FIAT-FCA, 111 years under trial: since Italian bribes until UAW’s unions corruptions and ties with Brasilian military dictatorship


by Fabio Giuseppe Carlo Carisio for VT Italy

John Elkann was appointed to drive Fiat by his grandfather Giovanni Agnelli but now he finds himself with the company involved in an international scandal such as the size of Fiat Crysler Automobiles, the American giant born in 2014 with administrative headquarters in the Netherlands and fiscal in the Kingdom United that in Italy it preserves only a few establishments and an ancient blazon now tainted by a century of judicial investigations and convictions for corruption. The first to get into trouble, in fact, was his great-great-grandfather 111 years ago. But he escaped condemnation like all his descendants…

Jaki, nickname of Elkann, thunders official announcements against General Motors that has filed a 6.5 billion dollar lawsuit against FCA competitors for a conspiracy perpetrated in illicit agreements between managers of the Fiat-Crysler group and the main US automotive union United Automobile Workers (UAW) and blames the legal action as it brings up former CEO Sergio Marchionne who, dead in 2018, cannot defend himself.

Former Fiat Crysler CEO Sergio Marchionne (left), dead on July, 2018, togheter the FCA president John Elkann

The TG LA7 of Enrico Mentana, where the journalist Lilli Gruber works, the only Italian in the Bilderberg Steering Committee together with the same FCA president, emphasizes the indignation minimizing the resignation of the UAW president Gary Jones who had already taken a period of leave after the enlargement of the scandal that may sweep to other union’s officials.

Not only. Few of the mainstream Italian media recall that, due to this conspiracy in union agreements aimed at favoring FCA penalizing GM, as many as four US managers of the Italian-American group have already been sentenced, including Fiat Vice President Chrysler Automobiles US LLC (FCA), Alphons Iacobelli, as reported by the US Department of Labor on its official website in connection with the judgment of the Eastern Michigan District Court of November 2018.

This umpteenth scandal on the most famous automobile company on the italian peninsula is an opportunity to reconstruct a century of investigations and processes from which the Agnelli-Elkann families have been increasingly powerful. Now, however, some nodes are coming to a head not only in the US but also in Brazil where an investigation is trying to shed light on the occult relations created with the military dictatorship to avoid union problems by the former Fabbrica Italiana Automobili Torino, founded by the fascist senator Giovanni Agnelli (1886-1945 ). But let’s start with the latest facts and then go back in time …



«The U.S. District Court for the Eastern District of Michigan has sentenced three defendants as part of an ongoing criminal investigation into a multi-year scheme in which Fiat Chrysler Automobiles US LLC (FCA) executives made payoffs to senior United Automobile Workers International Union (UAW) officials involved in collective bargaining agreements between the union and the company» wrote Us Department of Labor official website.

«All three defendants – Michael Brown, Jerome Durden, and Keith Mickens –­ pleaded guilty to crimes related to a conspiracy to direct millions of dollars in prohibited payments to themselves and their co-conspirators in violation of the Labor Management Relations Act (LMRA). The November 7, 2018, sentencing continues an ongoing investigation by the U.S. Department of Labor’s Office of Labor Management Standards (OLMS) Detroit-Milwaukee District Office, the Department of Labor’s Office of Inspector General, the FBI, and the IRS» adds DoL.

“Protecting members against corruption perpetrated by their union leaders is critical to the mission of the U.S. Department of Labor’s Office of Labor Management Standards” said OLMS Director Thomas Murray, in the Detroit-Milwaukee District office. “These convictions leave no question as to the agency’s commitment to seek justice when anyone abuses their union position for personal financial gain. We place a high priority on combatting financial malfeasance and safeguarding financial integrity in labor unions.”

Brown – former director for employee relations at Fiat Chrysler from 2009 to 2016 – pleaded guilty to one count of misprision of a felony, and the court sentenced him to 12 months of imprisonment and a $10,000 fine. Brown admitted that he knew FCA executives committed a felony when they authorized and made prohibited payments and provided things of value to UAW officers and employees; that he failed to notify the authorities of the criminal activities as soon as possible and deliberately took actions to conceal the crime by misleading a federal grand jury.

