VW facing legal ‘tsunami’
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Who knew about the deception at Volkswagen, when did they know it and who directed it?
Those are among the questions that investigators worldwide want answered as they plunge into the emissions scandal at the German carmaker that has cost the chief executive his job, caused stock prices to plummet and could result in billions of dollars in fines.
Legal experts say Volkswagen is likely to face significant legal problems, including criminal charges, arising from its admission that 11 million of its diesel vehicles sold worldwide contained software specifically designed to help cheat emissions tests.
The US Environmental Protection Agency has accused VW of installing sophisticated stealth software that enabled “clean diesel” versions of its Passat, Jetta, Golf and Beetle models to detect when they were being tested and emit less-polluting exhaust than in real-world driving conditions. The agency says the “defeat devices” allowed those models to belch up to 40 times the allowed amounts of harmful fumes in order to improve driving performance.
“If there is sufficient evidence to show that Volkswagen intentionally programmed its vehicles to override the emission control devices, the company and any individuals involved could face criminal charges under the Clean Air Act, and for conspiracy, fraud and false statements,” said David M. Uhlmann, a former chief of the US Justice Department’s Environmental Crimes Section who is now a law professor at the University of Michigan.
CEO Martin Winterkorn resigned last week, and Volkswagen announced it would set aside US$7.3 billion ($11.4b) to cover the cost of the scandal, but even that may not be enough.
German media reported that Volkswagen had received warnings years ago about the use of illegal tricks to defeat emissions tests. One newspaper said VW’s internal investigation found a 2007 letter from parts supplier Bosch warning Volkswagen not to use the software during regular operation; another reported a Volkswagen technician raised concerns about illegal practices over emissions levels in 2011.
The Clean Air Act allows for fines of up to $37,500 for each of the 482,000 suspect VWs sold in the US, potentially totaling more than $18 billion. Nearly 30 states and the District of Columbia have announced a coordinated investigation and are issuing demands for company records.
There’s also a high likelihood of lawsuits by angry VW owners.
“They’re facing a tsunami of possible state and federal enforcement actions, and a potential large number of violations — including administrative, civil and criminal,” said William Carter, a former federal prosecutor who specialised in environmental crimes.
Gregory Linsin, a former environmental crimes prosecutor, said he expected the Justice Department to take into account the many investigations likely to take place worldwide, and not punish the firm in a way that jeopardises its ability to stay in business.