DETROIT — The FBI’s probe into financial shenanigans by UAW and auto executives has extended to General Motors and Ford, which join FCA in a growing scandal that focuses on stolen training funds, according to a source familiar with the investigation.
At the heart of the probe is whether funds that were meant to train autoworkers at all three companies were instead secretly funneled to union officials and auto executives who were scheming together to line their own pockets.
Since the investigation surfaced four months ago, criminal charges have been filed against two FCA officials and three UAW officials, including ex-FCA Vice President Alphons Iacobelli and Monica Morgan-Holified, the widow of the late UAW Vice President General Holiefield. The pair, along with others, are accused of siphoning millions of dollars from a UAW training center and spending it on themselves, buying everything from luxury vehicles to $35,000 Mont Blanc ink pens.
The Free Press has now learned that the FBI is also eyeing at least one GM official for similar conduct, and is looking into the financial records of training centers that are funded by GM and Ford with the goal of training union autoworkers.
“We are cooperating with the inquiry,” Kelli Felker, manufacturing & labor communications manager at Ford, said in a statement. “We are confident in the UAW-Ford National Programs Center leadership team and the policies and procedures used to govern the program operations that benefit approximately 57,000 members of our UAW-Ford hourly workforce.”
GM also is cooperating, stating: “We have been contacted by the Eastern District of Michigan U.S. Attorney’s Office regarding an investigation into the UAW-GM Center for Human Resources. We are fully cooperating with the investigation.”
The UAW declined comment on the latest development, but has emphasized that the union continues to cooperate with the investigation.
As first reported by the Detroit News, the FBI’s latest targets in the probe include Joe Ashton, 69, a retired UAW vice president who was appointed to GM’s board in 2014, and Cindy Estrada, Ashton’s successor who oversaw the union’s GM department.
Neither could be reached for comment Thursday morning.
So far, the investigation has focused on allegations that FCA auto executives and UAW officials ran a sophisticated money laundering scheme. The executives allegedly stole money from the training center, then funneled it to themselves through various organizations, including a children’s charity called the Leave the Light On Foundation and the Hospice of Metropolitan Detroit.
As prosecutors alleged in court documents, the scam was part of a bigger goal by FCA execs to keep UAW officials “fat, dumb and happy.” And the schemers were careful not to get caught, they said, claiming they warned one another not to leave a paper trail about what was going on.
According to court documents, the training center was funded by FCA and received between $13 million and $31 million a year. Prosecutors say least $4.5 million of that money was misspent.