Fiat Chrysler Pays $30 Million to Settle U.S. Labor-Corruption Probe

(Bloomberg) -- Fiat Chrysler Automobiles NV, which merged with French rival PSA Group earlier this month to form Stellantis NV, has agreed to pay a $30 million fine to settle a corruption probe targeting its U.S. operations.

Fiat Chrysler said Wednesday it agreed to plead guilty to one count of conspiracy for violating the Labor Management Relations Act and implement an independent compliance monitor for three years as it dissolves a Detroit training facility at the heart of the corruption. The company also will adopt stricter internal controls. The agreement, which is subject to court approval, signals the completion of the federal probe of the automaker, FCA said.

Read More: Highest-Ranked UAW Official Yet Charged in U.S. Fiat Scandal

More than $3.5 million was funneled from the training center to union officials starting in 2009, prosecutors alleged. United Auto Workers union leaders received credit cards and lavish gifts, including golf trips, designer clothing, furniture and jewelry, as part of a plan to keep them “fat, dumb, and happy,” according to legal documents. Fiat Chrysler executives, including a former labor negotiator, also took advantage of the scheme.

More than a dozen people have been convicted or pleaded guilty in a sweeping probe of embezzlement and illegal payoffs to union officials, including former UAW presidents Dennis Williams and Gary Jones. Last month, as part of a deal with prosecutors, the UAW agreed to the six-year appointment of a independent monitor to handle internal investigations of corruption allegations and administer disciplinary actions.

General Motors Co. filed a federal racketeering lawsuit against Fiat Chrysler in late 2019, alleging payoffs to UAW leaders from 2009 to 2015 secured advantages in labor agreements with Fiat Chrysler that were denied to rival automakers, costing GM billions of dollars.

GM alleges the payments also were designed to engineer a merger between the two companies. Former Fiat Chrysler Chief Executive Officer Sergio Marchionne had pursued such a deal for years before his death in July 2018. He was repeatedly rebuffed by GM CEO Mary Barra. The lawsuit was thrown out last year by a federal judge and GM is appealing that decision.

The case is US v FCA LLC, 21-cr-20031, U.S. District Court, Eastern District of Michigan.

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