The US Justice Department has filed criminal charges against former Volkswagen CEO Martin Winterkorn, accusing him of conspiring to cover up diesel emissions cheating, but industry watchers said it was unlikely he would travel to the US to answer the charges.
According to Reuters, the indictment, filed in secret in March, was unsealed in US District Court as VW held its annual meeting in Germany.
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Winterkorn resigned days after the scandal over polluting vehicles in the United States became public in September 2015.
Reuters said Winterkorn, 70, had been charged with four felony counts, including conspiracy to defraud the US, wire fraud and violating the Clean Air Act from at least May 2006 to the end of November 2015 after the company admitted using cheat software that allowed Volkswagen diesel vehicles to emit excess pollution without detection.
A lawyer for Winterkorn in Germany did not comment to Reuters. Winterkorn had in January 2017 told German lawmakers he had not been informed of the cheating early and would have halted it had he been aware.
A VW spokesman in Germany told the news agency the company “continues to cooperate with investigations” of individuals but would not comment on the charges.
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By GlobalDataSo far, the US has been able to successfully prosecute only two relatively low ranking VW officials. Last December, Oliver Schmidt, a former manager in Michigan, was sentenced to seven years in prison and fined $400,000 after pleading guilty to conspiracy to defraud the federal government and to violating the Clean Air Act. He had relocated back to Germany but was arrested in Florida after going to the US on holiday.
Other than Schmidt, only a company engineer, James Liang, has been sentenced in the US, receiving a 40 month term last August after also pleading guilty to conspiring to defraud the government and violating the Clean Air Act.
The Reuters report said US Attorney General Jeff Sessions, Environmental Protection Administration chief Scott Pruitt (himself under fire for excessive spending) and other senior Trump administration official had issued statements criticising VW with the indictment, a rare example of a CEO being subjected to criminal prosecution for corporate actions.
“If you try to deceive the United States, then you will pay a heavy price,” Sessions said.
Reuters noted no individuals were charged at either Toyota Motor (in connection with its sudden unintended acceleration scandal) or at General Motors (for an ignition switch defect alleged to have caused many deaths).
The federal government also attracted criticism for not prosecuting senior banking industry executives over the 2007-2009 financial crisis.
Reuters said the US indictment of Winterkorn was likely to be largely symbolic. As a German citizen he is almost certain not to go to the United States and to seek protection under German extradition law. He is also under investigation by German authorities.
A source close to Winterkorn told Reuters he was in Germany and would remain there.
The news agency noted VW settled criminal charges with the US Justice Department in 2017 and agreed to a US$4.3bn payment. The automaker has agreed to spend over $25bn in the US to address claims from owners, environmental regulators, states and dealers.
The company also has offered to buy back about 500,000 polluting US vehicles. Many are now stored in places such as desert airfields around the country.
VW has also set up Electrify America to install a network of EV recharging stations across the US.
Reuters noted three executives who were on the VW management when the scandal broke continue to hold senior positions within the company.
Hans-Dieter Poetsch, who was chief financial officer, now chairs the supervisory board. Herbert Diess now CEO, joined VW on 1 July, 2015 as head of the VW brand only weeks before the diesel scandal broke in the US on 18 September.
Rupert Stadler, head of the Audi brand in 2015, now heads group sales in a reshuffle the newly appointed Diess announced last month. Bernd Osterloh, the company’s labour chief who also sits on the VW supervisory board, is still in place.
Reuters noted VW had said the decision to use illegal software manipulation devices to disguise pollution levels was taken in 2006 below management board level.
“None of the members of the board of management had, at that time and for many years to follow, knowledge of the development and implementation of this software function,” Volkswagen said in its 2017 annual report.
But Sessions said in a statement cited by Reuters the charges against Winterkorn showed that “Volkswagen’s scheme to cheat its legal requirements went all the way to the top of the company”.
The indictment describes a 27 July, 2015 meeting in which VW employees presented PowerPoint slides to Winterkorn and “other senior VW AG management at an in-person meeting at VW’s headquarters in Wolfsburg”. The meeting provided a “clear picture” of how the company was tricking US regulators about software used to rig emissions tests of Volkswagen diesel vehicles, it said.
According to Reuters, the indictment also alleges VW employees recommended the company seek approval for 2016 diesel models from US regulators without revealing the existence of the cheating software and Winterkorn agreed to the plan, the indictment said.
The indictment also said Winterkorn was informed of the emissions cheating by a memo sent in May 2014. Winterkorn has said he did not learn of the cheating until late August 2015, the news agency added.
According to Reuters, the indictment alleges Winterkorn was informed of VW’s misconduct in May 2014 and in July 2015 and he agreed with other senior VW executives “to continue to perpetrate the fraud and deceive US regulators”.
Reuters said an Italian citizen, former Audi manager Giovanni Pamio, is in Germany awaiting extradition but six former VW executives also charged, including Winterkorn, are believed to be in Germany and have avoided facing US prosecutors. So far.
Volkswagen’s emissions crisis – full coverage here
