United Auto Workers Officials Charged in $4.5 Million Funds Corruption Scandal

Last week, Federal prosecutors shed a little more light on a several years-long conspiracy involving many auto industry executives and labor leaders and their raids of worker training funds, which they used to purchase luxury items such as a $1,000 pair of Christian Louboutin shoes, various pieces of expensive jewelry, and even a shotgun valued at nearly $2,200.

The investigation into the $4.5 million corruption scandal deepened further when prosecutors chose to charge a fourth person involved with two pillars of the auto industry: Fiat Chrysler Automobiles and the United Auto Workers. The investigation alleges that very high-ranking leaders within both the FCA and the UAW—all with six-figure salaries—who conspired to dip into this multi-million-dollar fund.

For one, the former UAW labor executive Virdell King, 65, of Detroit, was charaged in a federal court with accepting thousands of dollars in illegal payments. King, who is also the first black woman to head up a local UAW-Chrysler union, served at one point on the UAW-Chrysler National Training Center’s governing board, is now expected to help the government to prosecute many others who were involved in the scandal.

The case against King came about only three weeks after a federal grand jury had indicted former FCA executive Alphons Iacobelli and the widow of former UAW Vice President General Holifield, Monica Morgan-Holiefield.   Altogether, the allegations regarding misuse of the training center funds could, obviously, hurt the UAW’s reputation and, possibly, its organizing activities, explains Autotrader senior analyst Michelle Krebs.

She dictates: “Clearly something needs to give in terms of financial oversight, because how this went on is quite stunning. And if I were a union member I would be extremely unhappy that funds are being improperly used.”

Iacobelli confided sanctioning the use of training center cards for the purpose of personal expenses as an attempt to keep senior UAW leaders “fat, dumb and happy,” as described in a court filing; one that raises questions, of course, about the sanctity of the labor deals in the union’s early history.

Accordingly, UAW President Dennis Williams, said on Friday, in a statement Friday, he was “disheartened by the misconduct alleged in today’s indictment.”

He adds, “Ms. King is no longer with the union and hasn’t been since February 2016. Based on our own internal investigation, we believe anyone who engaged in intentional misconduct is no longer employed by the UAW. We continue to cooperate with the DOJ and share information with the government.”

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