How feds say a Fiat Chrysler company man and a union negotiator teamed up to get rich – Detroit Free Press
Over a period of years, former Fiat Chrysler executive Al Iacobelli and former UAW Vice President General Holiefield helped to save Chrysler and then stole millions intended for worker training, authorities say.
General Holiefield was a larger-than-life union negotiator with a big smile who teamed up with a sharply dressed corporate executive at Fiat Chrysler Automobiles to siphon money into each other’s pockets, according to a 42-page grand jury indictment unsealed last week.
Holiefield, who died in March 2015, was a polarizing figure. At about 6-foot-3, he was nearly as broad as he was tall. He could be engaging and funny. He also could be blunt — a trait that came off as dismissive for many of the UAW members who came to distrust him.
Al Iacobelli, as Fiat Chrysler’s labor chief, was a high-ranking executive with a lot of power and influence who, like most corporate labor chiefs, worked hard to keep a low public profile.
Together, they formed a partnership that went beyond the negotiating table and are accused of leading what could scar the union for years to come — and, in the eyes of some workers, calls into question some of the deals cut between the company and the union.
Last week, Holiefield’s wife, Monica Morgan, along with Iacobelli and a Fiat Chrysler financial analyst, were indicted for conspiring to defraud the U.S. government and violating the National Labor Relations Act. Morgan was arraigned Monday in U.S. District Court in Detroit and Iacobelli is scheduled to be arraigned today.
Eight additional executives and UAW leaders are mentioned but not identified in the 42-page indictment, and more charges are expected, according to people familiar with the investigation.
While there were rumors for years about Holiefield’s ethics, multiple people interviewed by the Free Press were surprised that Iacobelli conspired with the union official to take money.
“The fact that a UAW vice president and a Fiat Chrysler VP were allegedly involved in this case is partly what makes it so unusual,” said Gary Klotz, a corporate labor attorney.
Jerry Dias, president of Unifor, the union that negotiated with Iacobelli for Canadian autoworker contracts, said he always viewed him as a professional labor executive.
“I’ve probably known Al for 15 years. … This is right out of left field. I never would have expected it,” Dias said. “I’m in shock, to say the least. … If, in fact, the allegations are correct, then it’s a huge betrayal.”
Friends of Holiefield, who also was active in civil rights circles, describe him as warm and caring.
“The General Holiefield that I knew was a gentle giant. He was very much in tune with the needs and the concerns and the cares of the working people,” said Wayne County Sheriff Benny Napoleon, who knew the former UAW VP for many years before his death in 2015. “He had a very kind and generous heart and was a very passionate person.”
While Holiefield and Iacobelli were supposed to be adversaries, they also had to work with each other to forge a relationship based on trust in order to get deals done. It’s a precarious relationship every labor negotiator must navigate.
“I think there is a danger for the UAW, or for any union, to get too friendly with company officials,” said Arthur Wheaton, director of the labor and environmental programs at Cornell University. “The membership will vote the union leadership out if they are seen as in bed with management.”
The relationship between Iacobelli and Holiefield not only crossed ethical boundaries, it crossed legal boundaries, according to a federal grand jury indictment unveiled last week. The two men devised ways to collectively pocket more than $2.2 million for themselves and, in Holiefield’s case, to funnel much of that money to his wife, Monica Morgan, the indictment says.
A journalist and photographer, Morgan promotes her experience in Africa photographing Nelson Mandela as a turning point in her career. In Detroit, Morgan can often be found at high-profile charity events, either as a photographer or as an attendee.
On Facebook, Morgan’s profile page has a smiling photo of her standing next to a helicopter, and holding a camera.
It says: “I’m living life through the lens…..#photography #international photojournalist.”
Holiefield, an acolyte of former UAW Vice President Nate Gooden, was elected vice president of the UAW on June 14, 2006, making him one of the six most powerful union officials at the time. In the UAW; elected officers serve four-year terms and are assigned one more department that they oversee.
Typically, UAW elected officials are given wide latitude to manage those departments with their own handpicked staff, or administrative assistants.
Holiefield has been a UAW member since 1973, when he went to work at Chrysler’s Jefferson Assembly Plant in Detroit. By 1975, he became active in local union leadership activities, civil rights and political activities. From there, he climbed up the union leadership ranks.
Iacobelli was named vice president of employee relations in July 2008, replacing John Franciosi, who retired.
That put the two men on the front lines when Chrysler hit rock bottom during the recession. In 2009, Holiefield and former UAW President Ron Gettelfinger worked side-by-side as the union negotiated with President Barack Obama’s automotive task force. The UAW helped persuade the government to provide assistance to Chrysler instead of allowing it to be liquidated.
“He knew Chrysler, in his words, ‘from the basement to the attic,’” Gettelfinger said at Holiefield’s funeral in March 2015. “And many, many times, General would say to me, ‘Chief, chief, I’ve got your back.’”
World Class Manufacturing
Holiefield even seemed to build a strong bond with Sergio Marchionne, Fiat Chrysler’s brash, sometimes surly CEO.
