General Motors has filed an amended complaint in its federal lawsuit against Fiat Chrysler Automobiles, saying it has uncovered new evidence in recent days showing that FCA had set up back accounts in multiple countries to handle bribes to insure the silence of key executives and the cooperation of key union officers.
GM said in its lawsuit that former UAW presidents Dennis Williams and Ron Gettelfinger as well as former UAW vice president General Holiefield were given cash payments to aid FCA in its efforts to harm GM and drive up its labor costs as part of a scheme first hatched by the late Sergio Marchionne more than a decade ago.
The new charges are contained in a 124-page affidavit filed in U.S. District Court in Detroit in an effort to revive a lawsuit that a federal judge dismissed last month “with prejudice.” They were supported by additional affidavits from three lawyers, employed by GM, who said private investigators uncovered the existence of foreign bank accounts in past couple of weeks.
The investigators uncovered evidence that FCA had paid hush money to three executive employees – Alphons Iacobelli, James Durden and Michael Brown – swept up in a federal corruption investigation that uncovered that training money from the company had been used to pay off UAW officers and officials by setting up secret bank accounts in Switzerland, Luxembourg, Liechtenstein, Italy, Singapore, the Cayman Islands and Panama.
Williams and Gettelfinger have not been charged in the federal probe. Gettelfinger has never before been mentioned in the investigation but GM alleges in the affidavit he was given money through a secret bank account in Panama.
However, a dozen other individuals associated with the UAW as well as Holiefield’s widow have been charged by the U.S. Department of Justice, according to GM, which also said Iacobelli spied for FCA after being hired by GM and former UAW Vice President and GM board member Joe Ashton, leaked secret information to Marchionne.
“By gaining, control over the FCA-UAW Control Enterprise through this pattern of racketeering activity, Control Defendants directly damaged GM by having the UAW negotiate and structure collective bargaining agreements and take positions and enter into contracts and understandings that directly harmed GM as alleged herein, and by directing the implementation of various aspects of the CBAs as described above,” GM’s affidavit said.
After formal discovery was denied, as part of its ongoing investigation into the harm caused to GM through the bribery scheme, FCA executives had admitted as well as new facts revealed in the government’s investigation, in mid-April 2020, GM, through outside counsel, retained and began working with third-party investigators to assist in GM’s investigation.
“Certain of these third parties, all of whom have significant credentials supporting their investigative expertise, recently discovered reliable information indicating the existence of foreign accounts potentially connected to the scheme alleged in GM’s Complaint,” GM said in a court filing.
Specifically, only within the last 10 days did we obtain sufficiently reliable information concerning the existence of foreign bank accounts by various individuals previously and currently employed by FCA and former UAW Presidents and officers to allege in a public filing as stated in the First Amended Complaint the scope and significance of the foreign accounts.
Despite reasonable diligence in investigating GM’s claim, GM was previously unable to discover this evidence because it sought to obtain banking information through formal discovery which the court did not permit to proceed until after the Defendants’ Motion to Dismiss was resolved.
GM, through counsel, needed to identify a reputable investigative firm that could reliably obtain this information, which took several months especially given COVID limitations, GM said its petition to re-open the case.
The original case was filed in November, and GM still has the opportunity to appeal Judge Paul Borman’s order to dismiss the case.
The FCA-UAW bribery scheme is much broader and deeper than previously suspected or revealed as it involved FCA Group apparently using various accounts in foreign countries to control corrupt individuals by compensating and corrupting those centrally involved in the scheme to harm GM.
GM also said Fiat, the Italian automaker that acquired Chrysler, has a history of using bribery and corruption in pursuit of corporate goals.
Fiat and its leadership were caught in a vast political corruption scandal known as Kickback City during the 1990s. This scandal arose from the discovery that Fiat was paying billions of lire in bribes to government officials in return for public-work contracts and other political favors. Rather than owning up to its role in the scandal, from the outset Fiat attempted to use its own economic clout to shield the company from blame or responsibility, GM said.
FCA, which so far has bested GM in court, denied any wrongdoing.
“As we have said from the date the original lawsuit was filed, it is meritless. The court agreed and dismissed GM’s complaint with prejudice. FCA will continue to defend itself vigorously and pursue all available remedies in response to GM’s attempts to resurrect this groundless lawsuit,” FCA said in a statement.
Meanwhile, the UAW, which has been battered by scandal for the past three years, issued a general statement saying it would like to see the evidence supporting the existence of the secret bank accounts.
“The UAW is unaware of any allegations regarding illicit off-shore accounts as claimed this morning by GM “on information and belief”, nor has the U.S. Attorney’s Office, or anyone else, ever raised this type of allegation with the UAW. If GM actually has substantive information supporting its allegations, we ask that they provide it to us so we can take all appropriate actions. If any such payments were made or such bank accounts exist, it would obviously be a gross violation of the law, the UAW Constitution, and the oath and responsibilities of anyone in UAW leadership.