Ex-VW CEO Winterkorn charged with cheating in US
SAN FRANCISCO: Volkswagen AG’s former chief executive officer Martin Winterkorn was charged in the US in a deepening probe into the German automaker’s cheating on diesel emissions testing.
Winterkorn, who stepped down from his role as CEO days after the scandal became public, is accused of conspiring to defraud the US and violate the Clean Air Act. The March 14 indictment was unsealed by a Michigan federal court on Thursday.
“The indictment unsealed today alleges that Volkswagen’s scheme to cheat its legal requirements went all the way to the top of the company,” Attorney General Jeff Sessions said in a statement. “These are serious allegations, and we will prosecute this case to the fullest extent of the law.”
Winterkorn is the highest-ranking person to be charged in the three-year investigation, opening a new chapter in the cheating scandal that burst into the open in 2015 when VW admitted to rigging the emissions setups of some 11 million vehicles worldwide. The company, earmarking fines and damages of
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25bil, has bounced back faster than expected with record deliveries and profits, yet it’s struggling to step out of the looming shadow of the scandal. Investigations and probes, including several raids at company sites by German authorities, have continued amid disgruntled investors and European car owners seeking damages.
Winterkorn is unlikely to ever face trial in the US. Germany doesn’t extradite its citizens to countries outside the European Union so Winterkorn won’t be arrested unless he leaves the country.
VW admitted in September 2015 outfitting diesel cars with a defeat device, an embedded software that allowed the vehicles to recognize when they were being tested in laboratory conditions, to reduce emissions to meet acceptable levels. According to the indictment, Winterkorn was briefed on both the emissions issue and how U. regulators were threatening to delay certifying cars for sale, at a July 2015 meeting in Wolfsburg, Germany, where the company is based.
Current CEO Herbert Diess, who had joined the company weeks earlier from BMW AG, was also present at the meeting, according to a document released by VW in 2016. The Department of Justice on Thursday detailed how the Winterkorn-chaired gathering discussed, with the help of a PowerPoint presentation, how VW was deceiving US regulators, including what information had and hadn’t been disclosed so far, as well as possible consequences for the carmaker if it were found out.
The carmaker pleaded guilty in January 2017 to using false statements to import cars into the US and to obstructing investigations, and paid US$4.3bil in penalties. Two other employees have pleaded guilty over their role in the affair, and five other executives have been indicted by the US and remain in Germany, avoiding arrest. They include executives who led engine development as well as the failed efforts to design a diesel engine that would meet the tougher emissions standards the US adopted for 2007, as well as another liaison to US regulators.
Diess pledged on Thursday that the German manufacturer would step up compliance systems to prevent the sort of misconduct that set off the deepest crisis in the company’s history. Diess spoke for the first time in his new role as CEO at the company’s annual shareholder meeting in Berlin after VW abruptly replaced Winterkorn’s successor, Matthias Mueller, last month.
The Winterkorn indictment focuses on the July 27, 2015, meeting in Wolfsburg, where Winterkorn and several other senior leaders were briefed about the diesel irregularities and how US regulators were threatening to hold up certifying 2016 models. Winterkorn at that meeting “approved the continued concealment of the cheating software from U.S. regulators,” according to the indictment.