Fiat Chrysler pays $ 30 million to settle federal corruption investigation

UAW President Rory Gamble (left) and US attorney Matthew Schneider announce a settlement agreement to end a year-long corruption investigation into the union on December 14, 2020 in Detroit.

Michael Wayland / CNBC

DETROIT – Stellantis, formerly Fiat Chrysler, has agreed to pay $ 30 million in a plea to resolve a criminal investigation into collusion and bribery of union officials by former executives of the company’s North American operations.

The deal, announced Wednesday by the Detroit federal prosecutor, ends a multi-year federal investigation into Fiat Chrysler and the United Auto Workers union. Prosecutors announced a separate plea deal with the UAW last month.

It is currently unclear when Stellantis will pay the fine, as the deal is pending approval from the U.S. federal court.

Under the contract, the company agreed to plead guilty to a single conspiracy to violate the Labor Relations Act.

Matthew Schneider, The U.S. attorney for the Eastern District of Michigan said Fiat Chrysler executives plotted to make illegal gifts and payments to UAW officials in excess of $ 3.5 million. These included paying a former union leader a $ 262,000 mortgage and using credit cards paid for by companies for lavish dinners and travel, including personal purchases.

“This proposed resolution ensures that the FCA will be held accountable for its actions, the actions of its leaders,” he said at a media event on Wednesday. “This resolution is also intended to ensure that similar criminal behavior does not recur.”

Schneider declined several times to comment on whether prosecutors found that the late Fiat Chrysler CEO Sergio Marchionne was involved in or was aware of the corruption.

The agreement also provides for the company to commission an independent compliance monitor for three years. According to the company, this person will, among other things, monitor the dissolution of a training facility in the middle of the probe.

The investigation has resulted in the convictions of 15 people, including two former UAW presidents, three Fiat Chrysler executives and a former General Motors board member who was a union leader. The prison sentences for those involved ranged from 60 days to 6½ years. A handful of people are still waiting to be sentenced.

When the union’s federal investigation was published in July 2017, it focused on the training center jointly run by the UAW and Fiat Chrysler. But it was quickly expanded to perform similar operations on GM and Ford Motor.

Schneider, who will step down from his position with effect from Feb. 1, said Wednesday an investigation against Ford is still ongoing and he re-affirmed GM is no longer a target. Ford didn’t immediately comment on the probe.

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