Fiat Chrysler Pleads Guilty in Union Bribery Scheme

Issue 60

03.01.21 - Fiat Chrysler has pleaded guilty to charges that it conspired with company executives to make illegal, extravagant gifts to United Auto Workers Union leaders and undermined workers’ confidence in collective bargaining.

The U.S. unit of the Italian-American automaker, which is now part of Stellantis NV, said in January that it had reached an agreement with U.S. prosecutors to plead guilty to one count of conspiracy to violate the Labor Management Relations Act and pay a $30 million fine.  U.S. District Judge Paul Borman said at a court hearing he accepted Fiat Chrysler’s guilty plea and set a June 21 sentencing date.  Fiat Chrysler also agreed to three years of probation and oversight by an independent compliance monitor to ensure it adheres to federal labor laws.

The Justice Department said Fiat Chrysler conspired to make more than $3.5 million in illegal payments to then-UAW officers from 2009 through 2016.  In December, the UAW agreed to independent oversight to resolve the corruption investigation, which ensnared two former UAW presidents.  Federal prosecutors in Detroit charged 15 former UAW officials as part of its on-going investigation, and former union presidents Gary Jones and Dennis Williams both pleaded guilty to embezzling union funds. Williams is scheduled to be sentenced April 16.

Several UAW officers, including the two former UAW presidents, have admitted to embezzling millions of dollars in total for personal benefit to fund their lifestyles, using funds to purchase expensive liquor and cigars, and to pay for golf outings and related equipment, as well as expensive hotel stays.

The investigation led rival automaker General Motors to sue Fiat Chrysler last year, accusing company executives of bribing UAW officials to secure labor agreements that put GM at a competitive disadvantage.
Borman in July dismissed GM’s lawsuit, which Fiat Chrysler then called “meritless.”

On Thursday, a federal appeals court will hear GM’s effort to revive the old lawsuit. In January, GM said Fiat Chrysler had finally admitted: “After years of denials - that it engaged in a longstanding pattern of corruption.”

Source: Reuters