Holiefield said Marchionne told him in 2009 that Fiat was unwilling to acquire Chrysler if the UAW didn’t agree to embrace the manufacturing system.
“He said … ‘I’ve got to have (World Class Manufacturing),’” a system aimed at constant plant production improvements, Holiefield told the Free Press. “He said, ‘If I don’t have it, it’s a deal buster.’ “
So, Holiefield and Gettelfinger flew to Italy and visited five Fiat plants.
“We were all totally blown away with what we saw,” Holiefield said. “Even the machines that were old looked brand-new.”
Since then, Fiat Chrysler has introduced the manufacturing system and its principles at every Chrysler plant in North America.
In 2012, the company and the UAW celebrated the grand opening of the WCM Academy in Warren — a palatial training center designed to teach autoworkers how to work together better and how to come up with their own improvements to the assembly process.
“Under his leadership, General helped guide the company through one of the most difficult periods in its history,” Marchionne said after Holiefield died.
Iacobelli’s Italian roots
Iacobelli, whose mother emigrated from Italy, became fascinated with the labor-cost issues facing the automotive industry and earned a master’s degree in industrial relations at Wayne State University in the 1980s.
“I felt that we were approaching a critical juncture overall as an industry,” Iacobelli told the Free Press in 2011. “My aspiration was to get into the automotive industry and try to make a difference.”
What Iacobelli didn’t know when he joined Chrysler was that one day he would play a key role in paving the way for Italian automaker Fiat to acquire the company.
In 2009, Iacobelli led negotiations to restructure the company’s labor agreement to meet the demands of Obama’s automotive task force. Iacobelli told the Free Press in 2011 that he felt cultural pride when Fiat purchased a controlling interest in Chrysler.
“What really struck home was when I picked up a Fiat 500 for my daughter. … It was a very emotional experience,” Iacobelli told the Free Press in 2011.
In 2015, Iacobelli was preparing to lead Fiat Chrysler through another round of contract negotiations, meeting in the spring of that year with automotive reporters to brief them on the automaker’s view of the upcoming talks.
Suddenly, in June 2015, he resigned without explanation. Last week, Fiat Chrysler said that was the month FBI investigators briefed the company about its investigation.
“I join Dennis Williams, the UAW president, in expressing my disgust at the conduct alleged in the indictment which constitutes the most egregious breach of trust by the individuals involved,” Marchionne said in an e-mail obtained by the Free Press. “Upon learning of some possible malfeasance in June 2015, the company investigated and, once credible evidence of wrongdoing was discovered, the individuals involved were immediately separated from the company.”
According to the indictment, that alleged malfeasance by Iacobelli included:
- $35,000 in National Training Center (NTC) funds used as a down payment for two Mont Blanc fountain pens costing $35,700 each.
- $403,834 in NTC funds to pay off his personal American Express and Chase credit cards.
- $350,000 in NTC funds to buy a 2013 Ferrari 458 Spider.
A “fairy-tale wedding” in Italy
In the summer of 2011, just as negotiations with Chrysler were beginning, Holiefield was arrested in Macomb Township for a domestic dispute.
His wife at the time decided not to press charges. The two later divorced.
As for his new wife, by all accounts, the love between Holiefield and Morgan was deep and real. Even some of Holiefield’s critics have said he acted like a teenager in love whenever he was around Morgan. In a tribute to her husband that was published on blacdetroit.com, Morgan said he saved her because she had “given up on finding love.”
She wrote that they had two marriage ceremonies. The first, she said, was “to solidify our love” and the second, she described as a “fairy-tale wedding.” It was in Venice, Italy, with a Mediterranean honeymoon. She wrote: “I became so engulfed in a love so passionate it left me breathless.”
Photos from that wedding in Italy have surfaced on the Internet and have been passed around among workers for years as circumstantial evidence that suggested the couple had more income than they should.
But that passionate love affair, according to the indictment, also was swaddled in luxury because of lots of money from Fiat Chrysler that was supposed to go to the UAW-Chrysler National Training Center for worker development programs.
The indictment alleges Holiefield made more than $200,000 in personal purchases on his credit card, including jewelry, furniture, designer clothing and other items. Iacobelli authorized the charges. Holiefield and Morgan spent $30,000 for airline tickets on trips to Miami, Las Vegas, Los Angeles and elsewhere.
Holiefield also frequently hired Morgan and her company as the photographer for UAW-related events. Then-UAW President Bob King told Holiefield and Iacobelli to end that practice.
“The UAW president warned Holiefield and Iacobelli that paying Monica Morgan was a bad idea and that they could ‘go to jail,’ ” the indictment says. “And (he) instructed them not to direct any additional business to Monica Morgan.”Morgan meets Mandela
As a photojournalist, Morgan has contributed to Newsweek, Jet, the Detroiter, the Associated Press and has “documented historical events around the globe,” according to LinkedIn, a business-oriented social network. Well-known among local news photographers, Morgan served as an official photographer for civil rights figure Rosa Parks.
Morgan splits her time between running her company, Monica Morgan Photography, which is in Detroit, and mentoring young people, according to the profile. In the 1990s, Morgan traveled to Africa as a contract photographer to photograph Nelson Mandela as he ran for president.
