FCA-UAW scandal nears new potential target
Detroit – A former United Auto Workers official is under investigation and a potential target of the FBI probe into a multimillion-dollar conspiracy within the top ranks of Fiat Chrysler Automobiles NV and the union, The Detroit News has learned.
Retired UAW Associate Director Virdell King has hired a criminal defense lawyer amid questions about personal purchases made through a UAW-Chrysler National Training Center credit-card account, according to two sources familiar with the investigation. The training center funds are supposed to benefit blue-collar workers.
The focus on King provides a partial roadmap of additional people who could be charged in a high-profile criminal case that alleges FCA and union leaders spent more than $1.2 million on luxury items instead of using the money to benefit training of Fiat Chrysler hourly workers. The indictment references, but does not identify, a handful of other union and automaker officials accused of participating in a scheme to pay off UAW officials.
King, 65, was part of the UAW-Chrysler bargaining teams in both 2011 and 2015. She spent years on the training center’s board along with Alphons Iacobelli, 57, of Rochester Hills, a former top labor negotiator at Fiat Chrysler who was indicted last week and accused of pocketing employee training funds to pay for a $350,000 Ferrari 458 Spider, two solid-gold Mont Blanc pens that cost $37,500 each, a swimming pool and more.
King’s lawyer, John Shea, declined comment.
The UAW would not comment Monday, citing the ongoing investigation.
Three people have been charged so far in an indictment, including Monica Morgan-Holiefield, 54, wife of the late General Holiefield, a UAW vice president who died in March 2015. She was released on $10,000 unsecured bond Monday after being arraigned on charges that could send her to federal prison for five years.
Morgan-Holiefield’s arraignment came less than a week after she was indicted and accused of participating in a multi-year enrichment scheme that allegedly included paying off her $262,000 mortgage and $30,000 in airline tickets to cities across the U.S. using money that was supposed to benefit blue-collar FCA workers.
The Harrison Township resident was joined by two friends Monday who defended her character.
“She is not the gold-digger they are making her out to be,” friend Alecia Goodlow-Young said outside court. “She is an ambitious woman but that doesn’t mean a negative ambitious woman.
“It’s not right to put this all on her,” Goodlow-Young told reporters. “They’re attacking her character.”
Jerome Durden, 61, of Rochester was charged separately last week with conspiracy to defraud the U.S. He was a financial analyst with Fiat Chrysler’s corporate accounting department and from 2008 through 2015 was controller of the UAW-Chrysler National Training Center. Durden is to be in court Friday.
Iacobelli will appear in court Tuesday.
King began her UAW career at Chrysler’s Detroit Axle Plant in 1974, and 13 years later was elected recording secretary for UAW Local 961, according to an article published by UAW-Chrysler. She was elected president of that local union, becoming then the first black female to be elected as president of a local union in the then UAW-DaimlerChrysler organization. In 1999, she was appointed to the UAW’s international staff, according to the article.
In August 2013, King, then a UAW assistant director, rode in the passenger seat of a 2014 Jeep Grand Cherokee as part of a celebration of the 5 millionth vehicle to be produced at Chrysler’s Jefferson North Assembly Plant. She touted the milestone and thanked CEO Sergio Marchionne “for believing in us.”
King’s compensation in 2015, the year before she retired, was $128,930.
In spring 2015, King was associate co-director of the UAW-Chrysler National Training Center and was part of the center’s joint activities board. By December that year, she was no longer on the center’s joint activities board, according to UAW-Chrysler documents.
The training center’s joint activities board is governed by eight members from the union and Fiat Chrysler. The UAW and Fiat Chrysler said last week that they worked together with the training center to implement new internal controls. They include things such as hiring a full-time controller; banning any charitable donation from the center to any charity run or controlled by a UAW official; new vendor and credit-card processes and policies; having budgets approved by the training center board or directors; and creating a hotline to report suspected wrongdoing.
The nonprofit UAW Chrysler National Training Center, otherwise known as the UAW Chrysler Skill Development and Training Program, was created in 1985. Its mission is to provide training and boost worker skills and to create a “world-class workforce.”
The center is funded through Fiat Chrysler money. The last Internal Revenue Service 990 filing for the center dated in May 2015 shows contributions and grants for the 2014 fiscal year totaled $46.7 million; expenses totaled $28.9 million. It had a fund balance of nearly $58 million then.
The UAW says officials have instituted a new credit-card policy requiring two officers and the controller to review credit-card statements and payments, and have created a written credit-card policy that includes “what is/is not permissible.”
Michelle Krebs, senior analyst with Autotrader, said the alleged bribery scandal could hurt the reputations of Fiat Chrysler and the UAW.
“The UAW has the greatest risk in this in terms of tarnishing its reputation,” she said, adding some people in the U.S. have negative attitudes already about unions and the UAW. “It comes at a time when the union is trying to expand its membership and organize some plants owned by foreign automakers. This kind of activity does not help its cause at all.”