Feds charge ex-UAW official in widening scandal

Robert Snell
The Detroit News

Detroit — Nancy Adams Johnson thought she had reason to celebrate in September 2015: the United Auto Workers had reached a tentative agreement with Fiat Chrysler Automobiles NV.

She and fellow UAW officials headed to the London Chop House, the legendary Detroit restaurant with red leather banquettes that in the 1980s was a second home for Chrysler Corp. CEO Lee Iacocca and other Motor City powerbrokers.

Adams Johnson, the union’s No. 2 FCA official, arrived at the downtown steakhouse to mark the labor contract with the automaker, a successor to the company Iacocca steered away from possible bankruptcy. The dinner cost $6,912, which federal prosecutors say Adams Johnson paid with money from Fiat Chrysler.

Within days, however, UAW workers rejected the tentative agreement that first brought Adams Johnson and other union leaders to the London Chop House, complaining the deal favored the automaker at the expense of blue-collar workers.

The meal factored into a federal indictment unsealed Wednesday that alleges Adams Johnson, 57, of Macomb Township and other union and Fiat Chrysler officials engaged in a broad conspiracy to corrupt the labor negotiation process. She received tens of thousands of dollars in illegal payments and benefits from Fiat Chrysler during the alleged conspiracy, including $1,100 designer shoes, first-class flights to California, resort stays and limousine rides, according to federal prosecutors.

“This is the UAW’s worst nightmare — that their people can be bought for a pittance,” said Peter Henning, a Wayne State University law professor and former federal prosecutor. “Why would these kinds of gifts be given to someone who Fiat Chrysler is negotiating with except to buy favor? This is the worst kind of corruption. You are selling out workers for a very nice meal.”

The former UAW official, Nancy Adams Johnson, 57, of Macomb Township, was charged in an indictment unsealed Wednesday, March 21, 2018, and is the sixth person charged in a widening scandal that takes aim at the luxury lifestyle of UAW officials.

The five-count indictment sheds light on what prosecutors describe as a pattern of Fiat Chrysler officials funneling illegal payments to UAW labor leaders through a joint training center. Adams Johnson is the sixth person charged in the widening case that already has ensnared former Fiat Chrysler executive Alphons Iacobelli and Monica-Morgan Holiefield, the widow of former UAW Vice President General Holiefield.

Adams Johnson’s lawyer did not respond to a message seeking comment Wednesday. Fiat Chrysler CEO Sergio Marchionne, who has been questioned by federal investigators, has said the alleged conspiracy had “nothing whatsoever to do with the collective bargaining process.”

In a statement, the UAW called Adams Johnson’s “illegal conduct alleged in today’s indictment appalling. ... There is no evidence that compromised individuals involved in this investigation, including Ms. Johnson, in any way corrupted the negotiations of the terms of the collective bargaining agreement.”

The government’s 18-page indictment featured new details about an alleged conspiracy that continued after Holiefield retired in June 2014 and chronicled crimes that continued during the leadership of his successor, UAW Vice President Norwood Jewell. The conspiracy described by prosecutors raises questions about the sanctity of labor contracts negotiated between the UAW and Fiat Chrysler.

Adams Johnson, a member of UAW-Chrysler National Training Center board, was Jewell’s top administrative assistant and they served on the 2015 national committee that negotiated the contract with Fiat Chrysler. At least three UAW officials on the committee have either been charged or linked to the investigation, and that figure could climb, The News has learned.

The indictment could be a way to pressure Jewell.

“When prosecutors get the No. 2, the No. 1 has to be very nervous,” Henning said.

The illegal benefits came from Iacobelli, who is awaiting a federal prison sentence, and former Fiat Chrysler analyst Jerome Durden, who also has pleaded guilty. Other Fiat Chrysler executives involved in the alleged conspiracy are not identified in the indictment.

Adams Johnson traveled, golfed, dined and shopped with Fiat Chrysler money funneled through the training center under a policy created by the auto company’s officials to keep UAW leaders “fat, dumb and happy,” according to the government. The policy was designed to wring concessions favoring the automaker, according to the government.

Adams Johnson was charged seven months after The Detroit News first linked her and Jewell to the corruption investigation. Sources described Adams Johnson as one of the more egregious abusers of the training center’s credit cards, saying she charged more than $75,000 from 2014 to 2016 for personal items, including clothes, jewelry, luggage and meals.

She was charged in the indictment with conspiracy to violate the Labor Management Relations Act and four counts of receiving and accepting prohibited money and things of value from a union employer. Both are five-year felonies.

