FCA North America pleads guilty in labor corruption scandal

On Monday, an executive for Fiat Chrysler North America acknowledged that the carmaker indeed conspired to pay in excess of $3.5 million in bribes to union leaders over the course of years. Now part of Stellantis, the automaker has agreed to pay a settlement of $30 million for the criminal charges associated with violations to the Labor Management Relations Act. 

Along with the fine, an independent monitor will be appointed for a three-year term to oversee compliance with labor laws, and to dissolve a joint training center with the United Auto Workers union.

In a news release on Monday, acting US attorney Saima Mohsin said, “Through its participation in this conspiracy, FCA violated federal labor law and undermined the collective bargaining process and the faith of the UAW’s membership in their leaders. By seeking a $30 million fine and three years of oversight by a court-appointed monitor, we are holding FCA accountable and sending a message to other companies that these types of crimes will not be tolerated.” 

In association with the federal investigation, it was revealed that the scandal was deeply entrenched in the UAW over at least an eight-year period, from 2009 to 2016. From that investigation, more than a dozen convictions have resulted. That includes funds stolen from the union, broken federal labor laws, paid-out bribes and illegal benefits between the union and FCA execs. 

Egregious corruption  

One such example of corruption involves former Fiat Chrysler Vice President Alphons Iacobelli. He approved a payment in the amount of $262,000 to pay off the mortgage on UAW then-Vice President General Holiefield’s home in Harrison Township. Iacobelli is currently serving a four-year federal prison sentence for his part in the UAW scandal – a term that was reduced earlier this year from the original five-and-a-half-year stint he was convicted to in 2018. Before he could be held accountable in court, Holiefield died in 2015.

Iacobelli also approved a $25,000 expenditure for a party thrown for UAW Vice President Norwood Jewell and others on the union’s governing board. Extravagant charges included “ultra-premium” liquor, cigars in excess of $7,000, and custom-labeled wine that honored Jewell for more than $3,000. Jewell was convicted and sentenced to 15 months in prison for his part, and he is now serving the remainder of his sentence at home. 

The monies for the party were taken from FCA training funds. As a result, the Warren, MI UAW-Chrysler National Training Center has been put up for sale. Training for Stellantis workers may continue to take place at the center, however.  

A short leash instituted 

As a result of the admission of guilt, both UAW and Fiat Chrysler Automobiles operations will be under a magnifying glass. FCA must nominate three independent monitors to oversee operations for a period of three years. 

Assistant US attorney Erin Shaw stated, “If they violate the law during the term of probation, if they provide deliberately false, incomplete or misleading information or fail to retain an independent compliance monitor…, the United States could reinstate criminal charges and bring any other charges based on underlying conduct.”

The effectiveness of such a judgment has been met with skepticism though. Such a small fine for a large company has been viewed as a “drop in the bucket”, barely a slap on the wrist. And self-appointing a monitor gives the perception of impropriety to some. 

John Barbosa is a team leader at Stellantis’ Dundee Engine Plant. He says of the plea agreement, “You’re putting the fox in charge of the hen house. It’s like putting police in charge of investigating the police. It don’t work. It puts on a show for people who don’t know any better.”

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