Volkswagen Pleads Guilty to Criminal Charges in Emissions Scandal - TIME Business

Volkswagen Pleads Guilty to Criminal Charges in Emissions Scandal Posted: 11 Jan 2017 11:02 AM PST (WASHINGTON) — Six high-level Volkswagen employees from Germany were indicted in the U.S. on Wednesday in the VW emissions-cheating scandal, while the company itself agreed to plead guilty to criminal charges and pay $4.3 billion — by far the biggest fine ever levied by the government against an automaker. In announcing the charges and the plea bargain, Justice Department prosecutors detailed a large and elaborate scheme inside the German automaker to commit fraud and then cover it up, with at least 40 employees allegedly involved in destroying evidence. “Volkswagen obfuscated, they denied and they ultimately lied,” Attorney General Loretta Lynch said. Prosecutors may have trouble bringing the executives to trial in the U.S. German law generally bars extradition of the country’s citizens except within the European Union. Privately, Justice Department officials expressed little optimism that the five VW executives still at large will be arrested, unless they surrender or travel outside Germany. Still, the criminal charges are a major breakthrough for a Justice Department that been under pressure to hold individuals accountable for corporate misdeeds ever since the 2008 financial crisis. Lynch held out the possibility of charges against more high-ranking VW executives. “We will continue to pursue the individuals responsible for orchestrating this damaging conspiracy,” she said. VW admitted installing software in diesel engines on nearly 600,000 VW, Porsche and Audi vehicles in the U.S. that activated pollution controls during government tests and switched them off in real-world driving. The software allowed the cars to spew harmful nitrogen oxide at up to 40 times above the legal limit. U.S. regulators confronted VW about the software after university researchers discovered differences in testing and real-world emissions. Volkswagen at first denied the use of the so-called defeat device but finally admitted it in September 2015. Even after that admission, prosecutors said, company employees were busy deleting computer files and other evidence. The fines easily eclipse the $1.2 billion penalty levied against Toyota in 2014 over unintended acceleration in its cars. VW also agreed to pay an additional $154 million to California for violating its clean air laws. The penalties bring the cost of the scandal to VW in the United States to nearly $20 billion, not counting lost sales and damage to the automaker’s reputation. Volkswagen previously reached a $15 billion civil settlement with environmental authorities and car owners in the U.S. under which it agreed to repair or buy back as many as a half-million of the affected vehicles. The company pleaded guilty to conspiracy, obstruction of justice and importing vehicles by using false statements. Under the agreement, VW must cooperate in the continuing investigation let an independent monitor oversee its compliance for three years. The six supervisors indicted by a federal grand jury in Detroit were accused of lying to environmental regulators or destroying computer files containing evidence. All six are German citizens, and five remained in Germany. The only one under arrest was Oliver Schmidt, who was seized over the weekend in Miami during a visit to the U.S. Schmidt was in charge of VW’s compliance with U.S. environmental regulations. Those indicted also included two former chiefs of Volkswagen engine development and the former head of quality management and product safety. Prosecutors said one supervised 10,000 employees. All six were charged with conspiracy to defraud the U.S. by making false statements to regulators and the public. Three were also charged with fraud and clean-air violations. Government documents say one engine development supervisor asked an assistant to search another supervisor’s office for a hard drive that contained emails between them. Then another assistant was asked to throw it away, prosecutors said. According to the plea agreement, Volkswagen officials began deceiving the Environmental Protection Agency and other regulators starting in 2006, when they realized new diesel engines wouldn’t meet 2007 emissions standards. Under the direction of supervisors, VW employees borrowed the defeat device idea from VW’s Audi luxury division, which was developing different engines with similar software. In November 2006, some employees raised objections to the defeat device to the head of VW-brand engine development, prosecutors said. That official allegedly directed the employees to continue and warned them “not to get caught.” In 2014, VW employees learned about a West Virginia University study that found emissions discrepancies in VWs. Three of the supervisors and other employees decided not to disclose the defeat device to U.S. regulators, prosecutors said. In August 2015, a VW employee ignored instructions from supervisors and told U.S. regulators about the device. VW also faces an investor lawsuit and criminal probe in Germany. In all, some 11 million vehicles worldwide were equipped with the software.

What the last 48 hours told us about Trump's next 4 years - CNN

What the last 48 hours told us about Trump's next 4 years

By Gregory Krieg, CNN

Updated 0650 GMT (1450 HKT) January 13, 2017

Trump: People don't care about my tax returns

NEW YORK, NY - JANUARY 11: President-elect Donald Trump speaks at a news cenference at Trump Tower on January 11, 2017 in New York City. This is Trump's first official news conference since the November elections. (Photo by Spencer Platt/Getty Images)

Trump's first presser as President-elect

NEW YORK, NY - JANUARY 11: President-elect Donald Trump speaks at a news cenference at Trump Tower on January 11, 2017 in New York City. This is Trump's first official news conference since the November elections. (Photo by Spencer Platt/Getty Images)

Trump pans intel claim, shouts down reporter

CNN: Why Trump's 'fake news' claim is wrong

Trump: Intel report is all 'fake news'

Trump Acosta split

Trump shuts down CNN reporter

President-elect Donald Trump speaks during a news conference in the lobby of Trump Tower in New York, Wednesday, January 11, 2017.

