The former head of the United Auto Workers’ unit representing workers at Fiat Chrysler Automobiles NV department was charged by federal prosecutors in Detroit with conspiracy to violate the Labor Management Relations Act, becoming the highest-ranked union official yet caught up in the investigation.
Norwood Jewell is the latest former UAW or company official charged by the U.S. over allegations that starting in 2009 or earlier, millions of dollars were funneled from the Fiat Chrysler Automobiles training center to union leaders to buy labor peace. Three former FCA executives and three former UAW officials have pleaded guilty, as has the widow of the prior head of the union’s FCA unit.
Jewell is in discussions with prosecutors “towards a fair and just resolution,” of the case, his attorney, Michael Manley, said. “We are confident that when the facts of the case come out as it relates to Mr. Jewell, his decades-long reputation of honorable service to members of the UAW will remain intact.”
Automakers and the UAW are gearing up for new labor negotiations this year. Contracts covering more than 150,000 U.S. hourly workers at General Motors Co., Ford Motor Co. and Fiat Chrysler expire Sept. 15 and talks are expected to officially begin this summer. In a shot across the bow of auto executives, the UAW said last week it will increase strike pay for workers.
The Department of Justice claims union leaders received credit cards and lavish gifts, including golf trips, designer clothing, furniture and jewelry, as part of a plan to keep senior UAW officials “ fat, dumb, and happy,” according to legal documents. Fiat Chrysler executives also took advantage of the scheme for their personal benefit.
Al Iacobelli, who led U.S. labor relations for the automaker until June 2015, was charged with taking more than $1.2 million from the training center, buying a Ferrari and leasing a private jet. In August, he was sentenced to 5 1/2 years for his involvement in the misuse of training center funds. At a sentencing hearing in December, the government strongly hinted that its investigation is continuing and additional indictments may be coming.
The fact that prosecutors filed charges against Jewell without going through a grand jury suggests that he’s cooperating in order to get a more lenient sentence, said Peter Henning, law professor at Wayne State University and a former federal prosecutor. He said the allegation that FCA executives conspired with the company and the UAW, as well as with individual union officials, is a sign the government is looking for evidence of more systematic corruption.
“When they start talking about the company and the union conspiring, that’s more than just a few individuals,” Henning said. “Whether they can ever prove that is a different issue.”
UAW officials have denied the scandal compromised collective bargaining agreements with Fiat Chrysler. “We have already implemented many reforms and enacted new policies to prevent any misuse of funds at the joint program centers from ever happening again,” the UAW said on March 18.
For its part, the automaker also said it neither knew about nor sanctioned the illicit payments.
“FCA US firmly restates that it was a victim of illegal conduct by certain rogue individuals who formerly held leadership roles at the National Training Center,” an FCA spokeswoman said on March 18. “The conduct of these individuals -- for their personal enrichment and neither at the direction nor for the benefit of the company -- had no impact on the collective bargaining process.”
Jewell joined an ongoing conspiracy in 2014 after his election as vice president of the union, the U.S. said in court papers Monday. As head of the union’s FCA unit, he was a chairman of the National Training Center’s Joint Activities Board and helped oversee payments from the center. He was also on the UAW’s national negotiating committee for the last labor contract with FCA in 2015, the U.S. said.
The U.S. alleges that Jewell used his National Training Center credit card, or authorized another official to use hers, to charge the costs of multiple expensive dinners at steakhouses in California and Michigan, with the center using FCA funds to pay the bills. Jewell charged $7,569.55 for one meal in January 2015 at LT’s Prime Steakhouse in Palm Springs, California, the U.S. said.
By Margaret Cronin Fisk and Gabrielle Coppola