By Nora Naughton
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (August 4, 2020).
General Motors Co. has asked a federal judge to reconsider the
tossing of a lawsuit it filed last fall against Fiat Chrysler
Automobiles NV, in GM's latest attempt at reviving an unusual legal
battle between the two Detroit rivals.
In a motion filed Monday in Detroit, GM said it had uncovered
new evidence to further support its earlier claims that Fiat
Chrysler was trying to weaken its larger competitor by bribing top
officials with the United Auto Workers union.
Federal Judge Paul Borman last month dismissed GM's civil
racketeering lawsuit, ruling the auto maker had failed to show it
would have been a primary victim of any misconduct allegedly
perpetrated by Fiat Chrysler executives.
GM's new motion not only claims it has new evidence to prove it
was the victim of direct harm, but also for the first time names
former UAW President Dennis Williams as a defendant.
Among the new allegations, GM claims Fiat Chrysler and Mr.
Williams schemed to plant a top UAW official on GM's board to steal
confidential information. The amended lawsuit also alleges Fiat
Chrysler used overseas accounts to fund a bribery scheme, which GM
claims benefited this official along with Mr. Williams.
Lawyers for Mr. Williams didn't respond to requests for
comment.
In a statement Monday, Fiat Chrysler reiterated that it believes
GM's lawsuit is without merit, noting that a federal court judge
already dismissed the case.
GM's filing is the latest twist in an unprecedented legal tussle
between two automotive rivals that compete against each other in
many categories, including profit-rich pickup trucks.
GM last fall filed the civil racketeering lawsuit, alleging Fiat
Chrysler intentionally tried to harm it by paying off UAW officials
to win labor contracts with lower costs and more flexibility than
its larger rival.
GM had previously based much of its case against Fiat Chrysler
on evidence uncovered in a yearslong federal investigation into
union corruption within the auto industry. The criminal probe,
which first became public in 2017, has led to numerous convictions,
including of a former top bargainer at Fiat Chrysler and several
UAW officials.
This latest filing, however, makes new allegations that haven't
surfaced in court documents related to the continuing federal
investigation.
In its amended complaint, GM accuses Mr. Williams and Joe
Ashton, a former UAW vice president, of taking payments in return
for their participation in a larger plot by Fiat Chrysler to weaken
GM and force a merger between the two companies.
GM had alleged in its original lawsuit that Sergio Marchionne,
Fiat's chief executive at the time, orchestrated a scheme that
involved bribing UAW officials to gain lower labor costs and a
competitive advantage over Fiat's rivals in union contracts.
GM publicly resisted the merger proposal in 2015. Mr. Marchionne
died in 2018.
In its amended complaint, GM alleges that Fiat Chrysler's scheme
was broader than it had outlined originally, involving Mr. Williams
and Mr. Ashton, who for a period sat on GM's board as a
representative for the union's health care trust.
The filing alleges that Fiat Chrysler, through unidentified
"agents," directed funds into a network of bank accounts in places
such as Switzerland, Luxembourg and the Cayman Islands that then
benefited Mr. Williams, Mr. Ashton and other UAW officials.
Some of those accounts were also allegedly used to pay Alphons
Iacobelli, formerly Fiat Chrysler's top labor negotiator, who is
among the executives GM has named in its suit.
Mr. Iacobelli in 2018 pleaded guilty to making illegal payments
to UAW leaders and to filing a false tax return that failed to
include income illegally siphoned from the company.
He is serving a 5 1/2 -year prison sentence for his involvement
in corruption prosecutors previously uncovered at Fiat
Chrysler.
GM said it recently learned about the accounts by using
third-party investigators, according to an exhibit filed in support
of the motion.
The Detroit auto maker alleges both Mr. Ashton, who served on
GM's board between 2014 and 2017, and Mr. Iacobelli, who the
company hired into its labor relations department in 2016, were
"informants" placed at GM who then passed along confidential
information to Fiat Chrysler.
GM alleges that in return both men received payments into
foreign bank accounts that they controlled. GM alleges that Mr.
Ashton solicited and received hundreds of thousands of dollars from
Fiat Chrysler that were held in an offshore account in the Cayman
Islands.
Mr. Iacobelli declined to comment through an attorney. A lawyer
for Mr. Ashton didn't reply to requests for comment.
"These actions were not done to nor did they harm the UAW,"
attorneys for GM claimed in the amended complaint. "Instead they
were intended to and did cause harm to GM, the intended target of
the FCA bribery scheme."
The UAW said it was unaware of the offshore accounts, and that
GM's new allegations haven't surfaced in its discussions with
federal prosecutors.
Last year, federal prosecutors charged Mr. Ashton and two aides
in a kickback scheme involving the GM training center's vendors.
Prosecutors say Mr. Ashton and the aides demanded kickbacks in
return for steering more than $10 million worth of contracts for
providing backpacks, jackets and watches intended for GM
workers.
Mr. Ashton later pleaded guilty to charges of conspiracy to
commit fraud and money laundering. He hasn't been sentenced.
Ben Foldy contributed to this article.
(END) Dow Jones Newswires
August 04, 2020 02:47 ET (06:47 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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