Convicted Fiat Chrysler exec raises questions about former UAW boss
A Fiat Chrysler Automobiles executive convicted of bribing United Auto Workers officials is threatening to expose new crimes and questioning whether retired union president Dennis Williams received illegal payments.
Former Fiat Chrysler Vice President Alphons Iacobelli leveled the threat in a recent legal filing while questioning whether officials who controlled the UAW-Chrysler National Training Center steered money and benefits to union bosses as part of a broader effort by the Auburn Hills automaker to wring contract concessions from the union.
Iacobelli is questioning whether worker training funds paid for lavish UAW parties, if charities controlled by union bosses received cash and whether more money was used to hire rhythm-and-blues band The O'Jays, best known for the lyric "Money money money money, money," according to the legal filing.
Iacobelli, 59, is battling a civil lawsuit filed by the UAW-Chrysler National Training Center, known as the NTC, a legal fight that is intensifying months after he was convicted in an ongoing investigation of public corruption within the U.S. auto industry.
Training center officials have sued Iacobelli and are trying to recoup more than $2.6 million the disgraced auto executive was accused of stealing and spending on a $365,000 Ferrari, two Montblanc fountain pens that cost $35,700 each, a $544,000 renovation at his Rochester Hills mansion and his wife's $868,736 credit card bill.
The Iacobelli filing serves as a blunt threat to reveal new alleged crimes unless the training center drops the lawsuit, and hints at secrets he shared privately with federal agents while cooperating with the investigation and pursuing a reduction of his 5 1/2-year prison sentence.
"Admit that the NTC has concluded that payments were made by the NTC to and/or for the benefit of Dennis Williams that were not in furtherance of the lawful business activities of the NTC," Iacobelli lawyer Michael Nedelman wrote in a legal filing sent to the training center's attorney.
The ongoing corruption scandal has led to six convictions of Fiat Chrysler and UAW officials, raised questions about the sanctity of labor negotiations and led to a shakeup of the top ranks of the U.S. auto industry.
The new allegations illustrate challenges facing prosecutors who rely on convicted felons with credibility problems while building a case against other targets of an investigation.
“His (criminal) conviction doesn’t help his credibility, but it doesn’t mean you can immediately discount it, either,” said Peter Henning, a Wayne State University law professor and former federal prosecutor. “The government is not going to hang their hat on what he says. They’re going to want corroboration.”
Williams could not be reached for comment. A UAW spokesman did not respond to questions about Williams, who is president emeritus of the union, but criticized Iacobelli.
"...this is a ploy by a man convicted of stealing more than $1 million from that very (national training center) program," UAW spokesman Brian Rothenberg wrote in an email to The News. "Rather than attacking charitable activity, perhaps Mr. Iacobelli should just repay the money he stole.”
Iacobelli isn't the only felon helping investigators. Several people convicted in the corruption scandal, including former UAW officials Virdell King and Nancy Adams Johnson, are cooperating with an ongoing investigation that has spread to UAW training centers jointly run with General Motors Co. and Ford Motor Co.
The Iacobelli filing attempts to spread blame for the corruption scandal and questions why the training center has not sued Williams and others to recoup alleged payments.
The filing also questions whether training center officials committed tax crimes amid a culture of nepotism within the UAW's top ranks. In the criminal investigation, prosecutors have said Fiat Chrysler executives let UAW leaders hire relatives and friends for no-show jobs at the training center.
Training center lawyers are trying to block Iacobelli's attempt to have officials testify under oath about financial dealings and alleged payments. The lines of inquiry are irrelevant, inflammatory and designed to harass the training center and Williams, the center's attorney Michelle Harrell wrote in a court filing.
They also want a judge to quash more than 200 requests for information about the training center and alleged criminal activity.
"This case deals with the insatiable desire for excessive wealth by certain individuals, including ... Alphons Iacobelli and his wife...and their scheme to get rich by stealing from (the training center)," Harrell wrote.
Federal prosecutors have labeled the training center, Fiat Chrysler and the UAW as unindicted co-conspirators, an allegation at odds with claims by the labor union and automaker that they were victimized by rogue employees.
'A massive conspiracy'
Prosecutors are fighting attempts by training center officials to obtain restitution from Iacobelli.
"(The training center) sits at the epicenter of a massive conspiracy to corrupt the labor management process, as the conduit of choice for illegal payments between its parents, Fiat Chrysler Automobiles...and the UAW," Assistant U.S. Attorney Erin Shaw wrote in a federal court filing.
“The (training center) illegally helped (Fiat Chrysler) do indirectly something that (Fiat Chrysler) could not do directly — provide money and things of value to union officials," Shaw added in a separate filing.
