Fiat Chrysler Reaches Settlement With Feds Over Union Corruption -- 2nd Update
By Nora Naughton
The Justice Department said it has reached a settlement with
Fiat Chrysler Automobiles NV's U.S. division in the government's
long-running investigation into union corruption among top labor
leaders in Detroit.
The U.S. subsidiary, known as FCA US and now part of Stellantis
NV, the newly formed car company that absorbed Fiat Chrysler in a
merger earlier this month, agreed to plead guilty to a criminal
charge of conspiring to violate U.S. labor law and pay a $30
million fine, according to statements released Wednesday by the
company and the U.S. attorney's office in Detroit.
FCA US also agreed to an independent compliance monitor for
three years to oversee the closing of a worker training center that
had been a focus in federal investigation and other internal
controls related to that facility, the company said. The plea
agreement is subject to court approval.
The settlement concludes the government's investigation into FCA
US for misconduct uncovered at the training center, an entity
jointly operated with the United Auto Workers union.
The step is also the latest in the multiyear probe that in
recent months led to a separate civil settlement with the UAW and
15 convictions, including two former union presidents and a former
Fiat Chrysler executive who ran the company's labor relations
Fiat Chrysler had long maintained that the wrongdoing unearthed
by investigators in recent years was perpetrated by "rogue
individuals" acting in their own interest and not at the direction
or to the benefit of the company.
Earlier this month, the Italian-American auto maker combined
with France's PSA Group in a merger valued at more than $50
Fiat Chrysler, previously led by the late Sergio Marchionne,
emerged early on as a focal point in a federal investigation that
first became public in 2017 with the indictment of its former top
Since then, prosecutors say they have uncovered evidence of a
broader conspiracy at the auto maker to illegally steer money set
aside for worker training to UAW leaders. Union officials in turn
used the money to enrich themselves, spending it on expensive
meals, trips and luxury goods, prosecutors say.
In charging documents released Wednesday, federal authorities
accused FCA US of conspiring to violate U.S. labor law by funneling
$3.5 million in payments and items of value to UAW officers and
The scheme, dating back to 2009, the year Chrysler Group emerged
from bankruptcy, was executed by executives in an effort to buy
"labor peace" and corrupt the bargaining process, the government
said in earlier court filings.
In December, the Justice Department reached a settlement with
the UAW that subjects the roughly 400,000-member union to a
six-year period of oversight by a court-appointed monitor and
requires the UAW to pay $1.5 million to resolve outstanding tax
The UAW has publicly condemned former leaders charged in the
investigation and more recently has pointed to changes enacted
under the current leadership to prevent corruption.
Wednesday's settlement brings to a close yet another
high-profile legal challenge for FCA US, which in recent years paid
fines for allegedly misreporting monthly sales reports and
allegations it used illegal software to cheat on government
In recent years, the U.S. division was a defendant in a
separate, civil racketeering lawsuit brought last fall by rival
General Motors Co., alleging it bribed UAW officials to gain an
advantage in labor negotiations. The lawsuit cited the long-running
federal probe, and in it, GM said the bribes were authorized by Mr.
Fiat Chrysler fought the lawsuit, calling it "meritless" and
accused GM of trying to interfere with its merger plans with
Peugeot-maker PSA Group. A federal judge dismissed the lawsuit last
Write to Nora Naughton at Nora.Naughton@wsj.com
(END) Dow Jones Newswires
January 27, 2021 12:20 ET (17:20 GMT)
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