Feds: FCA spent $15K on steak dinners for UAW
Detroit — Senior United Auto Workers leaders launched 2015 UAW contract negotiations with an $8,494 meal at a Detroit steakhouse paid for by Fiat Chrysler Automobiles, according to a new federal court filing.
And once negotiations with Fiat Chrysler appeared to be wrapped, officials book-ended the talks with a second lavish meal paid for by the carmaker at the same restaurant.
After UAW leaders ate, drank and smoked $15,000 worth of filet, liquor and cigars for the two meals paid for by the rival across the negotiating table, rank-and-file union members at Fiat Chrysler voted down the proposed contract.
Federal officials say the meals are examples of corruption surrounding the 2015 Fiat Chrysler-UAW contract negotiations.
U.S. District Attorneys David Gardey and Erin Shaw wrote in a court filing that spending on meals such as those at the London Chop House in downtown Detroit corrupted the bargaining process, and the "freebies" and "lavish entertainment" UAW officials allowed Fiat Chrysler to pay for were "the rule rather than the exception."
The UAW officials violated the Labor Management Relations Act of 1947 when they let the automaker pay for those meals, the attorneys wrote.
The details emerged as the UAW and Detroit automakers are poised to negotiate new contracts next year at a time when both General Motors Co. and Ford Motor Co. are pruning excess white-collar workers, and GM is signaling the possibility of closing U.S. plants.
Prosecutors leveled the allegations Wednesday while urging a judge to sentence one of those high-ranking UAW leaders to federal prison for one year. That official, Nancy Adams Johnson, has emerged as a pivotal participant and witness to a years-long conspiracy involving Fiat Chrysler and the UAW, and she has linked former union President Dennis Williams to the scandal.
UAW spokesman Brian Rothenberg said in a statement that the UAW confronted Johnson when they found out she "had stolen thousands of dollars" from the union's National Training Center.
"The UAW also provided information about Ms. Johnson’s illegal conduct to the federal prosecutors at that time," Rothenberg said. "The money Ms. Johnson stole and misused belonged to the NTC, not to Chrysler — and the NTC has filed papers with the Judge in Ms. Johnson’s case seeking to recover the money she stole from it. The UAW is confident that Ms. Johnson’s misconduct had no effect on the collective bargaining agreement between the UAW and Chrysler – which has numerous checks and balances and requires a vote by the entire membership, among other things."
Fiat Chrysler did not immediately respond to request for comment.
No Fiat Chrysler officials were present for either meal, according to court documents filed Wednesday in U.S. District Court, and the meal had "nothing to do with the National Training Center." The UAW had used a National Training Center credit card to pay for the two meals.
"These corrosive and poisoning circumstances are exactly what the Taft-Hartley Act (Labor Management Relations Act of 1947) was intended to avoid," Assistant U.S. Attorney David Gardey wrote in the court filing.
"Over 45,000 hourly employees for FCA were represented by the UAW during the period of the conspiracy. These men and women believed that their union leaders were looking out for their best interests and negotiating in good faith, not double dealing them for personal gain."
Adams Johnson was the UAW's No. 2 official in the union's Fiat Chrysler department, serving as the top administrative assistant to UAW Vice President Norwood Jewell.
Jewell tapped a training fund to pay for more than $10,000 worth of golf resort accommodations in Palm Springs, California, and Disney World tickets, a spending spree that is the focus of the ongoing investigation, sources told The Detroit News.
In July, Adams Johnson entered a guilty plea, telling U.S. District Judge Paul Borman she violated a federal law prohibiting labor officials from receiving cash and valuable items from employers. In this case, she received tens of thousands of dollars in illegal payments and benefits from Fiat Chrysler during the conspiracy, including $1,100 designer shoes, first-class flights to California, resort stays and limousine rides, according to federal prosecutors.
Adams Johnson was the seventh person to plead guilty in the widening scandal.
She could be sentenced to as much as 18 months in prison for her role in a widening corruption scandal involving Fiat Chrysler Automobiles and its contract negotiations with the UAW, according to the filing. Johnson's lawyer, Harold Gurewitz, is requesting a lighter "non-custodial" sentence that is not "greater than necessary."
Adams Johnson, 58, at the direction of more senior UAW officials "directed tens of thousands of dollars of prohibited payments from Fiat Chrysler for the personal benefit of those senior UAW officials and for the personal benefit of other UAW officials," according to Wednesday's sentencing memorandum.
Gardey writes that Johnson betrayed thousands of UAW members and their families through her actions in 2015, and the "court needs to deter other union officials from engaging in similar misconduct."
Gardey also requested Johnson's sentence be delayed six months so that she could continue to cooperate in the ongoing federal investigation into the 2015 UAW contract negotiations federal prosecutors have said Fiat Chrysler and the UAW conspired to corrupt.
Staff writer Rob Snell contributed.