Fiat Chrysler Automobiles CEO Sergio Marchionne spoke out angrily about the scam allegedly hatched by its former labor chief and three others to steal $2.2 million in labor training funds.
Describing the case as a “most egregious breach of trust,” Marchionne said FCA was considering filing a lawsuit aimed at recovering some of that money from former labor chief Al Iacobelli. The 57-year-old Iacobelli was named in a federal indictment handed down Wednesday, along with Jerome Dunden, a one-time financial analyst for the automaker. The scheme also appears to have involved a former executive with the United Auto Workers Union. Now deceased, General Holiefield’s widow was also charged by the government.
Echoing comments made by UAW President Dennis Williams, Marchionne sent a note to FCA employees on Thursday “expressing my disgust at the conduct alleged in the indictment which constitutes the most egregious breach of trust by the individuals involved.”
The filing of indictments by the U.S. Justice Department helped fill in gaps left open by the sudden decision to step down from the UAW by Holiefield shortly before he died in 2015 of pancreatic cancer. At the time, it was believed he had taken a leave of absence after accidentally shooting his wife Monica Morgan in 2014.
(For our initial report on the indictments, Click Here.)
While the indictment outlines Holiefield’s role in the scam, he was not indicted. Morgan was, and government documents indicate Iacobelli provided payments of $1.2 million to various co-conspirators between 2009 and 2014. That includes designer clothing, jewelry, further and $262,219 towards the mortgage on the suburban Detroit home Morgan and Holiefield shared.
For his part, Iacobelli reportedly used his share of the loot to buy a 2013 Ferrari 458 Spider, lease a private jet and even purchase two solid gold Mont Blanc pens, each costing $37,500.
The “indictment exposes a disturbing criminal collaboration that was ongoing for years between high ranking officials of FCA and the UAW,” said David P. Gelios, special agent in charge of the Detroit Division of the FBI, in a statement.
The money that the defendants allegedly stole was intended for use by an independent worker training venture that is jointly run by FCA and the UAW.
(Despite some problems, FCA doubled Q2 earnings. Click Here for the story.)
For his part, Iacobelli served as head of labor negotiations between FCA and the UAW during the time the scheme allegedly took place. But he abruptly and unexpectedly left the automaker just before the launch of contract talks in 2015 – about the time the scheme reportedly came to light. Holiefield served as the union’s chief for labor relations with Chrysler prior to his departure.
FCA provided a copy of Marchionne’s letter to TheDetroitBureau.com, and it repeated what was said in a company statement issued Wednesday asserting that the automaker knew nothing about the scheme.
“These acts were of course neither known nor sanctioned by FCA US,” Marchionne said in his letter to employees. “In fact, upon learning of some possible malfeasance in June 2015, the Company investigated and, once credible evidence of wrongdoing was discovered, the individuals involved were immediately separated from the company.”
For his own part, UAW President Williams decried the scheme as “a betrayal of trust by a former member of our union.” Williams advised the UAW’s rank-and-file that the money allegedly taken by the defendants did not come from member dues, “nor were they union funds.”
Until he left the company in 2015, Durden had served in FCA’s corporate accounting department and as controller of the UAW-Chrysler National Training Center.
(What’s gone wrong with Jeep? And can it be fixed? Click Here for the story.)