Ex-Fiat Chrysler executive pleads guilty in U.S. union corruption probe

(Reuters) - A former Fiat Chrysler Automobiles NV FCHA.MI executive pleaded guilty on Monday in connection with a U.S. probe into accusations that he made at least $1.5 million (1.07 million pounds) in improper payments to United Auto Workers union officials, the U.S. attorney's office in Detroit said.

Alphons Iacobelli, 58, who was a vice president of employee relations, plead guilty to conspiracy to violate the Labour Management Relations Act and to subscribing a false tax return based on failing to report hundreds of thousands of dollars in income diverted from Fiat, the government said. He was charged in July in U.S. District Court in Detroit with taking part in a conspiracy to pay prohibited money and gifts to union officials.

According to a plea agreement made public late on Monday, Iacobelli has agreed to cooperate in an ongoing investigation by the Justice Department into alleged misspending at UAW union training centres funded by U.S. automakers. A lawyer for Iacobelli declined to comment on Monday.

The UAW said in a statement on Monday that it was “appalled at these charges.”

“We have worked with the (national training centre) and Fiat Chrysler to implement a range of measures aimed at enhancing transparency and internal controls at the NTC to reduce the risk of any future recurrence of these activities,” the UAW said.

In November, General Motors Co GM.N and Ford Motor Co F.N said they were cooperating with the investigation. General Motors was conducting an internal investigation into the matter.

The government accused Iacobelli of conspiring to make illegal payments to obtain concessions and advantages for Fiat Chrysler “in the negotiation, implementation and administration of the collective bargaining agreements between FCA and the UAW.”

Monica Morgan, wife of former UAW vice president General Holiefield who died in March 2015, is also expected to plead guilty, Reuters reported last week, citing a person briefed on the matter. She faces a plea hearing on Feb. 6.

Morgan was charged with conspiring with Iacobelli to violate federal labour law. Morgan’s lawyer, Steve Fishman, declined comment.

According to the plea agreement, signed by Iacobelli on Dec. 15, he admitted to transferring hundreds of thousands of dollars in prohibited payments to charities controlled by UAW officials. And, it said, he authorized paying off Morgan and Holiefield’s $262,000 mortgage and making other payments and gifts to UAW leaders using Fiat Chrysler funds.

Iacobelli’s sentencing was set for May 29. He faces a statutory maximum of eight years in prison, and prosecutors said he would be required to repay $835,000.

Jerome Durden, a former Fiat Chrysler official whom the government charged with conspiring to divert over $4.5 million in UAW training centre funds, pleaded guilty in August. Iacobelli is the third person to plead guilty in the probe.

Fiat Chrysler Chief Executive Sergio Marchionne has 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).” The company had no further comment Monday.

Reporting by David Shepardson