DOJ/SEC Complaint Charges General Motors with Bribing Colombian Officials in Injured Worker Scandal

1

      DOJ/SEC Complaint Charges General Motors with Bribing
               Colombian Officials in Injured Worker Scandal
    by Paige Shell-Spurling and Frank Hammer, with Jorge Parra, President, ASOTRECOL

DETROIT, MI – On behalf of ASOTRECOL and the ASOTRECOL Solidarity Network, we
filed a complaint on November 18, 2014, with the Dept. of Justice and Securities Exchange
Commission(SEC), charging the General Motors Company with violating the Foreign Corrupt
Practices Act (FCPA) at its Chevrolet assembly facility in Bogota, Colombia.

The bribery and corruption charges levied in the 16-page filing originated with members of the
Association of Injured Workers and Ex-Workers of GM Colmotores (ASOTRECOL) who
charge they lost their jobs unlawfully after sustaining disabling injuries at the assembly plant.
Some of them have steadfastly maintained a prolonged tent-encampment protest now in its
1,205th day at the U.S. Embassy in Colombia, demanding from GM a lawful and fair settlement
of their grievances.

                       Unlawful Firings of Injured General Motors Workers

In contrast to the Company’s U.S. operations, which earned health and safety awards for GM,
the factory in Colmotores was a dangerous place to work. Employees typically were required to
build cars at a fast pace on an ergonomically deficient, antiquated assembly line 10-14 hours/day,
6 days/week.     These substandard working conditions caused permanent, disabling injuries
including spinal column and repetitive stress disorders. According to Colombian law, employers
cannot dismiss injured workers; they are required to place injured workers on jobs they can do.
If unable to work, the disabled worker is entitled to a disability pension commensurate with
the severity of the disability until age 70 (Colombia’s legal retirement age). To avoid these
responsibilities and liabilities, GM Colmotores developed a system for dismissing injured
workers which was unlawful.

2

Our letter requesting the DOJ/SEC investigation grew out of a labor conflict arising between
2008 and 2010 as a result of GM Colmotores dismissing hundreds of workers who had suffered
debilitating work injuries in the company’s factory. Sixty eight of those workers formed
ASOTRECOL, which is the source of much of the documentation (referenced in the letter)
which paints a picture of law-breaking and malfeasance by Colombian authorities.

            GM obtained exceptions to regulations, escaped enforcement actions

GM’s Colombian subsidiary - through Pinto Pinto and other Colombian officials - obtained
exceptions to regulations, escaped enforcement actions, and avoided penalties, all of which
helped GM Colmotores achieve the status of “most profitable GM plant” in Latin America.
With its unlawful activities concealed, GM garnered a special “free trade” zone designation
exclusively for its Bogota assembly plant, which enabled the company to import materials duty-
free, and more. Among the victims were the workers and their families, with the breadwinners
disabled and unable to pay for expensive surgeries, and their families having limited means to
survive.

GM has consistently denied any culpability for what happened to the workers. Nevertheless, the
injured workers’ first of several lengthy hunger strikes in August, 2012 embarrassed GM into set
up mediation under the auspices of the Federal Mediation and Conciliation Service (FMCS).
The mediation was suspended due to the departure of the mediators.            Contrary to their
recommendation, GM refused to continue to meet with the workers.

ASOTRECOL’s President Jorge Parra, with the assistance of U.S. supporters, exposes a complex
“system” made up of numerous Colombian governmental departments and agencies, along with
GM representatives, which made the unlawful dismissals possible. These included Colombia’s
Labor Ministry, the Inspector General’s office, Disability Rating Boards, the Attorney General’s
office, and Colombian courts.

3

                 Labor Ministry official blocked and/or derailed investigations

The letter identifies one official as deserving particular scrutiny: Pablo Edgar Pinto Pinto,
Director of the Labor Ministry branch of Cundinamarca, which has jurisdiction over GM's
Colombian subsidiary. Pinto Pinto used his authority to block and otherwise derail
investigations that would have exposed GM Colmotores to sanctions and liability. He (and
subordinates) acted to benefit GM by not enforcing labor standards and otherwise violating
the law, at some risk to himself. The only plausible explanation is that GM officials made it
worth his while, monetarily or otherwise.

According to whistleblowers inside the Labor Ministry, employees who were unwilling to
follow Pinto Pinto’s directives because they deemed them unlawful, were subject to
retaliation, including transfer to more remote or undesirable locations. These employees also
report that Pinto Pinto inappropriately “archived” 1,500 investigations of a variety of
companies which supported workers’ claims.

