Feds: Fiat Chrysler VP bribed UAW execs 'to take company friendly positions'

[MichMan]

Source: Detroit Free Press


Feds: Fiat Chrysler VP bribed UAW execs 'to take company friendly positions'

It started out as a scandal about personal greed. Fiat Chrysler and UAW executives, authorities said, were scheming together to line their own pockets.But the scheme, they now claim, had another goal: Helping the company instead of autoworkers, and bribing union officials to get that done.

In an explosive document filed Friday in the growing Fiat Chrysler-UAW scandal, the government said former Fiat Chrysler Vice President Alphons Iacobelli was bribing union officials to persuade them "to take company-friendly positions."This new allegation raises the question of whether or not the union's contract and other decisions were influenced by the wrongdoing, potentially undermining the credibility of the contract. The phrase "company friendly positions," also could relate to how the UAW handled employee grievances, plant specific issues, holiday work and overtime work schedules, training, plant organizational changes and other plant programs.The government, however, doesn't have to prove that contracts or policies were influenced to convict those charged. It only has to show that auto executives were bribing union officials -- a crime that prosecutors claim Iacobelli pulled off through various financial schemes. One of them, they said, involved giving union officials credit cards to go on shopping sprees whenever they felt like it.

The credit cards, they said,  were issued through the UAW-FCA training center, and paid for everything from designer clothes and $1,000 shoes to a Ferrari and swimming pool."Iacobelli said,  'if you see something you want, feel free to buy it. I don't have a problem if you buy it on the charge card,' " prosecutors wrote in a court filing today, adding this was part of a bigger plan to keep senior union officials  "fat, dumb and happy." The details about Iacobelli's alleged motives surfaced in a new charging document that named a fourth targeted defendant in the case. Both the UAW and FCA have previously said that the alleged FCA-UAW scam did not affect the contracts. "It is important for you to know that despite some public commentary to the contrary, the allegations in the indictment in no way call into question the collective bargaining contracts negotiated by our union during this period," UAW President Dennis Williams said last month after the first charges became public. Said Fiat Chrysler CEO Sergio Marchionne in a letter to employees last month: "This conduct had nothing whatsoever to do with the collective bargaining process."


Nevertheless, those involved were in positions to influence both contract negotiations and other decisions. Retired UAW Associate Director Virdell King, the first African-American female to be elected president of a local union in UAW-Chrysler's history, was charged Friday in U.S. District Court today with being part of a conspiracy that involved the theft of more than $4.5 million in autoworker training funds. King, 65, of Detroit, was a UAW employee who served as a senior offical in the UAW Chrysler Department from 2008 until she retired in 2016.














Read more: http://www.freep.com/story/money/cars/chrysler/2017/08/19/feds-fiat-chrysler-and-uaw-execs-werevp-told-uaw-execs-if-you-see-something-you-want-feel-free-buy-i/581715001/

[Dustlawyer]

1. Like everything else, the unions need new blood in the key positions.

The old guard have been feathering their pockets (not all of them).

Having new blood might help get the membership to start voting Democrat again. Union members have been gravitating to the Republican Party for years as they watch Fox News and listen to RW radio. This along with union management being entrenched for years getting too comfortable with company management have weakened the unions considerably.

[sandensea]

2. It is the Fiat way

Its longtime CEO, Gianni Agnelli, was famous for his palm greasing - and for his support of right-wing politics.

[cloudbase]

3. Somewhere,

Walter Reuther is rolling over in his grave.

[Hortensis]

4. Michman, you've posted stories about union corruption and other

seemingly unflattering issues before. Did you have a bad experience with one, perhaps?

[former9thward]

5. Should stories about union corruption be ignored?

Or censored?

[Hortensis]

6. Should stories about union successes and support be ignored?

Or effectively censored by not reporting them?

You know, unionization and collective bargaining built the middle class. People don't really want "manufacturing" jobs back, they want jobs with the kind of pay and benefits that our parents once achieved through collective bargaining.

So, I couldn't help noticing the persistent negativism toward unions (I mean, we are on DU after all) and wonder if a personal experience could account for it.

[former9thward]

7. Who is stopping you from posting those stories?

You can post just like the other poster did. The poster in the OP did not post his own reporting.

[Hortensis]

9. "The only effective answer to organized greed is organized labor."

