UAW & Chrysler Named Co-Conspirators in Corruption Case

Justice Department alleges that company, union engaged in embezzlement scheme

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The Justice Department is now going after Fiat Chrysler and the United Auto Workers for a corruption scheme both attributed to rogue leaders.

The department has already secured guilty pleas from union and company executives accused of embezzling funds to pay for everything from mortgages to foreign luxury cars. When it announced indictments against the senior officials, as well as the widow of a former UAW executive, both the company and union pled ignorance, saying they were victims of corrupt individuals. Federal prosecutors, however, have now declared them co-conspirators in the $4.5 million scheme, alleging that they conspired to enrich one another at the expense of employees.

"Executives conspired with one another, with FCA, with officials at the UAW, and with the UAW, to violate the Labor Management Relations Act," the department said in a court filing first obtained by the Detroit News.

The union and the company have denied any wrongdoing in connection to the scandal. Both declined to comment on the department allegations, as well as interviews on the subject. A UAW spokesman referred the Washington Free Beacon to outgoing president Dennis Williams's denial of any knowledge of the embezzlement at the union's annual conference on Monday.

"Those who misallocated or misused training center funds betrayed our trust. The UAW has zero tolerance for corruption or wrongdoing, at any level of the organization," he said. "Our leadership team had no knowledge of the misconduct—which involved former union members and former auto executives—until it was brought to our attention by the government."

A Fiat Chrysler spokesman said the company had "no further comment at this time" regarding the scandal. He referred to a July 2017 statement claiming the company and union were "victims of malfeasance by certain of their respective employees that held roles at the National Training Center." Both groups have said they cooperated with federal investigators when the lucrative corruption scheme was brought to their attention and took action to cut off the accused leaders upon "obtaining credible evidence of wrongdoing."

"These egregious acts were neither known to nor sanctioned by FCA US," the statement said. "The Company has also worked with the UAW to implement governance, auditing and structural reforms to improve the accountability and transparency of the NTC."

The scandal has snowballed in recent months. When charges were first announced in 2017, officials were accused of diverting about $1 million from the training center. The estimated figure has quadrupled. The number of union and company leaders alleged to have partaken in the scheme has grown with every guilty plea from the original figures in the case, which include former Chrysler vice president Alphons Iacobelli and Monica Morgan, the wife of late UAW executive General Holiefield. Both have pled guilty in connection to the scandal.

The Department of Justice did not return request for comment.

Bill McMorris   Email Bill | Full Bio | RSS
Bill McMorris is a staff writer for the Washington Free Beacon. He joins the Beacon from the Franklin Center for Government and Public Integrity, where he was managing editor of Old Dominion Watchdog. He was a 2010 Robert Novak Fellow with the Phillips Foundation, where he studied state pension shortfalls. His work has been featured on CNN, Fox News, The Economist, Colbert Report, and numerous print publications and radio stations. He lives in Alexandria, Va, with his wife and three daughters. His Twitter handle is @FBillMcMorris. His email address is mcmorris@freebeacon.com.

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