeeds did not affect your collective bargaining agreement and no union funds were stolen or lost.”

Iacobelli’s plea deals come as federal agents have expanded the corruption investigation to include a former member of General Motors Co.’s board of directors, as well as UAW training centers funded by all three Detroit automakers. Two others have struck plea deals amid the investigation, including Durden and former UAW official Virdell King.

Robert Snell of The Detroit News contributed.