Federal indictment charges Fiat Chrysler paid top UAW negotiator $1.2 million in bribes
World Socialist Web Site
By Jerry White
27 July 2017
Holiefield and FCA CEO Sergio Marchionne at federal loan payback celebration in 2011. Credit: FCA
A federal indictment filed in US District Court in Detroit Wednesday
charges that a former vice president of Fiat Chrysler funneled more
than a million dollars in bribes to United Auto Workers Vice President
General Holiefield between 2009 and 2014.
Holiefield, who died of pancreatic cancer in March 2015, pushed through
pro-company labor agreements in 2007, 2009 and 2011 that imposed
crushing concessions on Fiat Chrysler workers, including a 50 percent
cut in the wages of new hires and establishing the hated 10-hour-a-day
“alternative work schedule.”
Named in the indictment is Alphons Iacobelli, Fiat Chrysler Automobiles
(FCA) vice president for employee relations from 2008 to 2015, who was
responsible for negotiating with the UAW. Also charged is Monica
Morgan, the girlfriend and later the wife of UAW Vice President
Holiefield.
Morgan, 54, is a well-connected photographer and publisher of Who’s Who
in Black Detroit, an “upscale coffee table book,” highlighting the
achievements of African American business and political leaders. She
married Holiefield in September 2012 in a ceremony at St. Mark’s
Basilica in Venice and they honeymooned in Athens, Naples, Rome,
Livorno, Istanbul, Toulon and Barcelona.
A federal grand jury returned an indictment after an investigation that
included the FBI and the Internal Revenue Service criminal
investigation division. Federal prosecutors have charged the two with
12 counts of violating federal labor and tax laws, including conspiring
to violate the Labor Management Relations Act, which prohibits
employers from bribing union officers and those officers from receiving
or agreeing to accept such bribes. The two are also charged with
concealing payments and defrauding the government by filing false tax
returns or failing to file tax returns.
Between 2009 and 2015, Iacobelli, FCA Financial Analyst Jerome Durden
and other co-conspirators “paid and delivered more than $1.2 million in
prohibited payments and things of value, directly and indirectly, to
UAW Vice President General Holiefield and other UAW employees,” the
indictment charges.
The conduit for these payoffs was the UAW-Chrysler National Training
Center (NTC) in Detroit, one of the myriad labor-management schemes set
by the UAW and Big Three automakers in the 1980s. The NTC, a tax-exempt
corporation, which purports to provide education, training, and
retraining to autoworkers, received between $13 million and $31 million
in annual payments from FCA between 2009 and 2014.
According to the indictment, Iacobelli and Durden, the NTC comptroller
in charge of finances and spending, funneled company money “for
personal travel, personal purchases and personal expenditures of UAW
Vice President General Holiefield and other UAW officials, their family
members and their associates.” No other UAW officials are named.
More than a million dollars in NTC funds were transferred to dummy
companies set up by Holiefield and Morgan, and to a phony charity—the
Leave the Light on Foundation (LTLOF)—which Holiefield formed “to help
children who are struggling with hardships,” according to 2011 donation
appeal by the UAW executive.
Between 2010 and 2012, the NTC transferred $668,612 to these companies,
which were selected as “vendors” by the training center in no-bid
contracts. An estimated $178,000 in NTC funds were also transferred to
Holiefield’s “charity” between 2009 and 2011. Most of the operating
funds of foundation went to Morgan who used them for personal
expenditures at retailers, night clubs and restaurants, according to
the indictment.
Between 2011 and 2013, the NTC also purchased more than $30,000 in
airline tickets for Morgan to travel to Miami, Las Vegas, Los Angeles.
In June 2011, Iacobelli authorized a payment for Holiefield to stay at
a suite in the Beverly Hills Hotel in Beverly Hills, California for
four nights at a cost of $3,100 per night.
UAW Vice President General Holiefield
In 2012 and 2013, federal prosecutors say, Holiefield made over
$200,000 worth of personal purchases on his NTC-issued credit card,
including jewelry, furniture, designer clothing, and other personal
items and expenses, and in 2014 the NTC paid off the remaining
$262,219.71 balance of the mortgage on Holiefield’s Harrison Township,
Michigan home.
‘fat, dumb and happy.’
The FCA officials, the indictment says, viewed these payments as an
investment in “relationship building” with the UAW vice president.
Durden reported that he, Iacobelli and other FCA officials “created a
liberal spending policy for the NTC issued credit cards as part of
their effort to keep senior members of the UAW Chrysler Department
‘fat, dumb and happy.’”
