GM alleges Fiat Chrysler spent millions to bribe UAW leaders

Michigan
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DETROIT (AP) — General Motors is asking a federal judge to reconsider his dismissal of a lawsuit against Fiat Chrysler based on new allegations that FCA bribed union and GM officials with millions stashed in secret foreign bank accounts.

GM alleges that bribes were paid to former United Auto Workers Presidents Dennis Williams and Ron Gettelfinger, as well as Vice President Joe Ashton. It also alleges that bribes were paid to GM employees including Al Iacobelli, a former FCA labor negotiator who was hired and later released by GM.

The allegations were made in a court motion filed Monday by GM, which wants to revive the lawsuit that was dismissed in July.

GM alleges that payments were made so the officials would saddle GM with more than $1 billion in additional labor costs.

GM’s motion contends that payments were made to accounts in places like Switzerland, Luxembourg, Italy, Singapore and the Cayman Islands. The accounts were set up to avoid detection in a federal criminal probe of the union, according to the lawsuit.

Ashton, a former GM board member, is scheduled to be sentenced Aug. 18 in the federal corruption probe. Iacobelli is serving prison time. Williams’ California home was raided by federal agents but he has not been charged. Gettelfinger has not been named in federal documents. He could not immediately be reached for comment Monday.

UAW spokesman Brian Rothenberg and Fiat Chrysler said they could not immediately comment.

The accusation is the first against Gettelfinger in the wide-ranging UAW bribery and embezzlement scandal that so far has snared 10 union officials. Some spent thousands in union money for golf, lodging and fancy meals.

GM alleges in the court records that FCA bribed Gettelfinger, Williams, Ashton and former Vice President General Holiefield “by granting those individuals control over foreign financial accounts with substantial funds.”

Gettelfinger, who was union president after Fiat took over Chrysler in 2009, helped to make sure Holiefield and Williams kept their union leadership posts “in order to preserve and progress the conspiracy to harm GM,” the documents said. GM alleged that accounts “apparently exist” in Gettelfinger’s name, and the name of a relative in Panama and Switzerland.

“The existence and use of these foreign accounts have never come to light publicly and by their very design were intended to remain secretive from criminal investigation,” GM’s documents said. “This previously hidden network of accounts, utilized by defendants and controlled in part by individuals purportedly acting on GM’s behalf, reveals a magnitude of bribery and illegal activity specifically targeting GM that was not previously known or reasonably knowable.”

In July, U.S. District Judge Paul Borman in Detroit tossed out GM’s lawsuit that alleged that Fiat Chrysler paid off union leaders to get better contract terms than GM.

He wrote that GM’s alleged injuries were not caused by FCA violating federal racketeering laws, that GM had not stated a claim that could be granted, and that the people harmed by the bribery scheme were Fiat Chrysler workers.

In a 2019 lawsuit, GM alleged that Fiat Chrysler bribed officials of the United Auto Workers union to get lower labor costs, giving FCA an advantage over its Detroit-area rival. GM alleged that FCA CEO Sergio Marchionne wanted to pressure GM into merging by weakening GM with higher costs. Marchionne died in 2018.

Borman wrote in his ruling that GM’s “pay to harm” theory initially had appeal “but fails on a closer look.”

GM alleged that FCA used bribes to get the UAW to deny GM concessions that were given to Fiat Chrysler. But Borman wrote that the UAW wouldn’t give the concessions to any company that didn’t pay bribes. Therefore, GM’s labor costs weren’t any higher than they would have been without the bribes.

GM says in its new motion that Borman should alter or amend his order allowing GM to amend its complaint to present the new allegations.

Among the officials to plead guilty to federal charges in the scandal is former President Gary Jones, who was accused of conspiring with UAW associates to embezzle more than $1 million.

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