US Justice Department Files Criminal Charges Against Former Volkswagen CEO

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Former Volkswagen CEO Martin Winterkorn has now been charged by the US Justice Department with conspiracy in relation to the coverup at Volkswagen relating to the diesel vehicle emissions cheating scandal.

The criminal charges against the ex-Volkswagen CEO were apparently filed back in March in secret, and have now simply been unsealed (as of Thursday) by a US District Court.

US Attorney General Jeff Sessions commented on the charges: “If you try to deceive the United States, then you will pay a heavy price.”

The news of the criminal charges is particularly interesting due to the fact that it’s a rare thing nowadays for the CEO of a large company to face criminal charges following from illegal activity at the companies in question.

That noted, Martin Winterkorn is unlikely to ever face justice in the US despite the indictment, as Germany generally doesn’t extradite its citizens to face charges in foreign countries. The former Volkswagen CEO is also being investigated by authorities in Germany, though, so perhaps he will end up facing criminal charges there even if not in the US.

As some further background here, Winterkorn resigned from his position at Volkswagen just days after the diesel vehicle emissions scandal hit the news — in contrast to several other senior figures at the company who have remained in their positions to this day.

As speculated by some commentators in an earlier article of ours on the subject, this reality may well be due to worries that if senior figures at the company are dismissed, they will start talking to authorities and/or reporters. While there’s no way to prove that speculation as of yet, there’s a fair chance that there’s some truth to it.

Reuters provides more: “A source close to Winterkorn told Reuters on Friday that Winterkorn is in Germany, and will remain there. … The indictment reopens the question of whether other senior VW executives knew about the scandal and threatens to prolong the crisis. VW shares slipped 0.2% by 0915 GMT.

“Winterkorn, 70, is charged with 4 felony counts, including conspiracy to defraud the United States, wire fraud, and violating the Clean Air Act from at least May 2006 through November 2015 after the company admitted using illicit software that allowed Volkswagen diesel vehicles to emit excess pollution without detection. … Winterkorn in January 2017 told German lawmakers he had not been informed of the cheating early and would have halted it had he been aware.”

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As noted earlier in this article, numerous execs at Volkswagen have remained in their positions straight through the scandal, including the former chief financial officer, Hans-Dieter Poetsch (now chairman of the supervisory board); the former head of Audi, Rupert Stadler; and the firm’s labor head, Bernd Osterloh (also on the supervisory board).

Notably, new Volkswagen CEO Herbert Diess was also employed at the company before the scandal broke … for only a few weeks time, though, as he had just hopped over from BMW.

The Reuters coverage continues: “Volkswagen has said that the decision to install illegal software manipulation devices to disguise real-world pollution levels, was taken in 2006 below management board level. … Volkswagen has never commented on when individual management board members learned about the defeat devices. VW eventually disclosed to US authorities that it had used illegal software in its cars on September 3, 2015.

“Volkswagen did not inform investors until the US Environmental Protection Agency alerted the public on September 18. VW chose not to disclose earlier because it felt the matter could be resolved amicably with US authorities, the annual report said.”

In the recent statement from US Attorney General Jeff Sessions he noted that the new charges against Winterkorn were a sign of the authority’s assertion that: “Volkswagen’s scheme to cheat its legal requirements went all the way to the top of the company.”

The assertions made in the indictment include:

— Winterkorn being informed of the emissions cheating via internal memo back in May 2014. Winterkorn has previously stated that he wasn’t aware of it until August 2015.

— That a July 27, 2015 meeting included a PowerPoint presentation during an in person meeting with company execs where Winterkorn and others were provided a “clear picture” of the company’s fraud with regard to US emissions testing. It was made clear at that meeting that the company was using software to rig emissions testing, reportedly.

— That Winterkorn agreed to a plan proposed by Volkswagen employees to seek approval for 2016 diesel car models without revealing the existence of defeat device software to authorities.

Altogether, a total of 9 people have now been charged in connection with the scandal—- 6 of which are now seemingly hiding out in Germany and relying upon the country’s no-extradition policies to avoid the US justice system.

Very notable here, authorities in Germany have reportedly refused to comment on the new charges against the former Volkswagen CEO. It’ll be interesting to see how the indictment affects relations between the governments of the US and Germany (if much at all).

We would reach out to Volkswagen about the latest news for commentary on some matters that interest us, but, yeah, there’s no way they’d provide the honest and complete answers we’d like.

On a highly related note, Volkswagen has now begun rolling out its new “Electrify America” electric vehicle charging network in the US — a network which was mandated by US authorities as part of the deal reached between the two to resolve earlier criminal charges against the company.