UAW Vice President Charged in Chrysler Scandal; Pleads Guilty

For a while, Norwood Jewell managed to avoid prosecution in the Fiat Chrysler-United Auto Workers pay-to-play scandal that so far has produced over a half-dozen convictions. But his run of good luck has ended. Yesterday, April 2, Jewell, a UAW vice president until last year, pleaded guilty in Detroit federal court to spending anywhere from $40,000 to $70,000 from funds stolen from the Chrysler-funded National Training Center. He had been charged on March 18. His offenses were part of a wide-ranging probe into a years-long pattern of bribery and embezzlement involving an estimated $4.5 million in NTC funds. Jewell is set for sentencing in August. The latest charges loom especially significant given that the UAW’s current contract with Chrysler, General Motors and Ford expires in September.

Union Corruption Update has described this investigation on numerous occasions since the initial indictments came down in July 2017. Certain officials at the Auburn Hills, Mich.-based Chrysler and the Detroit-based United Auto Workers had been enriching themselves at the expense of National Training Center (NTC), located in suburban Warren, Mich. The conspiracy, which had been going on for several years, went into high gear in mid-2015 during collective bargaining sessions. The central character was former Chrysler Vice President Alfons “Al” Iacobelli, who bribed UAW officials with NTC funds in the hopes that they would drop potentially costly contract demands. This sort of quid pro quo is illegal under the Labor Management Relations Act of 1947, better known as the Taft-Hartley Act.

As it turned out, the arrangement did not affect negotiations. Yet it was illegal all the same. And it created opportunities for pilferage from National Training Center that did occur. Besides Jewell, seven persons – three from Chrysler, three from the union, and the wife of a deceased UAW vice president – thus far had been convicted and punished. Former Vice President Iacobelli provided UAW officers with at least $1.5 million in cash and other things of value, and embezzled large sums from NTC coffers to pad his lavish lifestyle until his departure in June 2015. Now 59, he was sentenced last August to five and a half years in prison, and ordered to pay more than $800,000 in restitution. The two other convicted former Chrysler officials were financial analyst Jerome Durden and employee relations director Michael Brown. The three convicted union representatives were Virdell King, Nancy Johnson and Keith Mickens. A seventh person, Monica Morgan, wife of late UAW Vice President General Holiefield, was convicted and sentenced for tax evasion related to her diverting her husband’s illicit gains toward a pair of businesses and a nonprofit group.

General Holiefield, the most noteworthy convicted union offender, died of natural causes in March 2015, thus avoiding the eventual federal dragnet. His successor, Norwood Jewell, is alive, but now perhaps wishes he wasn’t. According to federal prosecutors, Jewell, who headed the United Auto Workers’ Fiat Chrysler department from 2014 until his retirement in January 2018, used National Training Center payoffs during much of his tenure for purposes unconnected to union business. As the union’s top person for negotiating and administering collective bargaining agreements and as chairman of NTC’s Joint Activities Board, he proved easily compromised. Jewell, indicated as “UAW-3” in charging documents, retired soon after the Detroit News ran a story revealing that federal agents had raided his home.

The arrangement would be rewarding for a while. Norwood Jewell’s indulgences included expensive dinners and golf outings in Detroit, Palm Springs and elsewhere with a National Training Center credit card. During the period January 9, 2015-July 14, 2015 alone, he racked up separate restaurant tabs of $7,569, $1,267, $4,587, $6,200, $7,694 and $6,912. Other unauthorized purchases at NTC expense included golf equipment, a shotgun, luggage, concert tickets, theme park tickets and a $30,000 party that featured strolling models who lit attendees’ cigars. Starting in July 2017 with the original wave of indictments, his prosecution, in hindsight, was virtually inevitable. Jewell would be charged on March 18, and he pleaded guilty on April 2. To his credit, he owned up to his wrongdoing at his plea hearing. “Really, what that means is Chrysler was paying for it,” he said. “I was getting stuff directed to myself from Chrysler, and I wasn’t supposed to be doing that.”

Officials at the United Auto Workers officials are contrite and determined to move ahead. Immediately following the Justice Department charges in March, the union issued this statement: “We are deeply saddened by today’s news of criminal filings and understand the frustrations our members feel when allegations like this are made about a former officer. 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, and we will continue to vigilantly review our practices to make sure any lax financial records are identified and fixed going forward.” Fiat Chrysler likewise is distancing itself from the scandal. It announced in the wake of the charges against Jewell that the company was “a victim of illegal conduct by certain rogue individuals” whose actions were “neither at the direction nor for the benefit of the company.”

This is an awkward time for this to be happening. The current four-year contract between the union and the Big Three automakers expires in mid-September, with collective bargaining sessions beginning several weeks prior to that. About 150,000 hourly workers would be affected. The last thing the United Auto Workers needs is a cloud of scandal hanging over its head. UAW President Gary Jones, who took over from Dennis Williams last June, is vowing to play hardball with a “bargaining strategy that puts the auto companies on the defensive.” He’s seeking increased strike benefits, a shorter duration for workers to reach the top of the pay scale, increased starting wages and reduced reliance on temporary employees. Whether the union achieves these and other objectives depends in part on how far it puts the Fiat Chrysler scandal in its rear-view mirror.