U.S. Expands UAW-Linked Payments Probe to Ford, General Motors
November 02 2017 - 7:14PM
Dow Jones News
By Chester Dawson and Mike Colias
DETROIT -- General Motors Co. and Ford Motor Co. have been
contacted as part of a Justice Department probe into job-training
programs set up jointly with the industry's biggest autoworker
union, the companies said Thursday.
The companies said they are cooperating with the investigation
by the U.S. Attorney's Office for the Eastern District of Michigan
into the training centers, which are funded by the auto makers, but
run by United Auto Workers officials.
The federal prosecutors' move indicates the probe is expanding
after the indictment of a former Fiat Chrysler Automobiles NV
executive in July. Prosecutors had been looking into alleged
violations of labor and tax laws from the illicit diversion of
millions of dollars at a Fiat Chrysler-funded training program.
"We are confident in the UAW-Ford National Programs Center
leadership team and the policies and procedures used to govern the
program operations," Ford said in a statement.
GM confirmed that prosecutors have reached out to the company,
but didn't say anything other than that it was "fully
cooperating."
Representatives for the U.S. Attorney's Office declined to
comment, citing a policy of not speaking about continuing
investigations.
Investigators are interested in current and former UAW
executives in charge of relations with GM, according to a report in
the Detroit News, which first reported the issuance of subpoenas to
the UAW-GM Center for Human Resources and the UAW-Ford National
Programs Center.
A spokesman for the UAW had no immediate comment, but referred
to its previous denials of any knowledge of the allegations before
being notified by prosecutors. The union said in July it has "zero
tolerance" for corruption or wrongdoing by its officials.
The UAW, which represents more than 100,000 auto workers,
launched an internal investigation led by an outside counsel and
has removed "a narrow universe of people" it believed to be
connected to the fund diversion scheme.
The training centers were created in the mid-1980s and funded
under collective bargaining agreements between the UAW and
Detroit's Big Three auto makers. They are designed to provide
continuing-education coursework for job training, health and safety
as well as programs for tuition assistance to unionized auto
workers.
Federal prosecutors allege Fiat Chrysler's center morphed into a
slush fund for extravagant gifts, including travel, designer
clothing, jewelry and enough cash to, in one case, pay off a union
leader's mortgage.
The UAW-Chrysler National Training Center is governed by a joint
board of eight members split between UAW and company executives.
Fiat Chrysler has said it was unaware of the alleged misconduct and
"immediately separated" Alphons Iacobelli, its former labor
relations head, and another employee implicated in the scheme in
June of 2015 after being informed of the probe.
Earlier this year, a federal grand jury indicted Mr. Iacobelli
and Monica Morgan-Holiefield, the widow of former UAW vice
president General Holiefield, on allegations they conspired between
2009 and 2014 to siphon off funds for personal use that were
intended for worker training.
Mr. Iacobelli was charged with "acting in the interest of FCA"
as part of a conspiracy to funnel money from the UAW-Chrysler
National Training Center to Mr. Holiefield during a time when the
union official was the top negotiator with the auto maker.
The federal indictment also alleges Mr. Iacobelli violated tax
law in relation to $1 million diverted for his personal use on
items such as a Ferrari sports car costing more than $350,000.
Mr. Iacobelli, who has declined to comment on the charges,
entered a plea of not guilty, according to his lawyer. Ms.
Morgan-Holiefield couldn't be reached for comment.
Write to Chester Dawson at chester.dawson@wsj.com and Mike
Colias at Mike.Colias@wsj.com
(END) Dow Jones Newswires
November 02, 2017 18:59 ET (22:59 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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