Very apt for these times. Greedy ultrawealthy people are spending vast, vast sums of money and have created many large political action organizations to prevent the resurgence of collective bargaining.

But how about these below? You know, MLK really valued unions. The flip side to that of course is one of the reasons some are so hostile to them. They raise whole peoples in more ways than one.

The labor movement did not diminish the strength of the nation but enlarged it. By raising the living standards of millions, labor miraculously created a market for industry and lifted the whole nation to undreamed of levels of production. Those who attack labor forget these simple truths, but history remembers them.

The labor movement was the principal force that transformed misery and despair into hope and progress. Out of its bold struggles, economic and social reform gave birth to unemployment insurance, old-age pensions, government relief for the destitute and, above all, new wage levels that meant not mere survival but a tolerable life. The captains of industry did not lead this transformation; they resisted it until they were overcome. When in the thirties the wave of union organization crested over the nation, it carried to secure shores not only itself but the whole society.

MARTIN LUTHER KING, JR.

The glory days of the "real" America as we imagine it were also the days of strong labor rights.

[former9thward]

8. About your comment concerning manufacturing.

If people do not want manufacturing back they are not going to get the pay and benefits that manufacturing jobs give. People get paid because they add value to the workplace product. In the service sector the value that is added is very little and so pay is not great. In manufacturing workers add a great deal of value as the raw material flows though the workplace and and the finished product comes out at the end. So they get good pay.

Can unions help? Yes, they can depending on the workplace. But this is not the 1930s anymore. Last week there was a big union election involving the UAW at a auto plant in Mississippi. 80% of the workers were African American. The union lost by a 2-1 margin after years of organizing. Why? Entry level at the plant was $24 a hour.

[Hortensis]

10. Clever move, wasn't it? A modest middle class wage for

a small group who had a big vote coming up.

You should realize, the threat of UNIONIZATION helped get them that.

Doubt that? What's entry level wage at the chain restaurants these fortunate few can afford to have lunch at? Local supermarket, big boxes, other factories in the same area?

[former9thward]

13. Again, those are service sector and retail jobs.

They will never ever pay like manufacturing no matter what unions are involved.

This is a link to the Bureau of Labor Statistics. https://www.bls.gov/news.release/empsit.t19.htm

Notice that weekly pay for manufacturing is $1092

Weekly pay for retail is $564

Weekly pay for Leisure and hospitality is $404.

[Hortensis]

14. You have to be kidding. The issue is value contributed by labor.

Why would a forklift driver at Walmart be paid a fraction of what a forklift driver at a factory COULD be (by far most are badly paid)? Or materials flow specialists for either?

EXCEPT for the fact that labor at one factory is helped by the threat of unionization and most others today are lone sheep hoping the wolves will take out someone else.

Walmart, btw, is one of our planet's 10 wealthiest corporations. All the others are private or state owned oil companies and auto manufacturers.

[MichMan]

11. Living in the Detroit area, this has been a major news story for a few weeks

Living in the Detroit area, this has been a major news story for a few weeks with updates and more indictments daily. The corruption was with multiple members of both FCA and the UAW. Anything having to do with the auto industry is front page news here on a daily basis.

I would think a news story regarding the affect of this combined corruption on the contracts with the Rank & File was important enough to share.

I, for one, think corruption and stealing by both management and union execs is something that needs to be exposed, and shouldn't be tolerated. The ones who pay a price for this are the hard working people that are employed by FCA.

[Hortensis]

12. Okay.

[MichMan]

15. People pay union dues with the expectation that their leaders are on their side

The article posted is about high ranking company and union officials colluding to steal millions and possibly screwing over the UAW rank & file in contract negotiations while doing so.

People pay union dues with the expectation that the leaders conducting the negotiations are looking out for the best interests of the members, not lining their own pockets. The evidence must be very damning because reports indicate many indicted so far are pleading guilty.

I would think the vast majority of DU members would be on the side of the union members in this instance

[Hortensis]

16. You've been following this. Please post some perspective

and context.

I'll kick it off with a bit I picked up: AP says "conspired to divert over $4.5 million in NTC funds intended for UAW member training and education." Over some years.

Please don't accuse me of condoning corruption. Corruption bad! It's been uncovered and all involved will lose their jobs, or have, and will go to prison. The Justice Department and FBI are on it.

