FCA training funds used for UAW exec’s pricey '14 party

Detroit — Fiat Chrysler Automobiles NV executive Alphons Iacobelli approved spending more than $30,000 in worker training funds on a party for former UAW Vice President Norwood Jewell, a bash that included “ultra-premium” liquor and strolling models who lit labor leaders’ cigars, The Detroit News has learned.

The training funds covered the $7,000 cigar purchase and a $3,000 tab for wine in bottles with custom labels that featured Jewell’s name, sources told The News. The party is described by federal prosecutors as an example of a cozy relationship between the automaker and UAW leaders designed to corrupt the bargaining process and implementation of a contract for thousands of workers.

The News learned new details about the party Thursday and discovered that Jewell and his former administrative assistant, Nancy Johnson, have hired prominent, white-collar defense lawyers amid a widening federal investigation. Jewell, 60, of Davison has hired Chicago attorney Joseph Duffy, whose client list includes a former adviser to Illinois Gov. Rod Blagojevich, while Johnson has hired Detroit lawyer Harold Gurewitz, who defended ex-Detroit Mayor Kwame Kilpatrick.

The party, meanwhile, was detailed in Iacobelli’s plea deal with federal prosecutors last week that offered new allegations about more than $1.5 million in illegal benefits paid to UAW leaders and employees to influence negotiations in the automaker’s favor. Jewell is not identified by name in the plea deal but multiple sources confirmed the party was held in his honor in August 2014, less than a year before the start of contract negotiations and more than a year before the UAW reached a tentative deal with the automaker that its members ultimately rejected.

Prosecutors also alleged that an unnamed Fiat Chrysler executive gave a custom-made Italian watch to Jewell’s predecessor, the late General Holiefield, in February 2010. The government likely disclosed the party and the Italian watch in a strategic move to pressure Jewell and the unnamed Fiat Chrysler executive, said Wayne State University law professor and former federal prosecutor Peter Henning.

“This is a way of turning up the pressure a little bit more,” Henning said. “Does it mean they will be charged? Not necessarily. But it may be a way to get them to come in and cooperate.”

Jewell’s lawyer did not respond to messages seeking comment Thursday. Gurewitz declined comment.

It is unclear whether UAW member dues are being spent on lawyers for the defense of Jewell and Johnson. The union has liability insurance and officers are able to purchase insurance for legal matters.

Iacobelli was fired amid the FBI investigation in June 2015 and Johnson retired in fall 2016.

UAW President Dennis Williams has defended the sanctity of the union’s bargaining process. In a letter to UAW members last month, Williams wrote “there is simply no truth to the claim that this misconduct compromised the negotiation of our collective bargaining agreement or had any impact on union funds.”

The party outlined in Iacobelli’s plea deal was in August 2014 at the UAW-Chrysler World Class Manufacturing Academy in Warren. The bash served as Jewell’s coming-out party two months after he was elected to lead the union’s Fiat Chrysler department.

The party is the latest allegation in a corruption investigation that has expanded to include a former member of General Motors Co.’s board and UAW training centers funded by all three Detroit automakers.

The News first reported that Jewell received a $2,180 shotgun in 2015 paid for with money that was supposed to benefit blue-collar UAW workers. Jewell later reimbursed the jointly operated UAW-FCA National Training Center in 2016 after learning the shotgun was purchased with a training center credit card.

The News previously reported that former UAW official Virdell King was told to buy the shotgun by Johnson in August 2015, according to sources familiar with the investigation.

The party in August 2014 happened a year before Jewell received the shotgun.

The News also has learned that Jewell has reimbursed the training center for additional items purchased with the training center’s credit card. The amount Jewell reimbursed was unclear Thursday and a UAW spokesman declined comment.

Jewell’s former top administrative assistant also factors into the federal investigation.

Johnson, 57, of Macomb Township has not been charged with a crime and is not identified by name in federal court records that described events surrounding the shotgun purchase. Instead, prosecutors refer to “UAW-4” as a senior labor official in the Chrysler department.

In March 2015, “UAW-4” used a training center credit card to buy Christian Louboutin shoes that cost more than $1,000. The stiletto pumps with blood-red soles are popular among celebrities and wealthy fashionistas.

“UAW-4” encouraged King to buy a pair, too, according to federal court records. King later used her training center card and spent more than $1,000 on her own pair, prosecutors said.

“UAW-4” made more than $75,000 worth of purchases on a training center credit card from 2014 to 2016, according to the government.

Iacobelli sanctioned UAW leaders using training center credit cards for personal expenses in a bid to keep senior UAW officials “fat, dumb and happy” amid contract negotiations, according to the government.

After The News reported about the shotgun and the widening investigation, the UAW announced in November that Jewell would retire Jan. 1, roughly six months before the scheduled end of his current term.

Another former high-ranking union leader, GM board member Joe Ashton, abruptly resigned late last year after The News linked him to the corruption investigation.

Ashton’s name first emerged last fall as investigators started issuing subpoenas for information about training centers financed by GM and Ford.

Investigators are interested in Ashton, a retired UAW vice president appointed to GM’s board of directors in 2014, and Cindy Estrada, his successor in charge of the union’s GM department, according to sources familiar with the investigation.

The investigation focuses on whether training funds were misappropriated, and if labor leaders at GM and Ford received money or benefits through their tax-exempt nonprofits.

Jewell’s nonprofit is identified in the Iacobelli plea deal. Iacobelli admitted helping transfer hundreds of thousands of dollars in illegal payments from Fiat Chrysler to tax-exempt nonprofits controlled by UAW officials, including Jewell’s Making Our Children Smile Foundation.

The illegal payments were funneled through the UAW-FCA training center, according to Iacobelli’s plea deal.

Three people — Iacobelli, King and former FCA financial analyst Jerome Durden — have pleaded guilty for their roles in the corruption scandal.

Holiefield’s widow, Monica Morgan-Holiefield, is scheduled to plead guilty Tuesday in federal court.

Prosecutors say Morgan-Holiefield and her late husband received more than $1.2 million in illegal payments, which were spent on jewelry, furniture and paying off the $262,219 mortgage on their Harrison Township home.

rsnell@detnews.com

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Twitter: @robertsnellnews