The ‘Union’ and the Restless

Posted by Abby Streu on Monday, July 31st, 2017 at 3:31 pm - Permalink

Gold-Digging, Union-Style

By Abby Streu

If you happened to miss the latest episode of your favorite soap opera, don’t fret. The most recent scandal involving United Autoworkers (UAW) will provide you a drama-fix.

On July 26, 2017, Monica Morgan, the widow of late UAW vice president General Holiefield, was indicted for conspiring “to defraud the United States” and “violate the Labor Management Relations Act.” Alphons Iacobelli, a retired Fiat-Chrysler Automobiles executive, was also named in the indictment in a scheme involving funds diverted from a union training program.

In 1985, the Detroit-based UAW-Chrysler National Training Center (NTC) was created to provide training programs for automobile workers. Funding for the center came from Chrysler (ranging from $13 to $31 million each year). From 2009 to 2014, Iacobelli helped control the training center’s finances. During that time period, according to the indictment, Iacobelli and Holiefield were in charge of negotiating labor contracts between the Auburn Hills, Michigan Chrysler plant and the UAW.

According to the United States Department of Justice, Iacobelli wrote checks from the NTC out to Holiefield’s shadowy charity, the ‘Leave the Light on Foundation,’ which vaguely claimed to help struggling children. Holiefield then wrote checks from the Foundation out to his wife’s businesses, ‘Monica Morgan Photography’ and ‘Wilson’s Diversified Products.’

The indictment alleged that the entire debacle was an attempt to pay off Holiefield to grease negotiations in Chrysler’s favor. The payouts must have worked because according to ABC News, union workers at the Chrysler plant have lower salaries and fewer benefits than workers at Ford Motor and GM.

Iacobelli, not wanting to only pay off the union bigwig, decided to splurge on himself as well. The ex-Chrysler official dropped $350,000 on a Ferrari 458 Spider, two solid gold pens that cost nearly $40,000 each, the leasing of a private jet, and hundreds of thousands of dollars on a series of upgrades—a swimming pool, spa, new kitchen, etc.—for his $1.4 million man-cave in Rochester Hills, Michigan.

According to the New York Times, “Mr. Holiefield came under scrutiny inside the UAW in October 2013, when union officials began investigating hundreds of thousands of dollars in expenses and transfers linked to a union training center.” A few months later in June 2014, Holiefield retired, likely due to the allegations against him. According to the indictment, that very same month, the training center issued a $262,219 check to MMS Mortgage Services, which covered the full mortgage balance of the Holiefield residence.

In addition to having her mortgage paid-off, Ms. Morgan used the diverted funds to purchase numerous first-class plane tickets, designer clothing, and jewelry.

(In 2015, General Holiefield passed away from pancreatic cancer, but led a few exciting final years of his life. For instance, he was one of the negotiators that convinced the US Government to bail out Chrysler back in 2013, giving 41.5 percent ownership of the automobile company to the UAW. In 2014, he accidentally shot Morgan in the gut while cleaning a loaded gun. She survived the accident. He was let off on a misdemeanor.)

In total, over $1.2 million was syphoned off from the training center. On July 27, in a press release on the Union’s website, UAW President Dennis Williams condemned the actions of his former vice president. Chrysler executive Sergio Marchionne emailed a statement to Chrysler employees on July 27, calling this the “most egregious breach of trust,” and stated that the company is looking into a potential lawsuit against Iacobelli.

Chrysler gives money to the training center with the intent to improve the skills of their workers, and thus improve their overall productivity. Think about how many workers $1.2 million could have helped. And now it’s been spent on some pens and a sports car, among other luxury goods.

If you’re looking for a complicated way to get rich, take note of The Widow Morgan: marry a union negotiator who’s willing to take payouts from a car plant and direct the money through a “charity,” only to keep it for the two of you. And if you don’t want to stay with him forever, opt for the union negotiator with pancreatic cancer. Just try not to get shot in the process.

Or indicted.