A federal indictment unsealed in July could be just the beginning of a larger corruption scandal embroiling both Fiat Chrysler Automotive (FCA) and the United Auto Workers (UAW).
The indictment, released Wednesday, alleges UAW leaders partnered with FCA executives to funnel money allocated for “employee training” into their own pockets. The indictment may just be the tip of the iceberg, according to Automotive News Monday.
According to the indictment, deceased former United Auto Workers (UAW) Vice President General Holiefield, along with his wife Monica Morgan, a well-known Detroit-area photographer, conspired with FCA labor relations chief Alphons Iacobelli to take more than $1.2 million between 2009 and 2014.
Iacobelli, according to Automotive News, personally pocketed over $1 million. The money was reportedly taken from the UAW-Chrysler National Training Center and given to Holiefield, Morgan and other union officials not identified.
Holiefield and Morgan used $262,219 to pay off the mortgage on their home outside Detroit, according to the Detroit News. The two apparently also purchased two solid-gold pens costing close to $40,000 each.
Former FCA financial analyst Jerome Durden was also charged, accused of creating false tax returns to hide payments to Holiefield and others. “More could be charged,” Peter Henning, a former federal prosecutor and professor at Wayne State University Law School, said.
“To be clear, these allegedly misallocated or misused NTC funds were not UAW dues nor were they union funds. These were monies funded by Chrysler pursuant to the collective bargaining agreement,” UAW president Dennis Williams said shortly after the indictment went public. “As your president, I am appalled by the conduct alleged in the indictment, which constitutes a betrayal of trust by a former member of our union.”
FCA CEO Sergio Marchionne said that the actions “were of course neither known nor sanctioned” by the automaker.
The emerging scandal comes as big labor attempts to gain a foothold in the South. The UAW won a deal with Japanese-based Nissan Motor Co. that will allow close to 4,000 full-time employees at its Canton, Miss., plant to vote on whether or not to organize as a labor union.
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