State lawsuits allege Volkswagen diesel deception had deeper roots
The deception involved in Volkswagen鈥檚 thwarting of diesel emissions tests spanned nearly a decade and grew to involve senior executives, New York鈥檚 attorney general charged in a civil lawsuit on Tuesday.
The allegations offered by Attorney General Eric Schneiderman contradict Volkswagen鈥檚 assertions that the deception was limited to a small group of people. Attorneys general in Massachusetts and Maryland also filed separate suits on Tuesday.聽
Citing internal VW documents, the New York suit provides a more detailed portrait of how the company came to install so-called 鈥渄efeat devices鈥� that could evade emissions tests聽and deceive regulators in the US and Europe.
By contradicting VW鈥檚 assertions and instead alleging that high-level officials knew about the devices as early as 2014, the states鈥� charges could represent a new threat to the company, which agreed in June to a nearly $15 billion settlement with consumers and environmental regulators.
鈥� reveal a culture of deeply-rooted corporate arrogance, combined with a conscious disregard for the rule of law and the protection of public health and the environment,鈥� Attorney General Schneiderman said in a statement.
All three suits allege , Reuters reports. The company has said more than 11 million vehicles with the emissions-cheating software were sold around the world.
The New York suit alleges that in March 2014, VW learned that had conducted real-world tests on two diesel cars, finding the cars had emissions five to 35 times the legally allowable limits.
That led Frank Tuch, then the head of group quality management for Volkswagen, to write in an email to former chief executive Martin Winterkorn in May that 鈥渁 thorough explanation for the dramatic increase in NOx [nitrous oxide] emissions cannot be given to the authorities,鈥� according to the suit. German prosecutors have said that Mr. Winterkorn is under investigation.
The suit also alleges that Winterkorn and Matthias M眉ller, then the head of project management at Audi, VW鈥檚 luxury car brand, were aware of a 2006 decision not to equip Audi cars with equipment needed to meet American emissions requirements.
In the interest of saving money, the company instead decided to install defeat devices in the cars, the suit says.
The suit , who replaced Winterkorn as VW鈥檚 chief executive in September, of having specific knowledge of the device, The New York Times reports.
Both men have previously denied any involvement in the wrongdoing. In October, Michael Horn, then the company鈥檚 top US executive, told Congress that the deception only went as far as
But the New York suit contradicts that statement, calling the installation of the software 鈥渢he result of a willful and systematic scheme of cheating by dozens of employees at all levels of the company regarding emissions.鈥�
A VW spokeswoman criticized the states鈥� decision to bring the suits.
The states' allegations "are essentially not new and we have been addressing them in our discussions with US federal and state authorities," spokeswoman Jeannine Ginivan told Reuters. "It is regrettable that some states have decided to sue for environmental claims now."
The suit reveals more about the role Audi played in the creation of the software that could turn off some emissions functions.
In 1999, engineers at the luxury carmaker developed technology to quiet diesel vehicles, but discovered that the technology, which was rolled out in 2004, pushed the vehicles above European emissions standards.
To combat that, they added software they called the 鈥渁coustic function,鈥� which turned off the software and allowed the car to meet the European standards, according to the suit.
But faced with engineering challenges, VW later adapted the defeat devices to its own diesel cars sold in the US.
In September, the company that the software allowed the cars to pollute more on the road than during government tests 鈥撀爑p to 40 times the amount allowed, according聽the Wall Street Journal reports.
When VW agreed to the $14.7 billion partial settlement with regulators and owners last month, some advocates said the increased scrutiny was already spurring changes.
鈥溌爓hether the size of this settlement is sufficient to deter future use of defeat devices,鈥� wrote Drew Kodjak, executive director of the nonprofit International Council on Clean Transportation, in a blog post last week.
鈥淏ut considering how much the likelihood of discovery and the magnitude of the consequences have increased in just nine months, it鈥檚 clear that the odds in favor of a genuinely cleaner transportation sector have changed dramatically for the better,鈥� he wrote.
The states鈥� charges come as VW is still negotiating with the Justice Department and the Environmental Protection Agency on fines as part of a separate settlement, Reuters reports. The Justice Department is also pursuing a criminal investigation.
The suits didn鈥檛 say what penalties the states would seek, but it could be hundreds of million of dollars, the Times reports.
"This is an example of a company that not only engaged in deception and fraud on a brazen scale but covered up that deception," Maura Healey, the Massachusetts attorney general, said at a news conference on Tuesday. The conduct "reflects a corporate culture that had no regard for the law, no respect for the American people and no regard for the environment or peoples' health."