Durden – formerly employed in FCA’s corporate accounting department and the one-time controller of the UAW-Chrysler National Training Center (NTC) – pleaded guilty to one count of conspiracy to defraud the U.S. and one count of failure to file a tax return. The court sentenced Durden to 15 months of imprisonment and restitution of $8,811.16. Between 2009 and 2015, Durden conspired with other defendants to use two tax-exempt organizations – NTC and the Leave the Light on Foundation – to direct millions of dollars in illegal payments to senior UAW officials.

Alphons Iacobelli, former vice president of FCA in the USA, sentenced to 5 years and 6 months for various crimes

Mickens – the third highest union official in the UAW’s Chrysler Department – pleaded guilty to conspiracy to violate the LMRA by knowingly accepting payments, money and things of value from persons acting in the interest of FCA and facilitating over $700,000 in illegal payments from Fiat Chrysler to other senior UAW officials. The court sentenced him to 12 months of imprisonment and a $10,000 fine.

Brown, Durden, and Mickens are the latest defendants sentenced in the ongoing criminal investigation into illegal payoffs to UAW officials. Two more defendants – Virdell King and Nancy Johnson, both UAW officials – have pleaded guilty and will be sentenced on November 13 and November 19, 2018, respectively.

The former vice president of the American union UAW General Holifield with the Fiat Crysler’s former CEO Sergio Marchionne in Detroit before their untimely death

«In August 2018, the court sentenced Alphons Iacobelli – former FCA vice president – to 66 months in prison and 2 years of supervised release based on the conspiracy to pay over $1.5 million in illegal payments to UAW officials and to evade taxes, and ordered him to pay $853,522 in restitution for the tax charge, a $10,000 fine, and a $100 special assessment – wrote DoL’s website – In July 2018, the court sentenced Monica Morgan – wife of deceased General Holiefield, former Vice President of the UAW in command of the Chrysler Department – to 18 months in prison and ordered her to pay $190,747 in restitution for tax fraud in connection with the receipt of illegal payments by her husband».

Here ends the official statement of the US Department of Labor. But the scandal seems destined to widen again and is overwhelming the leaders of the United Automobile Workers.



Thursday, September 12, 2019, the director of the UAW Region 5, Vance Pearson, 58, of St. Charles, Missouri, a member of the union’s highest board of directors, was arrested by Federal Bureau of Investigation agents. As reported by the CNBC website, federal prosecutors accuse him of misappropriation of union funds, money laundering, aiding and abetting, conspiracy, mail and wire fraud and filing and maintaining false trade union relations in the government.

Leaders of the UAW American union Gary Jones and Vance Pearson on a golf cart

Pearson, 58, of St. Charles, Missouri, was charged of embezzlement of union funds, money laundering, aiding and abetting, conspiracy, mail and wire fraud, and filing and maintaining false union reports to the government. He’s the 10th person to be charged as part of the Department of Justice’s four-year investigation, which has led to convictions of nine officials affiliated with the union or Fiat Chrysler.

The UAW, in an emailed statement, said the “allegations are very concerning, we strongly believe that the government has misconstrued any number of facts and emphasize that these are merely allegations, not proof of wrongdoing.” The union added it will not let the newest charges or Pearson’s arrest “distract” officials from ongoing contract negotiations with General Motors, which it chose last week to lead the contract talks over Ford Motor and Fiat Chrysler.

GM instead said in a statement: “GM is outraged and deeply concerned by the conduct of union officials as uncovered by the government’s investigation and the expanding charges revealed today. These serious allegations represent a stunning abuse of power and trust. There is no excuse for union officials to enrich themselves at the expense of the union membership they represent.”

A luxurious villa with pool in Palm Srings, in the Sonoran desert, in southern California, a tourist area famous for its spas, wellness centers and golf courses

During the investigations the FBI investigators discovered the good life of the trade unionists: villas with pool for rent in Palm Springs paid by the union for much longer periods of their conferences and thousands of dollars in clubs and golf clothes, bottles of fine liquors , expensive cigars, humidifiers …

Pearson, who joined the UAW in 1981, succeeded Jones as director of UAW Region 5. It is the largest geographic region of the union, spanning 17 Western and Southwestern states, from Missouri, Arkansas and Louisiana to California, Washington, Alaska and Hawaii.

But in recent days even Gary Jones himself resigned as president of the UAW after his house was searched in September (without any charge to him) and the lawsuit filed by General Motors against Fiat Crysler, right in the public domain, became public. crucial moment of its merger with the PSA group of Peugeot.

