FCA denies GM’s accusations of spying

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DETROIT — Fiat Chrysler Automobiles on Monday disputed allegations made by General Motors of spying and bribes funneled through offshore bank accounts, comparing the claims by its rival to a “third-rate spy movie.”

FCA said GM’s attempt to revive a federal racketeering case that a judge dismissed in July is “meritless and should be denied.” GM said in its amended complaint last week that FCA and co-conspirators are guilty of “corporate espionage” that directly harmed GM and violated the Racketeer Influenced and Corrupt Organizations Act.

FCA, in its response Monday, said GM must know “that the prospect of the court changing its mind on the crucial issue of RICO causation is slim to none, so this motion is apparently a vehicle for GM to make more defamatory and baseless accusations about a competitor.”

The accusations are an attempt to tarnish FCA’s reputation unfairly as it prepares to merge with PSA Group of France, FCA said.

“GM’s proposed amended complaint is the latest example of the lengths it is prepared to go to, attacking a competitor that is winning in the marketplace with yet more baseless accusations,” FCA said in a statement. “As we have said from the date this lawsuit was filed, it is meritless and we will continue to vigorously defend ourselves. GM’s attempts to tarnish FCA’s reputation and that of individual FCA officers and employees will not distract us from our mission of providing customers with outstanding and exciting cars, trucks and SUVs or from completing our landmark combination with Groupe PSA.”

GM’s original racketeering suit, filed in November, claimed that its smaller rival secured an unfair labor-cost advantage by bribing UAW officials during key contract negotiations covering wages and benefits. The suit alleges that former FCA CEO Sergio Marchionne, who died in 2018, wanted to hurt GM in an effort to force a merger between the two companies.

Last month, U.S. District Judge Paul Borman dismissed the case with prejudice after calling it a distraction for the companies and a “waste of time and resources.” But the 6th U.S. Circuit Court of Appeals later said Borman failed to consider other remedies and said his reasoning — that the lawsuit would distract the companies from dealing with the coronavirus pandemic and recent racial tensions across the country — was unrelated to the case at hand.

GM said Monday it stands behind its pleading.

“FCA’s corruption of the collective bargaining process remains undeniable — a federal investigation is ongoing and there have already been multiple guilty pleas,” GM said in a statement. “New facts uncovered through GM’s investigation which FCA tries to discount — including offshore accounts in multiple countries — implicate numerous individuals and make GM’s RICO case even stronger. GM seeks to uncover in court the full extent of harm the FCA bribery scheme caused GM.”

GM said nothing in FCA’s replies “counters the significance of these allegations and the direct harm the defendants’ corruption caused GM, and the Court should amend its prior judgment and reinstate our case.”

GM came to the table with fresh details in its filing last week, saying that FCA and co-conspirators used a network of foreign bank accounts containing millions of dollars in Switzerland, Luxembourg, Liechtenstein, Italy, Singapore and the Cayman Islands to harm GM.

GM named two former UAW officials — Joe Ashton, who joined GM’s board in 2014 after retiring as the head of the union’s GM department, and ex-President Dennis Williams — as defendants, along with Alphons Iacobelli, who left FCA in 2015 and then joined GM. The complaint also makes allegations against former UAW President Ron Gettelfinger, who has not been named or implicated in any previous cases of UAW corruption. Gettelfinger angrily denied the accusations.

FCA said in its Monday filing that GM’s proposed amended complaint is “full of preposterous allegations,” inluding that it paid Ashton and Iacobelli with money from the overseas accounts to infiltrate GM and funnel inside information to FCA. “None of that is true,” FCA said.

FCA also said GM fails to meet its burden of showing that its “newly discovered evidence” would have produced a different result if presented before the original case was dismissed.

GM accused FCA of providing Iacobelli and a family member with “millions of dollars” through funds currently in accounts in Italy, Liechtenstein, Switzerland and Singapore.

GM’s allegations are based on speculation, Iacobelli said in a filing Saturday submitted by his lawyer. The information GM has relied on is “objectively unreliable and would not survive the light of day,” the filing said.

Iacobelli, who is serving a five-and-a-half-year sentence for his role in the FCA-UAW corruption scandal, blasted GM, equating the automaker to the late Sen. Joseph McCarthy by claiming to have evidence without providing it.

“Senator McCarthy never actually made the list public but garnered significant attention by promoting his claim that ‘I have here in my hand a list …’ of those supposed State Department employees” that McCarthy said were members of the communist party, he said. “GM similarly claims possession of alleged ‘newly discovered evidence,’ supposedly a list of alleged foreign bank accounts that GM attributes to the Defendants (and proposed defendants) and around which imaginary list GM spins a wild and completely unsupported tale of ‘moles’ and alleged undisclosed foreign payments.”

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Saurabh Shukla

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