Ex-UAW official pleads guilty, agrees to cooperate in corruption scandal – By Frank Witsil (freep.com) / July 23 2018
Photo: Junfu Han, Detroit Free Press
Nancy Johnson, the one-time senior official in the UAW Chrysler Department, pleaded guilty Monday in a wide-ranging corruption scandal involving Fiat Chrysler Automobiles.
As part of the agreement, the 57-year-old acknowledged before U.S. District Judge Paul Borman in Detroit that she violated labor laws, and agreed to cooperate with the prosecution’s case against other union and FCA officials.
“I didn’t have a right,” she said in court, referring to her use of credit cards for personal items.
The government said Johnson spent thousands of dollars meant for autoworker training on personal items, including first-class airline tickets, expensive luggage, $1,160 Christian Louboutin shoes, $4,587 at LG’s Prime Steak House and $6,900 at Renaissance Resort & Spa.
Her actions, the prosecution has alleged, were part of a wider corruption conspiracy among UAW and FCA that involves bribes for favorable contracts. The UAW and FCA have denied that allegation, saying a few corrupt individuals stole the money, and their actions did not affect labor agreements, which are ratified by union members.
“The misconduct by Nancy Johnson and certain other individuals, in this case, has been very disturbing,” the union said in response to the plea arrangement. “The UAW has taken strong measures to prevent a reoccurrence of this type of misconduct and our new leadership team continues to oversee improvements in our operations and financial controls.”
Johnson’s agreement to cooperate suggests that the feds are investigating whether others are involved in the alleged conspiracy in either organization.
Sergio Marchionne, who was replaced Saturday after becoming gravely ill following shoulder surgery, had been questioned in 2016 about the scheme by investigators with the U.S. Attorney’s Office, according to a source familiar with the investigation.
He had previously announced he planned to retire next year.
Johnson’s plea also comes less than two weeks after Monica Morgan, the widow of a former UAW vice president, who is a metro Detroit photographer, was sentenced in the wide-ranging scandal in which the prosecution alleges the misuse of millions of dollars.
Morgan, who was married to General Holiefield, was sentenced to 18 months in prison, one year supervised release and a $25,000 fine. In addition to her fine, she is liable for an additional $88,000 in restitution. Holiefield died of pancreatic cancer in 2015.
Morgan, one of seven people charged in the scandal, also pleaded guilty in February to a tax charge for hiding $201,000 on her 2011 taxes.
Monica Morgan, widow of the late UAW Vice President General Holiefield, leaves the federal courthouse in Detroit Friday, July 13 after being sentenced to 18 months in prison on a tax charge for her role in the wide-ranging scandal involving misuse of money meant to train Fiat Chrysler Automobiles workers. Morgan will “self-report” to prison. Eric D. Lawrence, Detroit Free Press
In addition to conspiracy to violate the Labor Management Relations Act, Johnson had been charged with four counts of accepting prohibited money. Each of the five counts was punishable by up to 5 years in prison and a $250,000 fine.
But under the agreement, the sentencing guidelines call for 12 to 18 months and payment of restitution.
The indictment outlined a conspiracy of payments to UAW leaders through a joint training center.
In addition to Johnson and Morgan, prosecutors accused others, including former Fiat Chrysler executive Al Iacobelli of Rochester Hills and Jerome Durden, 61, of Rochester, a financial analyst at FCA who allegedly helped conceal the fraud, and also pleaded guilty.
Iacobelli is accused of diverting more than $1 million in funds for his personal benefit that included funds for a $350,000 Ferrari, Mont Blanc pens and home improvements.
He has pleaded guilty and faces up to eight years in prison with sentencing set for August.
Johnson, who is represented by Harold Gurewitz, is set to return to court Nov. 19 for sentencing.
