A former official from the United Auto Workers has been indicted by a federal grand jury in Detroit for criminal violations of federal labor statutes for taking bribes from Fiat Chrysler Automobiles N.V.
Virdell King, 65, of Detroit, Michigan, a former assistant director of the union’s Chrysler Department, was charged Friday with taking part in a multiyear conspiracy for UAW officials to accept money and things of value from Fiat Chrysler Automobiles U.S. between 2011 and 2015, the U.S. Department of Justice said in court documents filed in Detroit.
The money came from a UAW-FCA training fund controlled by the Fiat Chrysler Automobiles labor relations staff and violated the Federal Labor Management Relations Act – Landrum Griffin – of 1958, which was drafted to prevent union officials from taking money and gifts from third parties outside the union.
UAW President Dennis Williams emphasized the union was cooperating with the ongoing federal investigation, which earlier this month may have cost the union a chance to organize workers at a Nissan plant in Canton, Mississippi.
(FCA analyst pleads guilty in UAW scandal. For the story, Click Here.)
“We are disheartened by the misconduct alleged in today’s indictment. Ms. King is no longer with the union and hasn’t been since February 2016. Based on our own internal investigation, we believe anyone who engaged in intentional misconduct is no longer employed by the UAW. We continue to cooperate with the DOJ and share information with the government,” said Williams.
Williams said earlier this month that the union overhauled its internal procedures after being notified of the federal probe in January 2016. The changes included putting new curbs on the use of credit cards issued by the joint fund at Chrysler, union officials said.
The Federal indictment charged King with accepting thousands of dollars in designer shoes, clothing, jewelry, luggage and other personal items, all purchased using credit cards issued by the UAW-Chrysler National Training Center.
Court documents said FCA vice president Alphonse Iacobelli told senior UAW officials that they could use their NTC credit cards to make personal purchases, stating “if you see something you want, feel free to buy it.”
Iacobelli, who quit FCA in June 2015, was indicted last month for siphoning off more than $1 million dollars from the NTC for his own personal use. The money was allegedly used for improvements to Iacobelli’s Rochester Hills home and the purchase of a Ferrari and a $37,000 Mont Blanc pen.
Beyond the purchases for herself, the superseding Information filed by the Justice Department charged King with making more than $40,000 worth of additional purchases between December 2012 and August 2015 at the direction and for the benefit of other senior UAW officials.
Those additional purchases included a shotgun, golf equipment, luggage, concert tickets, theme park tickets and other personal items. All of the credit card purchases were paid for with funds provided by FCA.
(For our initial report on the indictments, Click Here.)
The shotgun was gifted to Norwood Jewel, a current member of the UAW’s executive board. Jewel, however, after discovering the gun was purchased with NTC funds he reimbursed the money, the union said in a statement last week.
“He heard through the grapevine it was purchased with NTC funds and investigated,” said one senior union official, who asked not to be identified because he was not authorized to speak publicly.
The gift to Jewel was made after former UAW president Bob King had complained in 2013 both to union colleagues and to FCA about the abuse of NTC by the late General Holiefield, a former member of the UAW executive board and head of the union’s Chrysler Department and his wife Monica Morgan, who was also indicted last month. Iacobelli allegedly gave Morgan more than $400,000 in training center funds to pay off the mortgage on a home in Macomb County she had once shared with Holiefield.
After forcing out one of Holiefield’s top assistants, Bob King also succeeded in pushing Holiefield into retirement during a closed-door caucus meeting prior to stepping as UAW president in June 2014, when he was replaced by Dennis Williams.
But King, one of Holiefield’s top lieutenants over the years, stayed on as an assistant director of the UAW’s Chrysler Department, when Jewel became the director of the department in 2014. King was also a member of the UAW bargaining team that negotiated with FCA in 2015, according to federal court documents, and continued to use credit cards for purchases that the DOJ said court papers were improper. She retired in 2016 shortly after the Department of Justice notified the union of the ongoing corruption probe.
“This conspiracy among several union and corporate officials to abuse their positions for personal gains at the expense of hard-working Chrysler employees is highly alarming,” said Ian Burg, Director of the Office of Labor-Management Standards (OLMS) Detroit-Milwaukee District Office.
“Years of fraud and corruption within a select group of the FCA and UAW hierarchy continue to be eroded through the diligence and collaboration of law enforcement in the Detroit metropolitan area, said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI.
(Marchionne hints FCA may sue former labor chief over alleged $2.2 million theft. Click Here for the story.)
FCA has said it was cooperating with federal probe and has dismissed Iacobelli and one other executive company officials cited in the original indictment. Sergio Marchionne, FCA chief executive officer, also has raised the possibility of going to court to reclaim the money allegedly stolen by Iacobelli and other implicated in the scandal.