Judge: FCA employees aren't entitled to restitution in bribery scandal

Breana Noble
The Detroit News

A federal judge on Monday ruled employees of the maker of Jeep and Ram vehicles are not entitled to restitution following a years-long bribery scandal involving the United Auto Workers.

Judge Paul Borman of the Eastern District of Michigan concluded the 234 current and former employees petitioning the court were not directly harmed by Fiat Chrysler Automobiles NV executives paying $3.5 million in bribes to union leaders over a period of time that included rounds of labor negotiations. The decision upholds the January settlement between the Italian-American automaker, which is now a part of Stellantis NV, and the U.S. government.

"The Court concludes that the Civil Plaintiffs were not directly and proximately harmed by the specific offense of conviction," Borman wrote in his decision. "The Court concludes that Civil Plaintiffs are not crime victims entitled to restitution."

FCA in March pleaded guilty to one count of conspiracy to violate the Labor Management Relations Act. It agreed to pay the government $30 million and to appoint an independent monitor for three years to oversee the dissolution of a joint training center FCA operated with the UAW and used to funnel money to union leaders.

The six-year federal investigation into union corruption led to the convictions of three former FCA executives, including labor relations chief Alphons Iacobelli, and 12 others. The pattern of illegal payments included paying off former UAW Vice President General Holiefield's $262,000 mortgage, bankrolling a $25,000 booze-fueled bash for another labor leader and financing a $30,000 junket for UAW officials in southern California. The payments were designed to secure concessions, and advantages for Fiat Chrysler during contract negotiations, the government previously stated.

The settlement did not include restitution for the automaker's employees. The employees wanted the court to order the government to provide evidence and investigate their claims that the bribes led to an inferior contract. The government, however, says it was unable to identify a provable instance of harm.

"Basically, Plaintiff's counsel seeks to have the Court conclude that the ... U.S. Attorney's office has failed to uphold its obligation to seek justice in this case," Borman wrote, "and therefore, the Court should establish oversight/control of that office, peruse its files, question AUSAs and federal agents, and subpoena witnesses that the Plaintiff requests."

The "omnibus" request, Borman wrote, essentially seeks the court to take over a piece of another branch of government.

Stellantis declined to comment on the decision. Attorneys for the auto workers could not be reached late Monday afternoon.

Borman reconfirmed a sentencing hearing for FCA set for Aug. 17.


Twitter: @BreanaCNoble