Ex-Fiat Chrysler Executive Accused of Siphoning Millions With Union Leader – New York Times

Posted: Thursday, July 27, 2017

“Today’s indictment exposes a disturbing criminal collaboration that was ongoing for years between high-ranking officials” from Fiat Chrysler and the U.A.W., David P. Gelios, a special agent with the Federal Bureau of Investigation in Detroit, said in statement.

Fiat Chrysler said in a statement that it learned of the actions of Mr. Iacobelli and Mr. Durden in June 2015 and that the men had left the company. Fiat Chrysler and the U.A.W. were “victims of malfeasance by their respective employees,” the company said.

Dennis Williams, the U.A.W. president, said the union was “appalled” by the charges. “The U.A.W. had absolutely no knowledge of the fraudulent activities detailed in this indictment until they were brought to our attention by the government,” he said in a statement.

Both Fiat Chrysler and the U.A.W. said they were cooperating with investigators.

Calls to phone numbers listed under Mr. Iacobelli’s name and Mr. Durden’s name were not returned. Ms. Morgan could be reached for comment.

While negotiating contracts, auto executives and union representatives often portray relations as tense, signaling that they are battling to win the best deal for their constituents. In recent years, the U.A.W. has staged short strikes during contract talks to show rank-and-file members that they took a hard line with the auto companies.

But the relationship is not always adversarial, however. The industry has seen instances when labor and management representatives have formed close, private ties and crossed legal lines. A decade ago, Volkswagen was rocked by scandal when it was revealed that the company’s top worker representative and a senior labor executive had used company accounts to pay for prostitutes, international travel and expensive wines.

The indictment handed down in Detroit indicated that the payments to Mr. Holiefield began as a way of winning his cooperation in negotiations and labor issues.

The payments were made using a bank account and credit cards linked to the U.A.W.-Chrysler National Training Center, in Detroit. The N.T.C., as it was known, was funded by Chrysler with annual payments of $13 million to $31 million.

Early on in the scheme, Mr. Iacobelli and Mr. Durden approved transfers of more than $150,000 from the training center’s funds to a charity set up by Mr. Holiefield, according to the indictment. Mr. Durden served as treasurer of the charity, called the Leave the Light On Foundation.

In 2012, training center accounts began paying off large American Express bills for Mr. Iacobelli, and covered the cost of leasing a private airplane, according to the indictment. A payment of $96,000 covered the cost of a swimming pool at his 9,800-square foot, three-story home, which has seven bathrooms. Real estate websites value the residence at $1.4 million.

By October 2013, the U.A.W.’s general counsel began reviewing the training center’s accounts and credit card policies, the indictment said. At that time, Detroit media outlets reported that Mr. Holiefield had come under heavy criticism and the U.A.W. president at the time, Bob King, met with several local chapters to quell the uproar. A few weeks later, the union announced Mr. Holiefield would retire the following June. That month, the training center issued the check that paid off Mr. Holiefield’s mortgage.


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