GM files state lawsuit against FCA in bid to revive bribery case
September 15, 2020
DETROIT — General Motors filed a new lawsuit accusing Fiat Chrysler Automobiles of bribery and conspiracy in state court Monday after the dismissal of its federal racketeering case against the rival automaker.
The automaker, which is still appealing in the federal case, also is now suing two former officials — Joe Ashton and Alphons Iacobelli — who pleaded guilty to embezzling money as part of a wide-ranging corruption investigation into the UAW, according to separate filings issued Monday. Ashton was UAW vice president who later became a GM board member, and Iacobelli was an FCA labor affairs executive who later worked for GM as a spy for FCA, GM claims.
The three filings allege, as GM has since it first sued FCA in November, that FCA, Ashton, Iacobelli and others were guilty of “corporate espionage” that directly harmed the company, and includes claims GM first made in August that they used offshore bank accounts to funnel bribe money. U.S. District Judge Paul Borman in July dismissed the federal case with prejudice after calling it “a waste of time and resources for years to come,” and subsequently dismissed GM’s new evidence of offshore accounts as “too speculative.”
GM, in the case filed Monday in Wayne County Circuit Court in Michigan, for the first time named the banks that it alleges were used in the scheme.
“General Motors is pursuing claims over which the federal District Court for the Eastern District of Michigan declined to exercise jurisdiction and related claims — mainly involving breaches of fiduciary duties that individuals owed to GM while they were employees or directors of the company,” GM said in a statement. “The federal court made no determinations on the merits of these claims. We look forward to presenting these cases in court.”
GM alleges that FCA “provided millions of dollars to co-conspirators via numerous undisclosed offshore bank accounts and utilized such accounts to purchase the support and silence of numerous high-level UAW officers and FCA executives” as part of a conspiracy to force a merger. Once merger plans failed, GM alleges the union and automaker conspired to craft a bargaining agreement that would harm it and benefit FCA.
FCA did not immediately respond to a request for comment.
As part of the alleged plot, GM claims former UAW President Dennis Williams, who last month was charged in the ongoing federal probe, used offshore bank accounts with LGT Bank in Switzerland and Mason Private Bank in Liechtenstein.
GM claims Ashton, who pleaded guilty in the federal probe and awaits sentencing, used Shinsei Bank in Japan and Cayman National Bank in the Cayman Islands. It claims Iacobelli, who is serving a 66-month sentence for his role in the UAW corruption scheme, controlled millions at various banks including Deutsche Bank in Italy, VP Bank Vaduz in Liechtenstein and UBS in Switzerland, among others.
Iacobelli’s lawyer, David DuMouchel, declined comment. A lawyer for Ashton did not immediately return a request for comment.
GM says it uncovered evidence that offshore bank accounts were used to funnel bribe money through private investigations.
Those allegations have so far not been corroborated in any filings made by U.S. Attorney Matthew Schneider’s office as part of its investigation into the UAW that has resulted in convictions against Iacobelli, Ashton and 12 others. Schneider last month would not say whether his team had uncovered any evidence of the improper use of offshore accounts, telling Automotive News his team was operating independently of the GM investigation.
The state suit makes no mention of former UAW President Ron Gettelfinger, who GM had previously accused of using offshore accounts as part of the scheme. Gettelfinger vehemently denied the allegations in an open letter last month issued through the UAW.
“Mr. Gettelfinger asked for a chance to refute the allegations made against him and GM is giving him that opportunity,” GM spokesman Jim Cain said in an email.