                      Charges filed under the foreign Corrupt Practices Act

The DOJ/SEC complaint charges that Pinto Pinto and/or the Labor Ministry:
       Undermined a multi-agency investigation of the GM Medical Center which exposed
unlawful acts by GM, then gave GM a convenient means for covering up what it had done. The
investigation had uncovered that management had comingled private and occupational medical
records, had altered those records, and improperly used them to identify injured workers for
dismissal. GM was not held accountable for these violations. Even in the instance where it was
determined that Jorge Parra’s injuries were fraudulently classified as “non-occupational,” the
rating was not changed – thus preventing him from receiving compensation.
       Allowed subordinates to ignore GM Colmotores’ mass dismissal of injured workers,
though such dismissals required preauthorization by the Labor Ministry.1

1 Mass dismissals are mathematically defined. For companies with over 1,000 employees, whenever 5% of the

4

       Let workers’ complaints against GM Colmotores languish past their statute of limitations
(sometimes reaching 3-years), after which they would be voided, and “archived.”
       Declined to uphold Jorge Alberto Parra Andrade’s labor rights when GM unlawfully
discharged him - even though GM submitted obviously doctored paperwork concealing
procedural irregularities.

The GM workers were greatly concerned to find out that the government official who was
supposed to be protecting their rights (Pinto Pinto) shared an office for 9 years with a former
Superintendent of Production at General Motors Colmotores, Guillermo Flautero Torres. He
too once was the Director of the Labor Ministry, and is remembered by union officials at the
plant for not upholding laws protecting their rights during his tenure.

A GM-hired lawyer, Ricardo Pérez Gaviria, conspired with a Pinto Pinto subordinate, Luis
Edgar Alvarado Vásquez, in falsifying termination agreement paperwork2 which enabled GM
to ignore its liabilities towards the injured workers. Colombian law prohibits injured workers
from being dismissed; employers like GM must provide alternate employment or authorize a
disability pension until the legal retirement age of 70. The Labor Ministry’s Office of Internal
Control and Discipline investigated Alvarado Vasquez and ruled that his unlawful activities
were motivated by criminal intent, and suspended him from his post for 12 months.

ASOTRECOL President Parra Andrade filed a request to remove all GM Colmotores cases from
Pinto Pinto’s control due to all the irregularities, Pinto Pinto’s negligence, and his close ties with
the former GM Superintendent. Fearing that granting such a request would expose the Labor
Ministry and Pinto Pinto to legal action, a Labor Ministry official claimed the request had no
merit and refused. Yet, that same day, Pinto Pinto’s cases were transferred, as Parra Andrade
had requested.

  workers will be out of work for 6 months or more, it is considered a mass dismissal, according to article 40 of
  Colombian law 2351 of 1965. GM Colmotores had approximately 1,800 employees during this time period, so
  they legally needed Labor Ministry authorization each time they dismissed over 90 employees.
2 Known as conciliaciones in Spanish.

5

The DOJ/SEC letter charges other government agencies with negligence and worse:
Despite multiple complaints of a long term pattern of abuse, The Inspector General's office
(Procuraduria), did not investigate and hold accountable the Labor Ministry and Pinto Pinto in
particular.

The Disability Ratings Boards helped to annul GM’s financial responsibility to injured workers
by routinely accepting the GM Medical Center’s classifications of work-related injuries as “non-
occupational,” instead of performing their own physical examinations. The Rating Boards
consistently minimized the degree of disability suffered by injured workers, and based decisions
on GM-supplied job descriptions which described much lighter work than was actually
performed. The injured workers suspect the doctors contracted by the Rating Boards were
susceptible to accepting bribes from companies trying to evade the financial consequences of
workplace injuries.

The Attorney General's office failed to investigate,3 much less prosecute, GM's lawyer Ricardo
Perez Gaviria who was complicit in producing falsified paperwork with Labor inspector Luis
Edgar Alvarado Vásquez. There was no investigation to determine who, in the executive ranks
of General Motors, was responsible.            While the low-level government worker, Luis Edgar
Alvarado Vasquez, was suspended, GM’s lawyer continues to practice law.

The Circuit Court of Bogota shielded GM by routinely ensuring that rulings would favor GM.
Whereas judges were supposed to be “randomly” assigned to hear the workers’ cases, all the
cases were mysteriously funneled to just a few of the labor judges, who invariably ruled against
the workers.

Finally there was the attempted bribe of ASOTRECOL President Parra Andrade. Though it
doesn’t fit within the legal framework of the FCPA, it’s illustrative of GM Colmotores’
practices. The bribe was offered by Maria Lucia Zambrano, the then-Labor Relations Director at

3 The Inspector General’s office recommended that the Attorney General’s office open an investigation of Perez
  Gaviria, the falsified conciliations, and GM’s role.

6

GM Colmotores. Zambrano offered to pay Parra Andrade in exchange for his withdrawal of the
complaints he filed with government agencies, and dismantling the tent encampment protest in
front of the U.S. Embassy. This and other attempted bribes alleged by ASOTRECOL, coupled
with the extensive malfeasance and willful negligence documented here, indicate a much larger
pattern of probably bribery and corruption as the norm for General Motors in Colombia.      The
complaint filed on November 18, 2014 requests an investigation per the guidelines of the FCPA,
and prosecution of those responsible. The hope is that these initiatives will force GM to change
its unlawful practices in Colombia, and result in fairness and justice for the injured Colombian
GM workers.

                                              ###