But for perspective, how damaging is this corruption? Are outraged UAW workers finally considering voting to get out of the union? Are the various problems you've been posting about the UAW and unions in general finally just too much and coming to a head in Detroit?

Or are the UAW members angry about this but clinging ferociously to their unionized jobs? They do drive past a Walmart very often, some twice a day... No chance of forgetting what's out there.

[MichMan]

18. May have affected the UAW Nissan election results

This story first broke a week or so before the UAW Nissan election in Mississippi. While the results against representation were pretty lopsided, this had to have some effect on the vote.

The UAW top leadership were quick to respond that no UAW funds were stolen, but adamantly denied that any negotiations were compromised. Given the number of high ranking officials involved and their responsibilities, those statements seemed somewhat premature. Some of the quoted rank & file were not very pleased with some provisions of the contract, and were suspicious of the cozy relationships. The linked story just broke this morning with the FCA exec at the top of the scandal perhaps suggesting that it was intended to affect bargaining. This is a major news story here in Detroit and much more will be uncovered in the weeks ahead. Each newspaper here has multiple stories every day, so hard to not follow this story

I wouldn't expect significant erosion in members leaving the UAW, but I imagine there will be some. I would expect however, that there will be more UAW officials charged and that most likely will result in a big shake up in the leadership ranks. The real problem, is that the lingering perception outside Detroit, will be that union officials are much more interested in personal gain than in representing their members. That will have repercussions for awhile with future union drives in all types of places.

[Hortensis]

19. Yes. I'd guess anti-unionists made the most of this story,

and even far more than the most.

The whole thing is a shame, both meanings of the word.

Speaking of perspective, though, I wish people would remember that wherever humans are involved things will happen. There's plenty of this stuff going on in big private corporations, but aside from the relative few who read those articles that actually make business sections, who notices? Plus, by far most corruption within private industry never makes the news. Bad for stock prices.

[lostnfound]

17. Wicked on both sides. But extremes of wealth provides nurturing environment for corruption.

This is terrible and there needs to be consequences.
The prevalence of corruption is also a sad side effect of living in an economy where honest work isn't rewarded but there are rivers of money available to those who prop up a corrupt system.

How do we create a society where we can truthfully encourage our children that hard work and honest principles are the path to success?

[Hortensis]

20. Well, these corrupt ones are on the rich side of the divide.

Lol. They wanted to increase the wealth inequality, and now they're going to have assets seized and learn what prison's like.

Nothing new about corruption. You are right, of course, that poverty is corrupting of some--not everyone has the character to react honorably to adversity, much less be strengthened by it.

[not fooled]

21. Decades of

weakening unions and emboldening the capitalists helped create the climate in which this corruption occurred.

As part of that sorry history, unions have been collaborating with management, via overt corruption or not, for a long time. And, often the unions have had no legitimate option, so I'm not just dumping on them here. When jobs become fungible commodities that can readily be shipped overseas, the unions feel that they have to settle for less or have their jobs face elimination.

The end result of decades of destroying the union movement in the U.S. And propagandizing the populace so effectively that many if not most 'Muricans believe they are better off without unions. As their wages and benefits decline. The real root problem is a capitalist economic system that controls the policies of this nation and can automate or move the jobs overseas--the ultimate negotiating position. See: lectures of Dr. Richard Wolff.

[MichMan]

22. Union declines caused officials to steal to buy luxury items? nt

[not fooled]

23. No

I'm not excusing the actions reported here. Just pointing out that the union movement has been in bed with management in many ways especially since raygun began destroying unions in earnest.

[nitpicker]

24. Link to the latest (related) DoJ Detroit PR

https://www.justice.gov/usao-edmi/pr/former-uaw-official-charged-scheme-accept-illegal-payments-fiat-chrysler-automobiles

[nitpicker]

25. And link to an earlier DoJ PR

https://www.justice.gov/usao-edmi/pr/former-fca-executive-pleads-guilty-scheme-pay-uaw-officials

[nitpicker]

26. And link to the Doj PR on Iacobelli's indictment

https://www.justice.gov/usao-edmi/pr/former-fca-executive-and-wife-former-uaw-vice-president-charged-scheme-pay-uaw