VW emissions-cheating deal could put employees in hot seat

FILE - In this Oct. 13, 2015, file photo, a Volkswagen Touareg diesel is tested in the Environmental Protection Agency's cold temperature test facility in Ann Arbor, Mich. The imminent criminal plea deal between Volkswagen and U.S. prosecutors in an emissions-cheating scandal could be bad news for one group of people: VW employees who had a role in the deceit or subsequent cover-up. VW on Tuesday, Jan. 10, 2017, disclosed that it is in advanced talks to settle the criminal case by pleading guilty to unspecified charges and paying $4.3 billion in criminal and civil fines, a sum far larger than any recent case involving the auto industry. (AP Photo/Carlos Osorio, File)

By TOM KRISHER and
DAVID MCHUGH
AP Business Writers
DETROIT — The imminent criminal plea deal between Volkswagen and U.S. prosecutors in an emissions-cheating scandal could be bad news for one group of people: VW employees who had a role in the deceit or subsequent cover-up.
VW on Tuesday disclosed that it is in advanced talks to settle the criminal case by pleading guilty to unspecified charges and paying $4.3 billion in criminal and civil fines, a sum far larger than any recent case involving the auto industry.
It’s likely that VW will agree to cooperate in the probe, turning over documents and other information, said David M. Uhlmann, a former chief of the Justice Department’s Environmental Crimes Section who is now a University of Michigan law professor.
“Companies often face the dilemma of whether to protect their employees or cooperate with government investigations, but almost always end up deciding in the company’s best interest to share what information they have,” Uhlmann said.
Although VW’s communications with lawyers may be exempt, emails between employees and company executives should help prosecutors reach as far up VW’s organizational chart as the scandal went, he said. Prosecutors now have three witnesses giving them information and have arrested Oliver Schmidt, VW’s former head of U.S. environmental compliance who dealt with the EPA and California Air Resources Board after the scandal was uncovered.
The cooperation of witnesses and the company should help investigators determine if the scandal went beyond VW’s engineers, Uhlmann said. But extraditing any executives from Germany would be a problem.
Volkswagen has admitted equipping diesel cars with sophisticated software that turned on emissions controls when engines were being tested by the Environmental Protection Agency, then turned them off during normal driving. The software, called a “defeat device” because it defeated the emissions controls, improved engine performance but spewed out harmful nitrogen oxide at up to 40 times above the legal limit.
Volkswagen has reached a $15 billion civil settlement with environmental authorities and car owners in the U.S. under which it agreed to buy back up to 500,000 vehicles.