In the civil lawsuit, Iacobelli asked training center officials to "admit that all of the alleged payments made by the (national training center) to and/or for the benefit of Dennis Williams were not lawfully permitted..."
The filing lumps Williams in with four others with ties to the UAW who received payments from the automaker during the scandal. They include the late UAW Vice President General Holiefield, widow Monica Morgan-Holiefield, his right-hand man Keith Mickens and King.
Iacobelli also wants training center officials to admit the payments were authorized by the facility's directors.
The training center is funded by Fiat Chrysler and overseen by a board split between officials from the Auburn Hills automaker and the UAW. Six former training center leaders have been convicted and sentenced to prison.
The alleged payments, though not itemized in the legal filing, had a clear purpose, Iacobelli's lawyer alleged.
Nedelman asked training center officials to admit the payments were "an effort to obtain concessions for (Fiat Chrysler)...," according to the filing.
The filing marks the latest time Williams has been linked to the corruption scandal.
Eight months ago, prosecutors alleged Williams directed subordinates to use funds from Detroit’s automakers, funneled through training centers, to pay for union travel, meals and entertainment. Williams has not been charged with wrongdoing.
Williams retired amidst the corruption investigation last summer. He moved to the UAW's resort in northern Michigan, where the UAW is using nonunion labor to build a lakefront home for him while FBI agents question union leaders' spending of membership dues and money from Detroit's automakers on personal luxuries.
The UAW spent $33,316 last year on housing for Williams at the union's resort, according to the UAW's annual filing Friday. By comparison, the union spent $2,874 providing housing for former President Bob King.
In the civil lawsuit, Iacobelli's lawyer questions whether training center officials maintained an account to pay for benefits that flowed to union executives.
He asked training center officials to admit money was held in the account for "making payments to and providing things of value to UAW officers, UAW employees and others within the scope of UAW leadership...in an effort to obtain benefits, concessions and advantages for (Fiat Chrysler)...," according to the filing.
The payments and benefits are not described.
Iacobelli's lawyer wants to depose a training center official about contributions made to charities created or associated with members of the training center's board, whose co-president is UAW Vice President Cindy Estrada.
In the civil lawsuit, Iacobelli's lawyer questions why the training center "has not filed suit against entities organized by and/or associated with Dennis Williams, Nancy Johnson, Virdell King, Keith Mickens, (former UAW Vice President) Norwood Jewell, Cindy Estrada" and others "to recover the alleged benefit of payments..."
Estrada did not respond to a message seeking comment.
Federal investigators have been interested in Estrada and Joe Ashton, a retired UAW vice president who headed the union's GM department.
That branch of the investigation has focused on whether training funds were misappropriated, and if labor leaders at GM and Ford received money or benefits through their tax-exempt nonprofits.
Like Ashton, Williams and other high-ranking UAW leaders, Estrada has a personal charity. She chairs the Cynthia Estrada Charity Fund, a nonprofit that has received almost $1.4 million in recent years, according to tax filings that do not reveal donors.
Estrada leads the union's Fiat Chrysler Department and was preceded by Jewell. Jewell operated a separate charity, Making Our Children Smile.
The witness list
UAW President Gary Jones, who was elected last year, has instituted a ban preventing union leaders from soliciting charitable contributions from employers, vendors or training centers.
“UAW charities have been efforts to provide assistance for members, the public and communities for decades," Rothenberg, the union spokesman, wrote in an email to The News on Wednesday.
On March 18, federal prosecutors charged Jewell with conspiring to violate federal labor laws. He is expected to plead guilty Tuesday and could spend as much as five years in federal prison.
Jewell and Williams are among more than 180 people on Iacobelli's witness list.
The witness list reveals Iacobelli knows about secretive, loosely regulated accounts controlled by labor leaders that are being investigated by federal agents. The News reported March 21 that agents are investigating whether senior UAW staff were forced to contribute money to funds originally established to buy flowers for auto workers' funerals, and whether union executives pocketed the cash.
Iacobelli's witness list references several so-called flower funds, including the Diamond Fund, which was controlled by Jewell until his surprise retirement last year.
Iacobelli also wants to question witnesses who could shed light on the training center's travel and entertainment expenses in Palm Springs, California, and Las Vegas.
The News previously revealed federal investigators are questioning UAW officials' use of almost $1 million of membership dues on condominiums, liquor, food and golf in Palm Springs, where Jones held annual conferences before becoming president.
Iacobelli's witness list includes representatives of the O'Jays entertainment company. The list does not explain the focus on the O'Jays, but a source familiar with the investigation said federal agents were inquiring whether the training center hired the famed R&B band.