Former UAW official charged in Fiat Chrysler payoff probe – Reuters

Posted: Saturday, August 19, 2017

(Reuters) – A former senior official at the United Auto Workers trade union was charged on Friday with conspiring with other union officials to accept improper payments from Fiat Chrysler Automobiles NV (FCHA.MI) officials over a four-year period.

Virdell King, 65, of Detroit, who a union official until February 2016, was charged with conspiracy to violate labor laws in U.S. District Court in Detroit.

King was one of the senior UAW officials responsible for negotiating and administering the contract between Fiat Chrysler and the union, the government said.

A lawyer for King, John Shea, declined to comment Friday. King is the fourth person charged in the investigation.

The Justice Department charged King with accepting thousands of dollars in designer shoes, clothing, jewelry, luggage and other personal items, all of which were purchased using credit cards issued through the UAW-Chrysler National Training Center (NTC). She also made at least $40,000 in purchases for other UAW officials, the government said.

The government has said Jerome Durden, a former Fiat Chrysler official, conspired to divert over $4.5 million in NTC funds intended for UAW member training and education. He pleaded guilty on Aug. 8 to conspiracy and preparing false tax returns and faces up to 37 months in prison under a plea deal.

A former Fiat Chrysler vice president of employee relations, Alphons Iacobelli, was charged last month with making $1.2 million in improper payments to a former union vice president and his wife. He has pleaded not guilty.

According to court documents, Iacobelli told senior UAW officials they could use the NTC credit cards to make personal purchases, stating “if you see something you want, feel free to buy it.”

The government said in court documents at least five senior UAW officials, including King, made personal purchases with NTC credit cards.

UAW President Dennis Williams said on Friday the union is “disheartened by the misconduct alleged in today’s indictment … Based on our own internal investigation, we believe anyone who engaged in intentional misconduct is no longer employed by the UAW.”

The head of the Detroit FBI, David Gelios, said “years of fraud and corruption within a select group of the FCA and UAW hierarchy continue to be eroded through the diligence and collaboration of law enforcement.”

Fiat Chrysler Chief Executive Sergio Marchionne said last month the “deplorable” conduct “had nothing whatsoever to do with the collective bargaining process.” The company also said in July that the “egregious acts were neither known to nor sanctioned by (Fiat Chrysler),” and declined to elaborate on Friday.

Reporting by David Shepardson, editing by G Crosse


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