The federal government has brought charges against the Chrysler Corporation and the United Auto Workers union for collusion during national contract negotiations. This is a scandal of gigantic proportions.

Alphons Iacobelli, Chrysler’s former vice president of labor relations, has pleaded guilty to two of seven charges related to his role in diverting more than $4.5 million in UAW/Chrysler training center funds to himself, other Chrysler officials and various UAW members.

Training center funds are monies set aside by Chrysler to train employees. The fund is administered by the UAW.

The Automotive News stated in its Jan. 29 edition that federal investigators are questioning whether recent nationally negotiated contract agreements are valid. Iacobelli, in his plea agreement, admitted he and other Chrysler executives paid $1.5 million to UAW officials to sway union negotiations in Chrysler’s favor.

One example is UAW Vice President Major Holifield, now deceased. He was the recipient of training center funds to buy first-class airfare, jewelry, designer clothing, furniture and paying off the balance of his home mortgage of $262,000. Holifield’s widow was initially charged on seven counts, but has pleaded guilty to income tax evasion, while other charges were dropped. Several charges were dropped because she was considered by federal prosecutors as a recipient of the money opposed to a decision maker.

Another prominent UAW executive who abruptly retired is former UAW Vice President Norwood Jewel. The U.S. Attorney’s Office said Iacobelli alluded to Jewell, but did not name him directly. I am sure Jewell is sleeping well these days. The UAW said Jewell, 60, has retired and will not seek re-election. This is highly unusual for a UAW vice president because retirement age is 65, and UAW executives don’t step down until the end of their term. In Jewell’s case, the end of his term would have been in June. More to come on Jewell’s situation.

All negative disclosures will not help the UAW as it attempts to organize Southern automotive plants. As a matter of fact, the present UAW leadership is under fire by the union’s membership over the training center scandal. There are many questions to be answered, questions that will have to wait for the federal investigation to play out. But how could millions of dollars disappear from the training center funds without someone at the higher levels of Chrysler and the UAW being aware that something was wrong? The federal prosecutors have indicated more high-level executives at both Chrysler and the UAW will be charged.

The UAW leadership has said in no uncertain terms that actions of the accused could not have affected master contract negotiations. How can they be sure? UAW President Dennis Williams stated that negotiations have not been affected because the rank and file are the final arbitrators with their vote. I agree, but there are certain nuances that can’t be identified by the workers. One small change in the master contract — one small iteration — could mean millions of dollars to a multi-billion-dollar company like Chrysler.

There is no doubt the training center scandal has hurt Chrysler, the UAW and especially UAW membership, both present and future. Art Wheaton, a labor expert with the Worker Institute at Cornell University said, “All it takes is for a couple of people to get indicted, and everybody gets painted with the same bad brush.” But worst of all, this scandal has generated dissension among the rank and file membership of the UAW.

A lawsuit has been filed by three Chrysler employees who are representing thousands of other union members. The three members are charging UAW leadership and Chrysler officials with collusion and are seeking class-action status. In addition, a new slate of officers has been offered as an alternative to those nominated by the UAW leadership. Attorney Raymond Sterling, attorney for the three litigants said, “Usually where there is money exchanged, it is for a reason.”

Let me be clear: This is a federal investigation that could lead to unfortunate, but deserved, negative circumstances for both Chrysler and the United Auto Workers.

John F. Floyd is a Gadsden native who graduated from Gadsden High School in 1954. He formerly was director of United Kingdom manufacturing, Goodyear Tire & Rubber Co., vice president of manufacturing and international operations, General Tire & Rubber Co., and director of manufacturing, Chrysler Corp. He can be reached at johnfloyd538@gmail.com. The opinions reflected are his own.