Scandal threatens UAW solidarity

on Feb5

Jewell: Plea deal alludes to ex-VP.

DETROIT — The UAW’s cornerstone principle of solidarity among its membership is under growing pressure as a federal corruption investigation widens and more details emerge about the luxuries purchased with millions of dollars intended to train workers.

Three rank-and-file members sued the union in January, seeking hundreds of millions of dollars for what they claim was collusion with Fiat Chrysler Automobiles. Separately, former UAW Vice President Norwood Jewell, who oversaw 2015 contract negotiations, became implicated in the scandal.

The latest revelations come with Monica Morgan, the widow of former UAW Vice President General Holiefield, expected to plead guilty this week to reduced charges in Detroit federal court. That could allow authorities to move forward with actions against more players in the $4.5 million scheme.

Jewell, who abruptly retired at the end of last year, has not been formally named or charged with any crimes.

A plea deal released Jan. 22 between the U.S. Attorney’s Office and former FCA US labor relations chief Alphons Iacobelli alludes to Jewell but does not name him directly. It also identifies a charity run by Jewell as one of several to receive restricted funds.

“It’s bad. If you have that level of leadership being implicated, it’s not welcomed news for the union and not good for other organizing efforts,” said Art Wheaton, a labor expert with the Worker Institute at Cornell University. “All it takes is for a couple of people to get indicted and everybody gets painted with the same bad brush.”

Prosecutors say the money was siphoned through the UAW-Chrysler National Training Center, which is funded by FCA and jointly operated with the union.

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Iacobelli approved more than $30,000 of the funds, according to his plea deal, for a 2014 party — reportedly in Jewell’s honor — that included “ultra-premium liquor,” $7,000 in cigars and $3,000 worth of wine bottles with custom labels.

Federal officials conducted a search of Jewell’s home late last year, a source familiar with the investigation told Automotive News.

Attempts to reach Jewell last week were unsuccessful. An individual who answered the Ohio phone number listed for Jewell’s charity said he “can’t help” with any questions.

A UAW spokesman declined to comment directly on the implications, and FCA officials did not respond.

The UAW announced in November that Jewell, 60, would retire and not seek re-election — an unusual, if not unprecedented, occurrence. UAW officers younger than the mandatory retirement age of 65 typically seek re-election and step down only at the end of a term, which would have been in June for Jewell.

Iacobelli, according to his plea deal, admits that he and other FCA executives and employees transferred hundreds of thousands of dollars “in prohibited payments” to charities controlled by UAW officials, including Jewell’s Making Our Children Smile Foundation and Holiefield’s Leave the Light On Foundation.

Prosecutors contend that FCA employees and executives, including Iacobelli, paid union workers through the charities and other methods, including training-center credit cards, to influence union business, including collective bargaining negotiations in 2011 and 2015.

Morgan’s plea

Holiefield’s widow, Morgan, a prominent Detroit photographer, would be the last of the four people charged so far in connection to the investigation to plead guilty. She is expected to plead guilty to one count of filing a false tax return, according to two sources with knowledge of the investigation. Morgan was indicted on five charges, including conspiracy to violate the Labor Relations Act.

Officials said Holiefield, who died in 2015, and Morgan used training-center money to buy first-class airfare, jewelry, designer clothing and furniture, in addition to paying off the $262,000 balance on the mortgage for their suburban Detroit home.

Peter Henning, a Wayne State University law professor and former federal prosecutor, said prosecutors likely agreed to the lesser charges based on Morgan being just a recipient of the money as opposed to “a decision maker.”

“It’s a way to resolve the case against her,” he said. “She’s not a bystander, but she’s not a central player.”

Others charged, in addition to Morgan and Iacobelli, were Virdell King, a retired UAW associate director, and Jerome Durden, a former FCA financial analyst who was treasurer of Holiefield’s charity and controller of the UAW-Chrysler training center.

Iacobelli, King and Durden are awaiting sentencing.

Rank-and-file lawsuit

The lawsuit accusing UAW and FCA officials of collusion which seeks class-action status, was filed Jan. 26 in U.S. District Court in Detroit. The three FCA employees say they are representing thousands of other union members.

“There’s very good sworn evidence that the two sides that are supposed to be opposing each other are actually in cahoots,” Raymond Sterling, the plaintiffs’ attorney, told Automotive News. “The UAW membership has placed its trust into its bargaining reps, only to find out they sold out to the other side. Imagine how they feel.”

In a Jan. 26 letter to union members, UAW President Dennis Williams said, “There is simply no truth to the claim that this misconduct compromised the negotiation of our collective bargaining agreement or had any impact on union funds.”

One of the plaintiffs, Brian Keller, started a GoFundMe page to raise money for legal fees, collecting more than $4,400 by the end of last week.

Keller is part of a group that has proposed an alternative slate of officer candidates to those nominated in November by UAW leadership.

Michael Martinez contributed to this report.



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