Former Volkswagen CEO Martin Winterkorn, ousted following the revelation of Volkswagen’s diesel emissions rigging, may have known about the subterfuge far earlier than he has so far acknowledged, according to German prosecutors.
If that proves true, the life-long VW executive could face potential criminal charges on both sides of the Atlantic. After announcing a $4.3 billion settlement of a criminal investigation of the automaker earlier this month – a deal that was accompanied by six criminal indictments — U.S. Justice Department officials said they might yet bring charges against other VW employees.
The German investigation further challenges claims by the automaker that only a “handful” of low-level engineers knew about the plan to use rigged software to help VW’s diesel engines pass tight U.S. emissions standards.
The scandal broke in September 2015 when the U.S. Environmental Protection Agency accused VW of using a so-called “defeat device” on its 2.0-liter turbodiesel. The automaker subsequently acknowledged the subterfuge, while also admitting it rigged a higher-end 3.0-liter engine, as well.
(Battle over ethics raging at VW as ethics chief resigns. Click Here for more.)
Winterkorn resigned less than a month later but, like other higher officials within the vast VW organization, insisted he was never informed of the subterfuge.
Prosecutors began to question that when some indications arose that the former CEO may have learned about the rigged engines before the EPA probe went public. They have been looking at whether Winterkorn and other top execs – including Volkswagen brand boss Herbert Diess — withheld that information from investors in order to improperly shore up the company’s stock price.
The new line of questioning suggests that Winterkorn might have known about the cheating – if he wasn’t actively involved in the plan – even earlier.
“Sufficient indications have resulted from the investigation, particularly the questioning of witnesses and suspects as well as the analysis of seized data, that the accused (Winterkorn) may have known about the manipulating software and its effects sooner than he has said publicly,” prosecutors in Braunschweig, Germany said in a statement issued Friday.
(Click Here to see the examination of Martin Winterkorn’s role in the diesel scandal.)
The German investigation now is probing 37 different suspects, up from 21 previously. During just the last week, 28 different offices and homes were searched for possible evidence.
Like their German counterparts, the U.S. Justice Department aimed to target what then Attorney General Loretta Lynch called “flesh-and-blood humans,” not just a “faceless corporation.” Barely a week before the Obama Administration left office, Lynch and her subordinates announced VW would pay a $4.3 billion criminal fine, with six current and former employees facing criminal charges.
Only one of them has been arrested, so far, the other five now remaining in Germany which does not have an extradition treaty with the U.S. that would allow them to be brought to justice.
During a Washington, D.C. news conference, AG Lynch indicated additional indictments were possible. News reports from Germany subsequently indicated that Volkswagen lawyers have advised potential corporate targets to avoid travel to the U.S.
All told, VW has now spent more than $20 billion in the U.S. alone to cover the diesel emissions scandal. That includes not only the criminal penalty but a $14.7 billion civil settlement announced last July, and more than $1 billion that will be paid to VW dealers. Shareholders are suing the automaker for alleged losses and additional fines and criminal charges are possible in Germany and other parts of the world.
Earlier this week, a senior U.S. EPA official said one positive result from the scandal is that the hefty penalties paid for VW will serve as a “deterrent” to other automakers considering illegal activity.
The agency also this month accused Fiat Chrysler Automobiles of rigging its U.S. diesel engines. That case will now be handled by the Trump Administration’s new Justice Dept. team.