By Nora Naughton 

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 03, 2020 17:28 ET (21:28 GMT)

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