Volkswagen set to plead guilty
VOLKSWAGEN is on the verge of pleading guilty to criminal charges and paying $4.3 billion in fines, in a deal that would resolve a criminal investigation into its cheating on vehicle emissions tests, the company said Tuesday.
The expected guilty plea and the recent arrest of a Volkswagen executive on conspiracy charges buck a pattern of companies’ essentially paying their way out of criminal accusations. While companies often face large fines for wrongdoing, it is far less common for them to admit to breaking the law.
As a result of the deal, Volkswagen could be required to cooperate with investigations into individual company employees, accelerating the pace of those cases.
A guilty plea would also be likely to weaken the company’s ability to defend itself against investigations by state attorneys general, and against lawsuits brought by shareholders who accuse Volkswagen of waiting too long to disclose the financial risk of its emissions cheating.
According to two people briefed on the settlement, Volkswagen is expected to plead guilty to charges of conspiracy to commit wire fraud and to violate the Clean Air Act, customs violations, and obstruction of justice. The people could not talk publicly about the deal because it was not yet final. Many of the 600,000 cars in the United States equipped with the emissions-cheating software were imported from Germany or Mexico.
The $4.3 billion in fines covers criminal and civil aspects of the government’s case, including environmental and customs-related penalties. The fines would bring the total cost of the scandal to Volkswagen in the United States to $20 billion, including settlements of civil suits by car owners, certainly one of the most costly corporate scandals in history. Volkswagen said Tuesday that money it has set aside for scandal-related costs would not be sufficient to cover the latest agreement.
The deal still requires approval by the company’s management and supervisory boards. A vote could come as early as yesterday, the company said.
Amy Spitalnick, a spokeswoman for New York state Attorney General Eric T Schneiderman said, “Volkswagen demonstrated a total disregard for the law and for the protection of public health and the environment.”
Schneiderman’s office has taken a lead in the cases brought by the states. She declined to comment further on the investigations.