Firm was co-operating ‘but is concerned about the tenor of the communications’

Continued from FP1

In the United States, VW agreed to pay more than US$20 billion to settle criminal charges and civil claims over the scheme.

Ontario has now charged Volkswagen AG, the parent company in Germany of VW Canada, with breaching the province’s Environmental Protection Act by causing or permitting motor vehicles to operate with higher-thanallowed emission levels.

The breadth of the ministry’s investigation is highlighted in the court filing.

The ITO lists three “suspects”: VW’s parent company in Wolfsburg, Germany, and two wholly owned subsidiaries: Volkswagen Canada Group Inc. and Audi Canada Inc.

The ministry alerted VW to its investigation in October, 2015, in a written request to Stenstroem for cooperation and information. The letter sought various types of information, according to the ITO.

The reply came from VW’s lawyer, Teresa Dufort, saying the company would co-operate and, a month later, some information was provided to investigators.

“No one currently employed at VGCA had knowledge of the software described… until after the disclosures” in the United States in 2015, Dufort wrote, according to the ITO.

Thus began a series of what appear to be increasingly strained exchanges between the ministry and the company.

VW suggested the province was wading into federal affairs and that since VW Canada only imported cars, not made them, investigators’ resources were misplaced. VW sought assurances information would remain confidential. VW complained the requests were becoming “very onerous” in terms of workload and “tenuous” in terms of value.

The investigators’ replies often noted missing information or answers they felt were incomplete and usually asked additional questions.

They started requesting interviews with specific VW employees. The ministry also asked if VW would loan the ministry a 2011 and 2013 diesel Jetta for its testing, but a response is not noted in the ITO.

If the responses from VW’s Canadian office were getting chilly, the apparent feedback from VW in Germany was out-and-out frigid, investigators suggest in the ITO.

On May 12, 2016, a letter from investigators was sent via Purolator courier to Matthias Muller, CEO of Volkswagen AG in Germany who was named to the position after the resignation of his predecessor in the wake of the emissions scandal.

The package was refused, the ITO claims.

The ministry asked VW Canada’s lawyer to help deliver the letter to VW’s parent company. A response is not noted.

By July, ministry investigators were showing up at VW headquarters and phoning company officials asking for information they felt was missing. VW’s lawyer complained of the in-person visits over a voluntary request.

VW was co-operating “but is concerned about the tenor of the communications,” VW wrote to the ministry, according to correspondence quoted in the ITO. “How do they stay in business,” the ITO says.

Little of the meetings were of a technical nature about the cheat devices, beyond company officials telling them their engineers are looking at it, the ITO says.

Service technicians and managers at dealerships generally told investigators they had no knowledge of what the software did, according to the ITO.

On July 21, investigators went to VW Canada’s headquarters to try to speak with two staff members they had been asking to interview, according to the ITO.

They were told they would need to make an appointment. Later, the ministry was told the employees were on vacation.

On Aug. 3, an investigator went to VW Canada headquarters to hand-deliver a letter to Stenstroem asking to interview her.

“As part of its plea agreement in the United States, Volkswagen AG has admitted to certain facts in relation to the after-sale modification of North American Volkswagen vehicles that had the defeat device, and these modifications occurred after you joined Volkswagen Canada,” the letter said, according to the ITO.

The next day, an email from VW’s lawyer said Stenstroem needed time to “obtain independent legal advice” before answering the investigators.

At the time of the raid on VW headquarters on Sept. 19, a VW Canada spokesman said: “We’ll continue to cooperate with them until they have the information they require … We’re not hiding anything.”

In correspondence with investigators quoted in the ITO, VW Canada denied contravening the Environmental Act.

Both electronic and paper documents were taken in the raid, according to an evidence log entered in court after the search — including binders, files and agenda taken from Stenstroem’s desk drawers and shelves and a box from her office windowsill.

Copies were taken of some employee’s computers, file folders and internal user directories. Also taken were copies of PowerPoint presentations.

Thomas Tetzlaff, a spokesman for VW Canada said: “Volkswagen Canada has not seen the document. It would not be appropriate to comment.”