Coverage: U.S. files charges against six VW executives

Federal prosecutors filed criminal charges on Wednesday against six Volkswagen executives for their roles in the company’s emissions-cheating scandal.

Hiroki Tabuchi, Jack Ewing and Matt Apuzzo of The New York Times have the news:

The six executives include a former head of development of the Volkswagen brand and the head of engine development. One of those charged on Wednesday, Oliver Schmidt, was arrested in Florida last week; the other five are believed to be in Germany.

Volkswagen also formally pleaded guilty to charges of conspiracy to commit wire fraud and to violate the Clean Air Act, customs violations and obstruction of justice. Many of the 600,000 cars in the United States equipped with emissions-cheating software were imported from Germany or Mexico.

The automaker is set to pay $4.3 billion in criminal and civil penalties in connection with the federal investigation, bringing the total cost of the deception to Volkswagen in the United States, including settlements of suits by car owners, to $20 billion — one of the costliest corporate scandals in history.

“Volkswagen knew of these problems,” Attorney General Loretta E. Lynch said at a news conference in Washington. “When regulators expressed concerns, Volkswagen obfuscated,” she said. “And they ultimately lied.”

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.

Steven Overly of the Washington Post reports that additional executives could be charged:

Additional executives at the company are being investigated and could potentially face charges, Lynch said.

The pursuit of executives by criminal prosecutors is a rare occurrence among big companies, whose top people almost never face jail time. In other recent scandals involving automakers such as GM and Toyota — in which safety defects led to deaths of drivers and passengers — the companies paid big fines but admitted no criminal wrongdoing; and no executive saw the inside of a prison cell.

David Uhlmann, who served as the head of the DOJ’s environmental crimes section from 2000 to 2007, said that the settlement was a textbook case of how the agency should address “egregious wrongdoing by corporations.”

“Too often, justice comes up short in corporate crime prosecution but not in the VW case,” the University of Michigan law professor said.

Officials said Wednesday that the Volkswagen case stood out because the deception lasted 10 years and involved senior managers.

Nathan Boney of USA Today reports that the company misled the country into believing executives were not involved:

The VW executives charged in a grand-jury indictment included one of the company’s highest-level executives, Heinz-Jakob Neusser, who led development of the Volkswagen brand from July 2013 until September 2015 and engine development from October 2011 until July 2013.

The charges undermine VW’s past claims that the scheme was the responsibility of an isolated group of employees acting without authority from top leaders.

“It is now clear that Volkswagen’s top executives knew about this activity and deliberately kept regulators and consumers in the dark,” FBI Deputy Director Andrew McCabe told reporters.

Volkswagen promised it is changing its ways since the scandal erupted and said it “cooperated” with the investigation, even as it admitted guilt to obstructing the probe. The automaker said it shared with prosecutors “all findings” of an internal probe conducted by law firm Jones Day at the company’s request.

“We have taken significant steps to strengthen accountability, enhance transparency and prevent something like this from happening again,” VW global CEO Matthias Mueller said in a statement. “We are determined that Volkswagen will become an example of how a socially responsible company should act and lead in the years ahead – and we know that our success can never be divorced from the way we conduct ourselves.”