According to the indictment, in 2011 UAW President Bob King confronted
Holifield and Iacobelli and told them that “paying Monica Morgan was a
bad idea and that they could ‘go to jail.’ King, the indictment says,
instructed them not to direct any additional business to Monica
Morgan.” Further inquiries took place in 2013, according to the
indictment, which included the UAW General Counsel.
Whether such meetings, let alone instructions to stop the payments,
ever took place is unknown. The reference to King, however, indicates
that the former UAW president and other top union officials, likely
fearing their own prosecution, are cooperating with federal
investigators and prosecutors.
In any case, Holiefield did not stop his operation. Instead he set up
another dummy company and hired an unnamed “associate” to “get around
conflicts of interest rules.” The new company—”Morgan Company A”—was
quickly hired by NTC as a vendor and sent $200,000 in company money.
During this time, Durden, who personally collected the credit card
statements mailed to the NTC offices for Holiefield and other UAW
officials, instructed NTC accounting staff not to open, examine or
review the NTC credit card statements, and allegedly changed the
security on his accounting software.
At the same time, the Fiat Chrysler executives took their own cut from
the money stolen from Chrysler workers. FCA officials transferred more
than a million dollars in NTC funds, according to the indictment, to
Iacobelli to buy two solid gold limited edition Mont Blanc fountain
pens, costing $35,700 each, a 2013 Ferrari 458 Spider sports car,
travel on a private jet, and to install a swimming pool, outdoor
kitchen and outdoor spa at his Rochester Hills, Michigan home.
In June 2015, on the eve of talks for a new four-year contract with the
UAW, Iacobelli suddenly retired with no explanation. In January 2016,
General Motors hired Iacobelli as executive director of labor
relations. GM officials have not said whether he still works for the
automaker.
As for Holiefield, his March 2015 funeral was attended by past and
present UAW presidents and top executives, Democratic Party officials,
including Detroit Congressman John Conyers Jr., and auto bosses.
UAW President Dennis Williams praised the “gentle giant” for being a
“tireless activist for working women and men everywhere,” who worked
side by side with President Obama to bring “Chrysler through the dark
days of the auto crisis.” FCA CEO Sergio Marchionne sent a statement
calling Holiefield a “true partner.”
The indictments further expose the reactionary, pro-company character
of all the contracts negotiated by the UAW, including the 2015
contracts signed by Holiefield’s replacement and UAW executives at GM
and Ford that were only rammed through over rank-and-file opposition by
resort to threats, intimidation and ballot-stuffing. Indeed, the FBI
admitted the scheme elaborated in the indictment, “calls into question
the integrity of contracts negotiated during the course of this
criminal conspiracy.”
The indictment of Holiefield confirms the long-held suspicions of
workers in the Chrysler factories. “We knew all along we were being
sold out,” said one Toledo, Ohio Jeep worker, who added, “even the FBI
is saying the contract was a fraud.”
In a damage control effort, Fiat Chrysler released a statement saying
“FCA US and the UAW were the victims of malfeasance by certain of their
respective employees that held roles at the National Training Center,
an independent legal entity” and that these egregious acts were neither
known to nor sanctioned by FCA US.” The company fired the two FCA
officials after an investigation and “also worked with the UAW to
implement governance, auditing and structural reforms to improve the
accountability and transparency of the NTC.”
Late Wednesday, the UAW released its own statement, making the absurd
claim that the current leadership had no knowledge of any illegal
activity until the federal government informed them. It went on to
defend the integrity of the sell-out agreements negotiated by
Holiefield. It also claimed the none of the money used to pay off UAW
officials came from workers—a blatant lie, since the UAW regularly
bargains away workers’ wages and benefits in exchange for increased
funding to their labor-management businesses.
the UAW was aware of this scheme at least as early as 2011 and concealed it from autoworkers and the public
As the indictment makes clear, the UAW was aware of this scheme at
least as early as 2011 and concealed it from autoworkers and the
public. It strains credibility to believe similar operations, on even
grander scales, are not already in place, at UAW-Ford and UAW-GM “human
resource” and “training centers.”
The gross corruption of Holiefield is simply the crudest expression of
the content of the UAW’s corporatist labor-management “partnership”
with the auto bosses based on its suppression of the class struggle and
the political subordination of the working class to the big business
Democratic Party.
Read more at:
New York Times
Detriot Free Press
Updates: July 2018
Fiat Chrysler's former labor chief pleads guilty in payoffs for UAW bosses
Top aide to former UAW vice president makes plea deal
A long list of articles on the corrupt UAW officals scandals
top contents
appendix
previous next