Trump on hacking DNC: I think it was Russia

Trump: Pence getting approvals for wall

President-elect Donald Trump speaks during a news conference in the lobby of Trump Tower in New York, Wednesday, January 11, 2017.

Trump describes Obamacare plan

Spicer: Russia-Trump report is disgraceful

Trump: I will turn business over to my sons

trump acosta split

CNN reporter: Spicer threatened to kick me out

Trump: People don't care about my tax returns

NEW YORK, NY - JANUARY 11: President-elect Donald Trump speaks at a news cenference at Trump Tower on January 11, 2017 in New York City. This is Trump's first official news conference since the November elections. (Photo by Spencer Platt/Getty Images)

Trump's first presser as President-elect

NEW YORK, NY - JANUARY 11: President-elect Donald Trump speaks at a news cenference at Trump Tower on January 11, 2017 in New York City. This is Trump's first official news conference since the November elections. (Photo by Spencer Platt/Getty Images)

Trump pans intel claim, shouts down reporter

CNN: Why Trump's 'fake news' claim is wrong

Trump: Intel report is all 'fake news'

(CNN)President-elect Donald Trump went nose-to-nose Wednesday with a press corps itching to cross-examine him after more than five months at arm's length, while his top nominees faced off with senators during a strategic crush of confirmation hearings.

The raucous 48 hours, beginning on Capitol Hill early Tuesday, represented an unofficial inauguration of the 45th president -- a whirlwind welcome to Trump's Washington, a chaotic and contentious place where graying norms seem destined to clash relentlessly with an idiosyncratic administration.

By Thursday morning, after a Senate vote-a-rama effectively paved the way for GOP efforts to dismember Obamacare, new information had emerged and old suspicions were affirmed, as the final countdown to the historic transition neared its end.

Here are seven lessons -- and the moments that defined them -- from the past two days:

1. The lesson: Trump escalates his conflicts with the media and other perceived enemies

The moment: At his news conference Wednesday, the President-elect refused to hear a question from CNN's Jim Acosta. Incoming press secretary Sean Spicer then threatened to throw Acosta out of the room if he persisted in asking.

"I have great respect for the news, great respect for freedom of the press and all that," Trump said during his long-delayed press conference Wednesday.

But the lovefest had its limits, as the President-elect ripped CNN and BuzzFeed over a pair of stories published the day before -- CNN's a carefully sourced report; BuzzFeed's a less scrupulous document dump -- and purposefully conflated the two in order to avoid answering serious questions about his and his staff and advisers' alleged ties to Russia.

Trump passed over Acosta during the news conference and Spicer threatened to eject him if he spoke up again. When ABC's Cecilia Vega pressed Trump on the matter, the President-elect spent nearly 90 seconds filibustering before heading for the elevators, where he eventually denied to reporters that he or anyone on his team had been in contact with the Russians during the campaign.

2. The lesson: Republican Russia hawks could emerge as Trump's most galvanizing opponents

The moment: Marco Rubio on Wednesday blitzed secretary of state nominee Rex Tillerson over his connections to Russia and whether, in his opinion, Vladimir Putin was a "war criminal."

Unlike Alabama Sen. Jeff Sessions a day earlier, Tillerson, the Exxon Mobil chief with extensive business ties to Moscow, was confronted with a blistering round of inquiries from the senators who will decide if his nomination vote goes to the full chamber. Rubio in particular pressed Tillerson with a categorical question.

"Is Vladimir Putin a war criminal?" the Florida senator asked.

Tillerson hedged, saying he "would not use that term" and required "much more information" before giving a clear answer.

Rex Tillerson grilled on foreign policy

Rex Tillerson grilled on foreign policy 03:33

Rubio pressed on, running off a laundry list of Russian aggression, from its actions in Aleppo to the murder of dissidents and journalists, but Tillerson didn't budge.

Further questions about human rights abuses in Saudi Arabia and the Philippines were met with similar demurrals.

By late Wednesday, Amnesty International USA had weighed in with their growing concerns.

"After a day of questioning, Tillerson's commitment to human rights in the US and abroad is in serious question," the group's executive director, Margaret Huang, said in an email. "He must use tomorrow's hearing to clarify today's troubling statements."

3. The lesson: A Justice Department led by Jeff Sessions will not vigorously police the police

The moment: Asked on Tuesday for his opinion on the Justice Department's use of consent decrees to oversee and reform police departments with records of abuse, Sessions expressed serious doubts.

