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Guilty Volkswagen Execs Hiding Behind German Privacy Laws

2015-09-23T152148Z_01_SIN71_RTRIDSP_3_USA-VOLKSWAGEN-MANAGEMENTCHANGES-1522-300x200Last fall, Volkswagen admitted to installing illegal software on its diesel vehicles in order to cheat pollution emissions tests, defrauding the purchasers of up to 11 million vehicles worldwide.

CEO Martin Winterkorn resigned in the immediate wake of the scandal, and 9 VW executives were suspended.

The US Justice Department has since launched a lawsuit against the company seeking up to $46 billion under the Clean Air Act, and 47 state attorneys general have opened their own investigations. The Justice Department has not ruled out criminal charges against VW.

Matthias Müller, the man that replaced Martin Winterkorn as CEO, promised “maximum transparency” after taking office. “My most urgent task is to win back trust.”

However, in the months since VW supposedly came clean, the company’s behavior has only “impeded and obstructed” the work of investigators, says the US Justice Department, going so far as to accuse VW of providing “misleading information.”

VW cites German privacy laws, in particular the Federal Data Protection Act, in refusing to provide investigators with emails and other correspondences between executives. Blocking investigators from identifying which employees participated in the deception limits the penalties that can be imposed on the company.

“Our patience with Volkswagen is wearing thin,” said New York attorney general Eric T. Schneiderman. “Volkswagen’s cooperation with the states’ investigation has been spotty — and frankly, more of the kind one expects from a company in denial than one seeking to leave behind a culture of admitted deception.”

VW maintains that only a small number of employees were responsible for the emissions cheating. None of the 9 executives suspended by the company were on the management board.

Federal prosecutors that promised to hold the guilty individuals responsible have remained unable to do so without VW’s cooperation.

Because German privacy laws are stricter on data leaving the European Union, German investigators are in a unique position to hold VW responsible for their deceit. This is unlikely, however, because VW is one of the largest employers in Germany. Even German prosecutors’ promise of a formal investigation into former CEO Martin Winterkorn has since been retracted.

Fortunately, as of this week Sweden has opened a fraud investigation into VW as well, and may be of some aid to stymied US investigators.

VW is the biggest auto manufacturer in the world, and right now they are acting only to protect their own interests and avoid responsibility for their mass deceit. Their customers deserve better.

Sources:

Davenport, Coral and Danny Hakim, “U.S. Sues Volkswagen in Diesel Emissions Scandal,” The New York Times, 4 January 2016.

Ewing, Jack and Danny Hakin, “VW Refuses to Give American States Documents in Emissions Inquiries,” The New York Times, 8 January 2016.

Soderpalm, Helena and Oskar von Bahr, “Sweden to open fraud probe into Volkswagen emissions scandal,” Reuters, 12 January 2016.