This is why FCA has declared itself “amazed at the contents and timing” judging GM’s legal action as an attempt to sabotage the agreement. But the investigation dates back to July 2017 when it developed around a training center in Detroit jointly managed by the UAW and Fiat Crysler.

In the lawsuit, GM accuses FCA of having committed to carrying out a corruption plan that “undermined the integrity of the collective bargaining process and caused substantial damage to GM”, explains the car manufacturer led by Mary Barra. “We aim to achieve substantial damage” and the funds the company will recover will be invested in the United States for the benefit of GM employees and job creation, explains Craig Glidden, the builder’s legal manager.

In addition, the legal action of the US company pointed the finger at the late CEO Sergio Marchionne, defined as a “central figure” in the scheme of bribes paid by Fca to some Uaw keaders to weaken GM and pave the way for a marriage with Fiat Chrysler.



But it is not only this investigation that sees the Fiat group overseas. In recent months, another scandal in Latin America came to light.

«The federal prosecutor of the state of Minas Gerais, in Brazil, started a civil investigation to investigate the collaboration of the Brazilian factory of Fiat with the civil-military dictatorship (1964-1985) and on the violations of human rights committed against the workers at the ‘era. The survey will be conducted for the next four months by the regional prosecutor for citizens’ rights, “writes Janaina César in an article for the Rights Observatory last June.

Students held in the General Severiano stadium – Foto: Arquivo Fotografico do Arquivo Nacional

“In October 1978, Fiat found itself on the eve of its first strike. The workers organized themselves in secret for fear of military repression. Years ago, the Brazilian military government had guaranteed that the company would not have had these types of problems”.

Thus began the 145 Espiões survey (145 spies), published by The Intercept Brasil site on February 25th. The report denounced how Fiat had set in motion a clandestine espionage network led by Joffre Mario Klein, a colonel in the Brazilian army reserve, in collaboration with the political police. The intention was to persecute political dissidents and annihilate the trade union movement that was organized in the factory at the end of the 1970s.

The dictatorship was established in Brazil on March 31, 1964, when the military overthrew the government of President João Goulart to begin what would be the darkest period in the country’s history. For twenty years the military persecuted, kidnapped, tortured and murdered political dissidents.

The prosecutor’s office was based on a journalistic investigation to open the file. In the text the prosecutor Tarcísio Henriques Filho, head of the investigation, highlighted part of the final report of the National Commission for Truth (CNV), for which «the workers and their trade union movement were the primary objective of the 1964 coup».

Fiat is the second company to be investigated by the Brazilian prosecutor for violation of human rights committed during the years of lead in the South American country. The first complaint was launched in 2015 against Volkswagen. The German car company admitted his guilt two years later.



If we go back to Italy we discover, however, that the history of the Turin car manufacturer is full of judicial inquiries for various crimes that in most cases ended with the acquittal of the defendants or even convicts like the former president Cesare Romiti, pardoned by a retroactive political law. The automotive “Tangentopoli (BriberyCity)” is one of the very important tranches of the “Mani Pulite (Clean Hands)” period that in Italy led the Milan prosecutor to make a massacre of corrupted industrialists, businewssmen, DC and PSI politicians, saving almost all the PCI communists and most of the leftists of the same Christian Democrats then merged into the Democratic Party that governs Italy today.


This is well explained by an interesting report by Chiara Ruffino on the portal “ADIR – The other right” in which she dedicates two chapters to the judicial saga of Romiti and the Fiat group, starting from the accusations of bribes paid to obtain public works up to confessions and resounding admission of the president Giovanni Agnelli (1921-2003), namesake and nephew of the founder.

Cesare Romiti with Gianni Agnelli, both presidents of Fiat in differents period

«Just eighty days after the arrest of Mario Chiesa, Maurizio Prada, president of ATM and regent secretary of the Milanese DC, is arrested on charges of extortion. When questioned by the prosecutor Antonio Di Pietro, he reveals the names of the most generous companies with the parties. Four companies of the Fiat group appear in the list: Iveco, Fisia, Fiat Ferroviaria Savigliano and Cogefar Impresit. Prada recalls, in particular, that the Turin company had paid bribes to obtain the contract for the third line of the Milan subway (1.8 billion), for the railway bypass (1.2 billion) and for the construction of a parking lot ” it would be interminable to summarize five years of investigations, confessions, trials and sentences.



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