MOTORING NEWS - Senior Volkswagen managers have been warned not to travel to the US, sources told the international news agency Reuters. This followed after six current and former managers were indicted for their role in the German car manufacturer's diesel test-cheating scheme.
One of the six charged, Volkswagen manager Oliver Schmidt, was arrested at Miami International Airport recently as he was about to fly home to Germany, transiting from holiday in Cuba. Schmidt was caught up in the "Dieselgate" investigation by the US Department of Justice (DoJ), who ordered him to be charged and held without bail pending trial.
"VW bosses live dangerously," read the headline in Germany's Bild tabloid after the FBI arrested Schmidt. The US Department of Justice is assembling witnesses against Volkswagen.
In the complaint against Schmidt, it is alleged that Volkswagen orchestrated a massive cover-up of its use of illegal defeat devices to cheat on vehicle emissions tests. This allegation is not new, but now the FBI is saying it and it now officially implicates other Volkswagen managers in the cover-up.
Schmidt was general manager of Volkswagen's US engineering and environmental office from 2013 until he was transferred back to Germany in 2015. In that job, he was responsible for managing relations with the Environmental Protection Agency (EPA) and the California Air Resources Board (CARB).
In March 2014, the International Council on Clean Transportation (ICCT) published a study noting what the FBI calls 'substantial discrepancies' between the Nitrous Oxide (NOx) emissions of Volks-wagen diesel vehicles when tested on the road and official tests in the lab.
"On or about May 20, 2014," says the FBI, "Schmidt e-mailed the then-chief executive officer of VW and another employee a document analysing possible consequences/risks of the ICCT study. The analysis noted possible monetary penalties per vehicle from the EPA, with 500 000 to 600 000 vehicles affected."
Volkswagen Group of America's CEO at the time was Michael Horn. In congressional testimony on 8 October 2015, Horn said under oath that he may have heard of possible and fixable problems in spring 2014. He also claimed he didn't know of any defeat devices until the Dieselgate scandal broke in September 2015. Horn astutely put himself out of reach of the arm of justice and left Volkswagen in March 2016.
According to the FBI's informants at Volkswagen, after learning of the study, the company formed a task force to formulate responses to questions that arose from the regulators. VW employees determined not to disclose to US regulators that the tested vehicle models operated with a defeat device. Instead, VW employees pursued a strategy of concealing the defeat device, the FBI alleges.
Under the constitution, German citizens can be extradited only to other European Union countries or to an international court. But leaving Germany could mean being extradited to the US from a third country.
"Several Volkswagen managers have been advised not to travel to the United States," one legal adviser to Volkswagen said on condition of anonymity. A second legal adviser said this also applied to managers who had not yet been charged with any offence in the United States.
"One doesn't need to test the limits," the adviser said. Schmidt was among those who had been warned by lawyers working for the company not to travel to the United States, one of the legal sources said.
Volkswagen declined to comment.
The company agreed to pay R57.23 billion in civil and criminal fines in a settlement with the DoJ. This is the largest US penalty ever levied on a car manufacturer. However, attorney general Loretta Lynch said the DoJ would continue to pursue "the individuals responsible for orchestrating this damaging conspiracy".
In Europe the enormity of the committed crime is even bigger, as half of Europe's cars are diesel-powered. However, the prosecution in Braunschweig near Wolfsburg is taking its time investigating 21 suspects for fraud. The prosecutors might not come to a decision in 2017, spokesman Klaus Ziehe told news agency Reuters.
"The Americans are a year ahead of us," he said.
