Fiat Chrysler announced today that it has reached an agreement with U.S. prosecutors over a criminal probe into alleged illegal payments to former UAW officials.
The automaker will pay a $30 million fine and has agreed to plead guilty to a single count of conspiracy to violate the Labor Management Relations Act, according to Reuters. It has also agreed to submit itself to an independent compliance monitor for three years.
The United Auto Workers, meanwhile, last month agreed to independent oversight to resolve its part in the criminal probe. Two former UAW presidents have also pleaded guilty to embezzling millions and 15 former UAW officials were charged as part of this investigation.
The scandal has been going on for nearly five years and has ensnared FCA officials, too, such as its labor relations chief Alphons Iacobelli. He pleaded to federal charges of conspiracy to violate the Labor Management Relations Act in 2018 and was sentenced to 66 months in jail.
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In a 14-page memorandum Iacobelli wrote at the time, he outlined why FCA engaged in the conspiracy.
“FCA sought to obtain benefits, concessions, and advantages in the negotiation and administration of collective bargaining agreements with the UAW in an effort to buy labor peace,” Iacobelli wrote. “High-level officials of the UAW sought to enrich themselves and live lavish lifestyles rather than zealously work on behalf of the best interests of tens of thousands of rank and file members of their union.”
The UAW represents around 400,000 workers in the US. Its members work for FCA, as well as Ford and GM. Indeed, GM sued FCA over this investigation, accusing it of bribing UAW members to secure labor agreements that would put GM at a disadvantage. The case was thrown out, though.
What may be frustrating for union members is that even though the case essentially boils down to a successful attempt on FCA’s part to earn an illegal advantage, the UAW still has to deal with the fallout and a damaged reputation and will have to work to convince its members that it has their best interest at heart.