Fiat Chrysler to Plead Guilty, Pay $30 Million to Resolve US Criminal Labor Probe

January 27, 2021 Updated: January 27, 2021

WASHINGTON—Fiat Chrysler reached an agreement to settle a criminal probe by U.S. prosecutors into alleged illegal payments to now-former United Auto Workers (UAW) officials by former company employees.

Fiat Chrysler, which is now part of Stellantis NV said it had agreed to plead guilty to a single count of conspiracy to violate the Labor Management Relations Act and pay a $30 million fine. The automaker has also agreed to have an independent compliance monitor for three years.

A Justice Department court filing said people acting in Fiat Chrysler’s interest “willfully paid and delivered, more than $3.5 million in prohibited payments and things of value” to UAW officials.

The documents cited payments made by Fiat Chrysler’s then lead labor negotiator, Alphons Jacobelli, to UAW officials. Jacobelli left the company; he pleaded guilty and his prison sentence was reduced earlier this month to four years for his “significant cooperation” with the investigation.

U.S. Attorney Matthew Schneider in Detroit will offer more details later on Wednesday but his office confirmed Fiat Chrysler “agreed to plead guilty and pay a $30 million fine.”

Last month, the UAW agreed to independent oversight to resolve the corruption investigation that ensnared two former UAW presidents.

Schneider said the UAW had paid back over $15 million for improperly billing Ford Motor Co and Fiat Chrysler for employing members who did not work at the training centers operated by the union and the companies.

Schneider’s office charged 15 former UAW officials as part of its investigation, and former presidents Gary Jones and Dennis Williams both pleaded guilty to embezzling union funds.

Several UAW officers, including the two former UAW presidents, admitted embezzling millions of dollars in total for their personal benefit, using the funds to purchase expensive liquor and cigars and to pay for golf outings and related equipment, and expensive hotel stays.

The UAW represents about 400,000 U.S. workers, including workers at Detroit’s Big Three automakers and in other fields. At its peak in 1979, the union had a membership of some 1.5 million.

The investigation inquiry led to rival automaker General Motors Co filing a lawsuit against Fiat Chrysler last year, accusing the Italian-American company’s executives of bribing UAW officials to secure labor agreements that put GM at a disadvantage.

A federal judge in Detroit in July dismissed GM’s lawsuit that Fiat Chrysler had called “meritless.” GM has asked a federal appeals court to reinstate the lawsuit.

By David Shepardson