EPA official: VW misled regulators when emissions problem discovered

WASHINGTON — After California and federal officials discovered that Volkswagen diesel vehicles were spewing illegal amounts of pollution, the company initially concealed that it had installed devices to trick emissions tests, according to a top Environmental Protection Agency official.

The so-called defeat devices, installed in about 482,000 VW vehicles in the U.S., violated several provisions of the Clean Air Act, and the company faces billions of dollars in fines.

“These violations are very serious,” Christopher Grundler, director of the EPA’s Office of Transportation and Air Quality, said in written testimony prepared for a House hearing today on the scandal.

“Not only because the illegal defeat device results in excess emissions many times the allowable standard, but also because after the high emissions were discovered, VW concealed the facts from the EPA, the State of California, and from consumers,” he said.

Michael Horn, chief executive of Volkswagen’s U.S. unit, also is scheduled to testify at the hearing before the House Energy and Commerce Committee’s oversight and investigations panel.

A May 2014 study by researchers at West Virginia University found that two VW diesel vehicles emitted “significantly higher” levels of

‘... after the high emissions were discovered, VW concealed the facts from the EPA, the State of California, and from consumers.’ Christopher Grundler, director of the EPA’s Office of Transportation and Air Quality

the pollutant nitrogen oxide in on-road tests than in standard emissions tests, according to a memo summarizing the subcommittee’s investigation.

The results were shown to the EPA, the California Air Resources Board and VW, which all began investigating.

VW at first told regulators that the higher emissions “could be attributed to various technical issues and unexpected in-use conditions,” said the memo from the subcommittee’s staff to members of the panel. VW proposed recalibrating the emissions system of its vehicles. In December 2014, the company started a voluntary recall of about 500,000 diesel vehicles from model years 2009 to 2014.

But testing by California regulators of VW’s proposed changes “showed limited improvement,” prompting an expanded investigation, the memo said. It wasn’t until a series of meetings beginning in July that VW disclosed to regulators that the emissions systems in the vehicles “had a second calibration intended to run only during … testing,” the memo said.

On Sept. 3, VW admitted to the EPA and California regulators that it had designed and installed the defeat devices, which significantly lowered vehicle emissions when testing was detected.

Grundler said the EPA continues to investigate and is working closely with the Justice Department but provided few details in his prepared testimony. The investigation is trying to determine “whether there are additional vehicles with defeat devices” beyond those already identified, he said. VW faces fines of up to $37,500 per vehicle, or about $18 billion.

The committee’s investigation is just one of several investigations in the U.S. and elsewhere. VW Chief Executive Martin Winterkorn resigned last month and the company’s stock price has plummeted.

On Tuesday, the chairman and top Democrat on the Senate Finance Committee said they were investigating VW’s certification of the diesel vehicles for federal tax subsidies.

The Los Angeles Times first reported that the federal government paid as much as $51 million in subsidies to the buyers of about 39,500 Jetta and Jetta Sportwagen models that sold in 2009, the first and only year the vehicles qualified for the tax credit.

Volkswagen on Wednesday said a recall of the cars in question could start in Germany in January and last until the end of next year. The recall does not yet include cars in the U.S., where any recall will have to be approved by the Environmental Protection Agency and the California Air Resources Board. Confirmation of the planned start date of the recall of 2.8 million cars in Germany came in an interview with VW Chief Executive Officer Matthias Mueller published Wednesday in the daily Frankfurter Allgemeine Zeitung.

In it, he said many of the cars being recalled won’t need much fixing, merely requiring an adjustment to software. Others though may require mechanical fixes such as new injectors or catalyzers. He said that “care goes before speed” and that if everything goes “as planned, we can start the recall in January.”

“All the cars should be in order by the end of 2016,” he added.

Mueller also said first results of the investigation indicated that a few developers were responsible for the deceptive engine control software — but that only further investigation would settle how many company officials bear responsibility.

Mueller, who became CEO less than two weeks ago after the resignation of Winterkorn, said the automaker may need to set up temporary specialist workshops to deal with more complex cases. He said VW will have to fix the EA 189 diesel engines “in combination with various transmissions and country-specific designs. So we don’t need three solutions, but thousands.”