U.S. prosecutors say FCA wanted to ‘buy labor peace’ from UAW

DETROIT — The U.S. says Fiat Chrysler Automobiles sought to “corrupt and warp” its relationship with the UAW to obtain advantages in contract agreements “in an effort to buy labor peace.”

The latest allegations in the ongoing federal corruption case involving FCA and UAW officials were reported Monday by the Detroit Free Press and The Detroit News.

A 14-page memorandum of sentencing for Alphons Iacobelli, FCA’s former labor relations chief, stated: “FCA sought to obtain benefits, concessions and advantages in the negotiation and administration of collective bargaining agreements with the UAW in an effort to buy labor peace. High-level officials of the UAW sought to enrich themselves and live lavish lifestyles rather than zealously work on behalf of the best interests of tens of thousands of rank and file members of their union.”

Iacobelli and others are accused of misusing funds intended for the UAW-Chrysler Training Center in Detroit. Iacobelli, the highest-ranking FCA official charged in the scandal to date, in January pleaded guilty to conspiring to violate the Labor Management Relations Act and for subscribing a false tax return. He could face eight years in prison under terms of a plea deal. He is scheduled to be sentenced Monday, Aug. 27.

The memo also notes that, for certain aspects of FCA’s negotiations and relationship with the UAW, Iacobelli reported directly to the automaker’s late CEO, Sergio Marchionne — though it doesn’t mention Marchionne by name. It was the first time the government referred to Marchionne by title, the News reported.

Last week, the News reported that Marchionne gave an expensive watch to UAW Vice President General Holiefield and failed to disclose the gift to federal investigators. Holiefield, who died in 2015, has been implicated in the scandal. His widow, Monica Morgan, pleaded guilty to one count of failing to file a tax return. She was sentenced to 18 months in prison in July.

Others who have been charged are former FCA financial analyst Jerome Durden; former FCA employee Michael Brown; ex-UAW Associate Director Virdell King; UAW official Keith Mickens; and Nancy Johnson, a former top aide to ex-UAW Vice President Norwood Jewell, who was charged with misusing funds but has not yet been arraigned. Jewell has been implicated in the scandal but not formally named as a conspirator by investigators.

Morgan, Iacobelli and Durden are also being sued by the UAW-Chrysler National Training Center to recover more than $4.4 million in damages.

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