General Motors is suggesting that former UAW Vice President and ex-GM board member Joe Ashton was acting as a paid mole inside the company’s boardroom during 2015 contract bargaining as it seeks to revive its racketeering lawsuit against Fiat Chrysler Automobiles.
Adding potentially more intrigue in the long-running UAW corruption scandal, GM also claims in a court filing Monday that millions of dollars were stashed in offshore bank accounts in locations like the Cayman Islands, Switzerland, Luxembourg, Liechtenstein, Italy and Singapore and used to fuel a bribery scheme GM said was designed to harm it and force a merger with FCA.
The filing lists former UAW President Dennis Williams, saying he was one of the alleged beneficiaries of the offshore accounts, along with Ashton and the onetime lead labor negotiator for FCA, Alphons Iacobelli. Both Ashton and Iacobelli, who later went to work for GM and is a codefendant in the suit, have been convicted; Williams has been implicated in the corruption probe but not charged. He was listed as an unnamed UAW official in court records.
Ashton, who admitted conspiring to take bribes and kickbacks from vendors connected to the UAW-GM Center for Human Resources, is scheduled to be sentenced later this month. A message seeking comment was left with his attorney. Williams could not be reached for comment. Iacobelli is incarcerated in federal prison in Morgantown, West Virginia, with a release scheduled for 2023.
FCA, which has not been charged in the federal probe, has acknowledged that it has been in discussions with the Justice Department about a resolution of its long-running investigation, which burst into public view in 2017 with the indictments of Iacobelli and Monica Morgan, widow of the late UAW Vice President General Holiefield. Prosecutors have alleged that FCA, through an employee, “sought to corrupt and warp the labor-management relationship” to “buy labor peace.”
GM’s federal lawsuit was dismissed last month, but the automaker clearly hasn’t given up, and its new claims, should they be deemed credible, could raise the stakes for FCA and the union.
“New facts about the direct harm FCA caused GM have come to light and they are detailed in our amended racketeering complaint. These new facts warrant amending the court’s prior judgment, so we are respectfully asking the court to reinstate the case,” according to a statement provided by GM spokesman Jim Cain.
In November, GM sued FCA along with ex-FCA officials caught up in the corruption probe. FCA has offered a consistent defense to GM’s claims, reiterating that in a statement Monday.
“As we have said from the date the original lawsuit was filed, it is meritless. The court agreed and dismissed GM’s complaint with prejudice. FCA will continue to defend itself vigorously and pursue all available remedies in response to GM’s attempts to resurrect this groundless lawsuit,” according to the company statement provided by FCA spokeswoman Shawn Morgan.
U.S. District Judge Paul Borman at one point had ordered Mary Barra and Mike Manley, the CEOs of the two companies, to meet, which did not happen. Borman also called the case a waste of resources should it move forward. He also cited the need to heal the country in the wake of the George Floyd killing and the coronavirus pandemic.
The UAW, which saw ex-President Gary Jones among those convicted in the probe and is in negotiations with the U.S. Attorney’s Office on reforms, was not a defendant.
The union, through spokesman Brian Rothenberg, denied knowledge of any offshore accounts.
“The UAW is unaware of any allegations regarding illicit offshore accounts as claimed this morning by GM ‘on information and belief,’ nor has the U.S. Attorney’s Office, or anyone else, ever raised this type of allegation with the UAW. If GM actually has substantive information supporting its allegations, we ask that they provide it to us so we can take all appropriate actions,” the union said.
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GM said it was relying on newly discovered evidence supplied by investigators in its filing. Paperwork included with the filing noted that GM was limited in its efforts at discovery by the court and that only in the last 10 days did it obtain “sufficiently reliable information” to make allegations about the significance and scope of the foreign bank accounts.
“This newly discovered evidence gives rise to a far-more than-plausible inference that Ashton operated as a paid mole inside GM’s Boardroom during 2015 collective bargaining negotiations and FCA NV’s merger effort from his position as the UAW Trust nominee to GM’s Board, providing defendants confidential details about GM’s labor strategy and analysis of a potential merger so defendants could not only cause but maximize the harm to GM,” according to the filing.
But the GM documents also suggested an even wider scandal, claiming that “Fiat and its executives had been involved in what certain publications referred to as ‘Kickback City,’ ” where the company had allegedly used foreign accounts to pay politicians to obtain commercial contracts.
Erik Gordon, a law professor at the University of Michigan’s Ross School of Business, said GM’s new claims could prompt the judge to allow GM to resurrect the case.
“The judge may decide that he cut off the process too soon and should have let GM proceed with the discovery that might have quickly led to the sort of evidence GM claims it now has managed to get on its own. If GM’s new claims are accurate, and that remains to be seen, FCA and the UAW face big troubles. If the claims are true, you can see why FCA was so anxious to cut off the case without GM being able to dig deeper,” Gordon said.
Contact Eric D. Lawrence: elawrence@freepress.com. Follow him on Twitter: @_ericdlawrence.
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