U.S. probe into UAW training center funds extends to GM, Ford

By David Shepardson

WASHINGTON (Reuters) – General Motors Co <GM.N> and Ford Motor Co <F.N> confirmed Thursday they are cooperating with an expanded Justice Department probe into alleged misspending at United Auto Workers union training centers funded by U.S. automakers.

The investigation became public in July, when federal prosecutors accused a former Fiat Chrysler Automobiles NV <FCHA.MI> vice president of making $1.2 million in improper payments to a former union vice president and his wife. Four people have been charged in the Fiat Chrysler probe.

The Detroit News reported on Thursday that prosecutors issued subpoenas about training centers financed by GM and Ford and said investigators are looking at charities operated by senior union officials at the companies.

“We are cooperating with the inquiry,” Ford spokeswoman Kelli Felker said.

General Motors is conducting an internal investigation into the matter. “We are fully cooperating with the investigation,” GM spokesman Pat Morrissey said.

The National Training Center (NTC) is a separate entity from the UAW that receives no union dues, but the alleged abuses “dishonored the union and the values we have upheld for more than 80 years,” the union said in July.

Ford added that it is “confident in the UAW-Ford National Programs Center leadership team.”

The investigation into union leaders and executives at Fiat Chrysler has resulted in charges against the company’s former vice president of employee relations, Alphons Iacobelli. He was charged with making $1.2 million in improper payments to a former union vice president and his wife. Iacobelli has pleaded not guilty.

The government also charged that Jerome Durden, a former Fiat Chrysler official, conspired to divert over $4.5 million in training center funds intended to pay for training for union members. Durden pleaded guilty on Aug. 8 to conspiracy and preparing false tax returns and faces up to 37 months in prison under a plea deal.

Virdell King, 65, of Detroit, a former UAW official responsible for negotiating the contract between Fiat Chrysler and the union, pleaded guilty in August to violating labor law.

The head of the Detroit FBI, David Gelios, has said “years of fraud and corruption within a select group of the FCA and UAW hierarchy continue to be eroded through the diligence and collaboration of law enforcement.”

Fiat Chrysler Chief Executive Sergio Marchionne in a statement said the “deplorable” conduct “had nothing whatsoever to do with the collective bargaining process” and the “egregious acts were neither known to nor sanctioned by (Fiat Chrysler).”

(Reporting by David Shepardson; Editing by Cynthia Osterman)