Randye Bullock, a retired public relations executive who said she has known Morgan professionally for nearly 30 years, recalled how the photographer was comfortable behind the camera and was a mentor to students — especially girls — who wanted to learn to be photojournalists.
“She would teach them, provide cameras for them, and take them on the road with her,” she said. “That’s what I remember the most about what she did.”
The dreaded 3-2-120 shift
In 2013, Fiat Chrysler adopted a new work schedule at several plants that called for employees to work four 10-hour days instead of five eight-hour days.
Holiefield brushed off workers concerns about the policy by calling it a “good problem to have.” His point: The automaker, that had been through bankruptcy, was willing to add more jobs in the U.S. because of the schedule.
“We have to be creative, and … that means we are going to an alternative work schedule so that we can … get the products out,” Holiefield he said at the time.
Workers that have e-mailed the Free Press question whether Holiefield was more willing to allow the company to put those schedules in place because of his relationship with Iacobelli.
Money for houses and pools
Both Iacobelli and Holiefield used money from Fiat Chrysler to improve their homes, the indictment says.
According to the indictment, $375,047 in funds for the UAW-Chrysler National Training Center was used to install a swimming pool, outdoor kitchen and outdoor spa. Iacobelli’s home is in the Butler Ridge subdivision in Rochester Hills, a short drive from the Fiat Chrysler headquarters in nearby Auburn Hills.
From North Squirrel Road, the subdivision is reachable via a gravel road in a wooded area. The house is 6,815 square feet, according to Trulia.com, and sits near the end of a cul-de-sac.
On Friday morning, Iacobelli was home and answered the front door. When a Free Press reporter asked whether he would talk, Iacobelli said, “No, sir,” and quickly closed the door.
Iacobelli approved a $262,219 check in June 2014 that was used to pay off the mortgage for Holiefield and Morgan’s home in Harrison Township. Holiefield’s term as UAW vice president ended that same month.
Morgan’s neighbors in the Mazuchet Harbor subdivision said Morgan was friendly, but mostly kept to herself. Homes there, many with American flags and basketball hoops, cost about $400,000.
Morgan’s attorney, Steve Fishman, said his client “will not be giving any interviews or making any statements about the case.”
The fall of Holiefield
In September 2013, James Hardy, one of Holiefield’s administrative aides, was dismissed after the UAW learned about allegations that he was selling jobs in return for cash kickbacks. The FBI soon began its own investigation, according to sources familiar with the allegations.
That fall, UAW President Bob King began demanding to see financial records for the UAW-Chrysler National Training Center.
“This is by all accounts…an act of a rogue individual,” said UAW Secretary-Treasurer Gary Casteel. “It has been well established that as quick as we found out about it, we took swift and decisive action to fix the problem.”
In November 2013, Holiefield announced he would not seek re-election to another four-year term in office. While Holiefield’s tenure would not expire for another eight months, King took steps to bar Holiefield from managing the Chrysler department and the training center.
“As soon as we found out, we had (immediate) concerns,” Casteel told the Free Press on Monday. “At the time, we didn’t even have proof of what was going on — that did not come until 2016 -— but just because of our suspicion, in 2014, we excluded him from our list of candidates as an officer (for re-election).”
Casteel reiterated statements made by the UAW last week that the union has put new financial controls in place at the UAW-Chrysler National Training Center to ensure similar crimes can’t be committed again.
By the end of 2013, Holiefield’s 40-year career with the UAW was close to coming to an end. But he remained a prominent figure in the community, still had his family and was still enjoying his relationship with Morgan — and the investigation was not yet public.
But his life would soon get worse. On Dec. 30, 2013 Holiefield accidentally shot his wife while cleaning his gun. Holiefield told police he was sitting at the kitchen table with his wife to his left when the gun went off and she screamed. Morgan was hospitalized with serious injuries but was able to recover.
By 2015, Holiefield had been diagnosed with pancreatic cancer, which typically spreads rapidly to nearby organs. It is seldom detected in its early stages and often has a poor prognosis. Holiefield died on March 10, 2015. He was 61.
His funeral drew hundreds to Greater Grace Temple in Detroit.
Holiefield, who grew up in Middletown, Ohio, and later Inkster, also has a large, extended family and was remembered as the leader of that family.
“General was about love,” his wife, Morgan said at the funeral. “That is who he was, he was the patriarch.”
It’s likely that this is just the beginning for those indicted, as well as for other Fiat Chrysler and the UAW officials in the ongoing investigation.
Morgan, Iacobelli and Jerome Durden, 61, of Rochester, must now either face trial or strike a plea bargain with federal officials. Each stage of the process is likely to generate more painful headlines for the company, the union and the families of those involved.
The investigation also casts a dark cloud over the UAW and could complicate its effort to organize autoworkers in the South and at other employers.
“It’s unfair that these indictments could tarnish the whole reputation of the UAW, but there will be lots of employers using this for years to come,” said Kristin Dziczek, director of the labor and industry group for the Center for Automotive Research.
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