VW Pleads Guilty as U.S. Files Criminal Charges Against Six Execs
The U.S. Department of Justice has filed criminal charges against six Volkswagen executives last week, after the company pleaded guilty to charges of conspiracy to commit wire fraud and violate the Clean Air Act, customs violations, and obstruction of justice, all in connection with the VW emissions cheating scandal.
“The six executives include a former head of development of the Volkswagen brand and the head of engine development,” the New York Times reports. “One of those charged on Wednesday, Oliver Schmidt, was arrested in Florida last week; the other five are believed to be in Germany.”
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The company will pay US$4.3 billion to settle the suit, bringing its total costs in the United States to $20 billion. “Volkswagen knew of these problems,” said Attorney General Loretta Lynch. “When regulators expressed concerns, Volkswagen obfuscated,” she added. “And they ultimately lied.”
Justice “has been criticized for years as being too easy on the banks that caused the financial meltdown and set off a major recession,” the Times notes. Now, “extracting a guilty plea from a major corporation is a notable feat for an administration that has been accused of allowing companies to buy themselves out of indictments through so-called deferred prosecution deals. The move comes as outgoing members of the Obama administration race to finish major cases before leaving their jobs.”
FBI Deputy Director Andrew McCabe called the case “a great example of the fact that no corporation is too big, no corporation is too global, and no person is beyond the law.”
The new year brought new pain to Volkswagen in the United Kingdom, as well, with 10,000 VW owners filing a class action seeking compensation of £3,000 each.
“The German firm has yet to reach a settlement with British and European owners affected by the scandal, in which the company admitted using ‘defeat devices’ to cheat emissions tests, making its cars appears greener than they were,” The Guardian reports. “It has not compensated British owners despite reaching a £15-billion settlement with 500,000 US drivers, offering instead to fix affected vehicles.”
The U.S. Environmental Protection Agency is also accusing Fiat Chrysler of violating the Clean Air Act with elevated NOx emissions on about 104,000 diesel vehicles sold in the U.S. “Failing to disclose software that affects emissions in a vehicle’s engine is a serious violation of the law, which can result in harmful pollution in the air we breathe,” said Cynthia Giles, assistant administrator for EPA’s enforcement unit.
But Fiat Chrysler CEO Sergio Marchionne denied the charge. “There was never any intent of creating conditions that were designed to defeat the testing process,” he said. “This is absolute nonsense.”