FCA workers suing for ‘hundreds of millions’ amid probe

Ian Thibodeau

Three Fiat Chrysler Automobiles NV employees have filed a proposed class-action lawsuit against the company and the United Auto Workers amid federal accusations that FCA officials paid off UAW officers during union contract negotiations.

The plaintiffs allege on behalf of other dues-paying UAW members employed by FCA that “potentially hundreds of millions of dollars of their dues paid to the UAW for the purposes of good-faith negotiations have instead been spent on tainted and/or illegal collective bargaining negotiations” by former FCA labor negotiator Alphons Iacobelli and other former UAW leadership and FCA officials.

The plaintiffs — on behalf of UAW members who were FCA employees during the “conspiracy period” — want to be paid back for all union dues paid from roughly 2009 to 2015, according to court documents, when the $4.5 million corruption scandal involving Detroit’s No. 3 automaker is believed to have taken place. A judge will have to certify the case as class-action for it to move forward in court.

Raymond Sterling, a Bloomfield Hills attorney representing the plaintiffs, said the damages sought total “hundreds of millions of dollars.” The final number will depend on what prosecutors are able to determine was the extent of the conspiracy

There were “bribes and collusion going on,” Sterling said. “It’s usually for a reason, and our clients are the victims of that reason.

“Everyone paid dues, but no one knew what was going on. We know (now) it went on for years. ”

The lawsuit was filed less than a week after new accusations surfaced in a plea agreement with Iacobelli, though Sterling says he and his clients have been “watching” the case prior to the new information that surfaced in the Jan. 22 plea.

Federal prosecutors said in the agreement that FCA officials paid more than $1.5 million to UAW officials and employees to sway union negotiations.

The plea also suggested corruption was more widespread than previously disclosed. Four people have been formerly charged in the investigation.

The plaintiffs base their claims on a sworn statement from Iacobelli. He outlined there how he and unnamed FCA officials “unlawfully paid and delivered more than $1.5 million in prohibited payments and things of value” to late UAW Vice President General Holiefield, his wife Monica Morgan-Holiefield (who is expected to enter a guilty plea to unspecified federal charges on Feb. 6) and other UAW officials.

Plaintiffs also cite a sworn statement from former UAW official Virdell King, who admitted misusing funds that were intended to train and retrain blue-collar workers. She faces up to 16 months in prison and is expected to cooperate with the investigation.

The proposed class-action lawsuit was filed Friday, the day UAW President Dennis Williams defended the sanctity of the union’s bargaining process in a fiery letter to union members, in which he called Iacobelli a “crook and a liar.”

A UAW spokesman on Monday declined to comment on the lawsuit, referring instead to Williams’ Friday letter.

Williams wrote several times that the “betrayal” of Iacobelli and Holiefield did not compromise the collective bargaining agreement or impact union funds.

Williams wrote in the Friday letter that the corruption was self-serving and designed to funnel “millions of dollars” directly into Iacobelli’s pockets. He wrote 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.

Williams’ letter came four days after Iacobelli’s plea agreement.

He also said that a series of $50,000 payments, which Iacobelli says were offered as retirement packages to select senior UAW officials, were rejected after review by UAW legal counsel at the time.


Twitter: @Ian_Thibodeau

Detroit News auto writer Nora Naughton contributed