Fiat Chrysler reaches take care of the US over corruption within the Union

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Fiat Chrysler reaches deal with the US over corruption in the Union

The Justice Department said it reached a settlement with the US division of Fiat Chrysler in the government’s longstanding investigation into union corruption among Detroit leaders.

The US subsidiary, known as FCA US and now part of Stellantis NV, the newly formed auto company that Fiat Chrysler Automobiles merged earlier this month, agreed to face criminal charges of conspiracy against US labor law plead guilty and pay a $ 30 million fine will be imposed, according to statements by the company and the Detroit law firm released on Wednesday.

The FCA US also agreed to run an independent compliance monitor for three years to oversee the closure of an employee training center, which was the focus of federal investigations and other internal controls related to the facility. The objection agreement requires judicial approval.

The settlement concludes the government’s investigation into the FCA US for misconduct discovered at the Training Center, a company operated jointly with United Auto Workers.

The move is also the latest in the multi-year investigation that resulted in a separate civil settlement with the UAW and 15 convictions in recent months, including two former union presidents and a former Fiat Chrysler executive who headed the company’s industrial relations division.

Fiat Chrysler has long alleged that the misconduct uncovered by investigators in recent years was committed by “villains” who were acting in their own interest and not on the orders or for the benefit of the company.

Earlier this month, the Italian-American automaker joined forces with the French PSA Group in a merger worth more than $ 50 billion.

Fiat Chrysler, previously spearheaded by the late Sergio Marchionne, emerged early on as the focus of a federal investigation first published in 2017 with the indictment of its former top bargain hunter.

Since then, prosecutors have said they uncovered evidence of a wider conspiracy by the automaker to illegally channel money to UAW leaders for training workers. Union officials, in turn, used the money to get rich and spent it on expensive meals, travel and luxury goods, prosecutors say.

In the indictments released on Wednesday, federal agencies accused the FCA US of conspiring to violate US labor law by forwarding payments and valuables totaling $ 3.5 million to UAW officials and employees.

The 2009 program, the year the Chrysler Group emerged from bankruptcy, was run by executives to achieve “labor peace” and corrupt the negotiation process, the government said in previous court records.

In December, the Justice Department reached an agreement with the UAW that would subject the 400,000-member union to six years of oversight by a court-appointed observer and require the UAW to pay US $ 1.5 million to resolve outstanding tax problems.

The UAW has publicly condemned former leaders indicted in the investigation and has more recently highlighted changes being made under the current leadership to prevent corruption.

Wednesday’s settlement ends yet another high-profile legal challenge facing FCA US, which in recent years has paid fines for allegedly false reports on monthly sales reports and has faced allegations of using illegal software to cheat government emissions tests.

The U.S. Division was a defendant in a separate civil lawsuit filed by rival General Motors last fall Co.

GM -4.73%

claims it bribed UAW officials to gain an advantage in the labor negotiations. The lawsuit cited the longstanding federal investigation, in which GM said the bribes were approved directly by Mr. Marchionne.

Fiat Chrysler fought the lawsuit, calling it “unfounded” and accusing GM of trying to intervene in its merger plans with Peugeot maker PSA Group. A federal judge dismissed the lawsuit last year.

Write to Nora Naughton at Nora.Naughton@wsj.com

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