The indictment of US justice against the former VW boss Martin Winterkorn contradicts the previous defense strategy of the car company. What did the then leadership know about diesel fraud?
VW plant in Wolfsburg (archive)
Friday, 04.05.2018
16:53 clock
This Thursday should actually be a liberation for Volkswagen. The new CEO Herbert Diess promised his shareholders more openness and honesty at the Annual General Meeting in Berlin. Volkswagen must become “more decent”, namely “across all levels of hierarchy”. The audience was well received by the audience: “That’s a whole new sound,” praised a supervisory board.
But that same evening, Volkswagen was caught up in his past, once again. The US Department of Justice announced that it would sue Martin Winterkorn, Diess’ predecessor as VW boss. He is accused of conspiracy and fraud in the diesel scandal. In the US now threaten him up to 25 years imprisonment and 275,000 euros fine.
New VW boss Herbert Diess (r.), Predecessor Martin Winterkorn (archive image)
For Winterkorn this changes almost nothing. He has always denied the allegations against him. He is charged but not yet convicted. Since the German authorities usually do not extradite their citizens, he faces no further consequences at first – as long as he does not leave Germany.
For the Volkswagen Group, however, the push by the US authorities represents a risk that is difficult to calculate. The previous line of defense, the diesel fraud was only the work of some engineers, threatens to collapse: With the indictment against Winterkorn the diesel scandal is approaching close to the then top management.
Cooperated with the US authorities only to appearances
“If the allegations against Winterkorn can actually be proven, the liability consequences for Volkswagen triggers,” says a criminal lawyer involved in the proceedings. In other words, if former executives were aware of or even involved in diesel fraud, this could result in further fines and shareholder claims.
The US investigators accuse Winterkorn, he had been involved in diesel fraud since May 2006. Together with other employees one should have agreed to VW, “US regulators and US customers to cheat” and violate the emissions laws, as it says in the 42-page indictment. The investigators refer mainly to meetings of VW engineers, who have been in the US for some time as the accused: They have responded to tightened US emissions laws with a fraud software – the now infamous “defeat device”.
VW headquarters in Wolfsburg
Clearer seems the evidence against Winterkorn in the charge of the later cover-up. The SPIEGEL reported on it already in July 2016. At the latest in May 2014 VW was internally known: In road tests VW vehicles exceeded the allowable limit values for nitrogen oxides (NOx) in some cases 35 times. “A sound explanation for the dramatically increased NOx emissions can not be given to the authorities,” says a letter of quality manager and Winterkorn confidant Bernd Gottweis, dated May 22, 2014. It may be assumed, according to Gottweis, “that the authorities will investigate the VW systems to see if Volkswagen has implemented a test recognition in the engine control unit software (so-called defeat device)”.
Winterkorn received the letter with his “weekend mail”. For the US investigators, the case is clear: Winterkorn and his “co-conspirators” had pursued a “strategy of concealment”. They would have only cooperated with the US authorities.
Questions also raise a “secret” declared VW presentation in July 2015. Her title: “Diesel Cars USA, Test Cycle: Government Strategy”. It is openly discussed whether Volkswagen should communicate to the authorities “offensive” or “defensive”. The US investigators assume that the VW representatives have decided only for “partial publications” without revealing the illegal defeat devices. Winterkorn agreed.
Also in Braunschweig is determined
The VW Group is holding back so far and wants to take the “individual procedure” no position. First, the VW lawyers want to examine the US documents. In the company, it is assumed that Volkswagen in the US threaten no further criminal consequences: Finally, the group has already agreed with the local authorities on a settlement in the amount of about 15 billion euros.
However, the German authorities could also bring charges against Winterkorn. The prosecutor Braunschweig has been investigating for some time on suspicion of fraud and market manipulation. According to chief prosecutor Klaus Ziehe, Winterkorn’s lawyers are yet to receive access to the file this summer.
His authority is already working closely with the US judiciary. In yesterday’s press statement, the US investigators even explicitly thank the Braunschweig prosecutors for their help.
Should there be an indictment and possibly even a conviction, Winterkorn’s ex-employer would also have a problem: plaintiff lawyers claiming damages from Volkswagen would then have much better arguments.
But even more serious is another risk: that Volkswagen’s reputation continues to be damaged. “The qualities of our company were often overshadowed since the outbreak of the diesel crisis,” said the VW boss Diess in his speech on Thursday.
This shadow has increased significantly once again yesterday.