The fallout from the Chrysler-United Auto Workers scandal continues. On November 7, two former executives of Fiat Chrysler Automobiles (FCA), Jerome Durden and Michael Brown, along with an ex-UAW official, Keith Mickens, were sentenced in Detroit federal court for their roles in a broad scheme in which representatives of the auto manufacturer bribed union negotiators to avoid raising key issues during contract negotiations a few years ago. They are the third, fourth and fifth defendants to be sentenced in the scandal, estimated at $4.5 million, which also involved embezzlement and income tax evasion. The latest actions, said U.S. Attorney Matthew Schneider, represent “further strides in our effort to root out corruption” at FCA and UAW.
Union Corruption Update has covered this pay-for-play scandal many times since it broke last July. The primary culprits were Chrysler Vice President Al Iacobelli, UAW Vice President General Holifield, and Holifield’s girlfriend and later wife, Monica Morgan. Iacobelli and certain company executives in 2015 had offered generous bribes to Holifield and other union officials if they agreed in turn to drop potentially costly demands during collective bargaining sessions. The monetary inducements, illegal under the Taft-Hartley Act, were drawn from the company-funded National Training Center (NTC). Iacobelli pleaded guilty in January, and was sentenced in August to 66 months in prison for conspiracy and tax fraud and ordered to pay more than $800,000 in restitution. Morgan pleaded guilty in February, and was sentenced in July to 18 months in prison for tax fraud and ordered to pay nearly $200,000 in restitution. Holifield died of natural causes in March 2015, well before the initial indictments came down in July 2017.
Two Fiat Chrysler executives, Jerome Durden and Michael Brown, were auxiliary players. Each now have received their just deserts in U.S. District Judge Paul Borman’s court. Durden, now 62, a resident of Rochester, Mich., was a former financial analyst for Fiat Chrysler and, more crucially, controller for National Training Center during 2008-15. During his tenure, say prosecutors, he submitted false tax returns on behalf of NTC and a charity controlled by General Holifield called the Leave the Light on Foundation. The purpose of the fraud was to conceal more than $1.5 million in bribes paid by Fiat Chrysler to Holifield and other three other union officials, Virdell King, Nancy Johnson and Keith Mickens. The bribes covered Holifield and his wife’s mortgage payments, travel, clothing, furniture, jewelry and other items. Durden was indicted last July for conspiracy to defraud the IRS, and pleaded guilty a month later. Last Wednesday, he received a sentence of 15 months in prison. Durden’s partner in crime, Michael Brown, director of employee relations at Chrysler during 2009-16, received a 12-month sentence for giving misleading and incomplete testimony to a federal grand jury. According to prosecutors, Brown, now 60, a resident of West Bloomfield, Mich., concealed the existence of the bribery conspiracy. He pleaded guilty this April.
Keith Mickens, the United Auto Workers representative, like Brown, received a 12-month prison sentence for his role in enabling union and corporate officials to receive illegal payments. Now 64, Mickens, a resident of Clarkston, Mich., for several years shared responsibilities with other union officials for administering collective bargaining agreements on behalf of members employed by Chrysler. He also served as co-director of National Training Center. According to prosecutors, he helped transfer more than $700,000 from Chrysler to former UAW Vice President General Holifield via two companies controlled by Holifield and Monica Morgan. In addition, he accepted thousands of dollars in company-paid clothing, electronics, golf equipment and other personal items. He pleaded guilty this April.
The most recent sentences follow a joint probe by the FBI, the IRS and the U.S. Labor Department’s Office of Labor-Management Standards and Office of Inspector General. Federal officials are confident that justice has been done. “Today’s sentencings of former FCA executives and a senior UAW official once again demonstrate that those who seek personal gain through deception and fraud will be brought to justice,” said Timothy Slater, Special Agent in Charge, Detroit Division of the FBI. Thomas Murray, district director for the U.S. Labor Department’s Office of Labor-Management Standards, likewise remarked: “Protecting members against corruption perpetrated by their union leaders is critical to the mission of the Office of Labor-Management Standards. OLMS thanks the United States Attorney’s Office for vigorously prosecuting those involved in the conspiracy.”