“Today’s indictment marks the sixth defendant charged in a scheme where senior UAW officials betrayed the hard-working men and women of the union by accepting illegal payments from company executives,” U.S. Attorney Matthew Schneider said in a statement.

The illegal payments and benefits flagged by federal investigators were from 2014 and 2015. They include:

■$6,912 at the London Chop House.

■$6,678 on flights between Detroit and California.

■$4,587 spent at LG’s Prime Steakhouse in Palm Springs, California.

■$1,259 for luggage.

■$1,652 at Cardliff Limousine in Palm Springs.

■■More than $1,800 at Indian Canyons Golf Resort in Palm Springs.

■More than $1,800 at St. John Knits and other retail stores in and around Palm Springs.

■More than $6,900 at the Renaissance Resort & Spa in Palm Springs.

■$1,217 at Salon Bilal in Pasadena, California.

■$1,160 for a pair of Christian Louboutin shoes at Neiman Marcus.

■More than $1,700 for a set of graphite women’s golf clubs and a diva cart bag.

■More than $1,000 at Divalicious and other retail stores in Orlando, Florida, and Clinton Township.

In all, Adams Johnson’s flights and shopping sprees cost more than $33,000, according to the government.

Adams Johnson also was linked to a $2,180 Italian-made Beretta shotgun purchased with training center funds for Jewell as a birthday present in 2015. She told former UAW official Virdell King to buy the shotgun with her training center credit card, according to the indictment.

After The News reported about the shotgun and the widening investigation, the UAW announced in November that Jewell would retire Jan. 1, roughly six months before the scheduled end of his term. Jewell has not been charged with a crime during the ongoing investigation.

The UAW said that Jewell didn’t know the shotgun was purchased with training center money and later reimbursed the training center.

Jewell also factored into other questionable expenses.

Iacobelli, the former Fiat Chrysler executive, approved spending more than $30,000 in worker training funds on a party for Jewell, a bash that included “ultra-premium” liquor and strolling models who lit labor leaders’ cigars, The Detroit News has learned.

The training funds covered the $7,000 cigar purchase and a $3,000 tab for wine in bottles with custom labels that featured Jewell’s name, sources told The News. The party was described by federal prosecutors as an example of a cozy relationship between the automaker and UAW leaders designed to corrupt the bargaining process and implementation of a contract for thousands of workers.

The London Chop House expense, meanwhile, is “very troubling,” said Harley Shaiken, a professor at the University of California-Berkeley who specializes in labor and the global economy.

“You can understand the tension that goes into a negotiation, but to celebrate at that scale … was inappropriate at best,” Shaiken said Wednesday. “This was selfish and premature. …”

Shaiken said the recent revelations bring up two questions: did the behavior affect negotiations, and how is the UAW responding?

UAW President Dennis Williams and other union officials are responding “aggressively,” Shaiken said.

And though it’s clear the actions were intended to sway UAW contract negotiations, it doesn’t appear to have worked, Shaiken said. UAW members ultimately approved a renegotiated labor contract after rejecting the initial tentative deal.

“It’s not desirable,” Shaiken said. “But I don’t think it had the desired affect.”

Adams Johnson is the sixth person charged in a widening scandal that increasingly is focused on UAW officials who served on a committee that negotiated a union contract with Fiat Chrysler in 2015.

At least three UAW officials on the committee have either been charged or linked to the investigation, and that figure could climb, The News has learned. Jewell and King also served on the committee.

Jewell and Adams Johnson, meanwhile, were two of the UAW’s top negotiators during 2015 contract negotiations with Fiat Chrysler.

Adams Johnson took first-class flights to California and paid for the trips using money funneled through the UAW-Chrysler National Training Center, according to the indictment.

The indictment focuses on the UAW’s pattern of spending in Palm Springs.

Since 2015, the UAW has spent at least $674,903 at the Renaissance Palm Springs Hotel, according to the union’s annual filings. The Renaissance Palm Springs is a four-star hotel at the base of the San Jacinto Mountains where suites cost $339 per night.

The hotel is four miles north of the Indian Canyons Golf Resort, where Adams Johnson is charged with spending more than $1,800 in January 2015.

The UAW held its Region 5 leadership conferences at the hotel in 2015 and 2016. The region is headed by Director Gary Jones, who is expected to become the new UAW president later this year.

It is unclear how much, if anything, the UAW-Chrysler National Training Center spent at the Palm Springs hotel.

The center’s annual filings do not itemize specific travel.

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Twitter: @robertsnellnews

Ian Thibodeau contributed.