During the tenures of Eric Holder and Loretta Lynch, the Justice Department has been proactive in applying oversight measures to local law enforcement outfits found to have committed civil rights violations.

The department has used a tool called a consent decree -- a period of enforced reform, with terms agreed by municipal authorities and Justice Department officials as a means of avoiding federal court action. Ferguson, Missouri and Cleveland are among the wide range, in size and prominence, of cities to sign on after high-profile offenses.

"I think there is concern that good police officers and good departments can be sued by the Department of Justice when you just have individuals within a department that have done wrong," Sessions said when asked during the first day of his hearing. "These lawsuits undermine the respect for police officers and create an impression that the entire department is not doing their work consistent with fidelity to law and fairness, and we need to be careful before we do that."

With an attorney general -- and Sessions is all but guaranteed to be confirmed -- so openly critical of the process, it's hard to imagine the Trump Justice Department will be initiating the reviews that became a hallmark of its predecessor.

4. The lesson: Protesters -- not a beleaguered Democratic minority -- are set to emerge as leaders in the anti-Trump resistance

The moment: The Sessions confirmation hearings, Day 1. While senators mostly treated Sessions with deference during what many had expected to be a fraught and tense confirmation hearing, Democrats were not nearly as vocal as the demonstrators that frequently interrupted the proceedings.

Protesters disrupt Sessions' AG hearing

Protesters disrupt Sessions' AG hearing 01:30

Protesters from a variety of grassroots progressive groups and larger liberal organizations were often the harshest voices in the room during Sessions' hearings. They rose at seemingly regular intervals to rail against the Alabama senator, who was denied a federal judgeship in 1986 amid allegations he made racist comments to a colleague. More recently, Sessions has emerged as a vocal backer of voter ID laws.

Activist Kai Newkirk, who was arrested during a sit-in at Sessions' office, told CNN Wednesday he was willing to be jailed because "Sessions' history and present positions make it undeniably clear that he cannot be entrusted to uphold equal justice, civil rights, or the right to vote."

Democrats on the Senate Judiciary Committee panel were mostly restrained in their questioning, with Minnesota's Al Franken the rare Sessions colleague to confront him over his past record -- deliberately overstated, Franken suggested -- as a civil rights proponent.

With their party set to turn over the White House, and already nearly powerless in Congress, Democrats sitting on Capitol Hill could soon take a backseat to progressives and allied groups planning to stand up to Trump with mass protests and direct actions.

5. The lesson: Difficult conversations about race in policy clashes and political conflicts aren't going anywhere during the Trump era.

The moment: Both Rep. John Lewis, the civil rights hero, and Sen. Cory Booker, a Democrat from New Jersey, testified against Sessions on the second day of his confirmation hearings.

Booker to Sessions: 'Love all our citizens'

Booker to Sessions: 'Love all our citizens' 02:04

As their colleagues came under fire for offering what liberals saw as an overabundance of senatorial courtesy, Lewis, Booker and Congressional Black Caucus Chairman Rep. Cedric Richmond zeroed in on Sessions' history with a sharper edge.

"Those who are committed to equal justice in our society wonder whether Sen. Sessions' call for 'law and order' will mean today what it meant in Alabama when I was coming up back then," Lewis said during his testimony. "The rule of law was used to violate the human and civil rights of the poor, the dispossessed, people of color."

Booker, meanwhile, sought to channel the Rev. Martin Luther King Jr., when he said, "The arc of the moral universe does not just naturally curve toward justice, we must bend it."

"America needs an attorney general who is resolute and determined to bend the arc," Booker testified. "Sen. Sessions' record does not speak to that desire, intention or will."

Booker's decision to so publicly oppose a Senate colleague -- he is the first to do so in a confirmation hearing -- shed light on the depth of the racial fault lines that figure to roil the new administration and its critics.

Difficult conversations are obviously not new in this country and they escalated during the course of the Obama administration, when Americans were focused at various times on Ferguson, Baltimore, Black Lives Matter and the very visceral fight over voting rights and the Confederate flag. Trump and his cabinet will bring a very different perspective than Obama and his. Partisan fights over race seem destined to escalate over the coming four years.

6. The lesson: The role of the FBI, in particular Director James Comey, in the 2016 campaign will remain a flashpoint in 2017

The moment: Democrats were alternately outraged and baffled when, in the course of a hearing with the Senate Intelligence Committee, Comey refused to comment on whether the bureau was investigating links between President-elect Donald Trump's campaign and Russia.

The question came from Sen. Ron Wyden, an Oregon Democrat. He wanted to know whether the FBI had investigated potential contacts between the Trump campaign and Russia.

The director, however, was not in a forthcoming mood and refused to comment.

Maine Sen. Angus King, an independent who caucuses with the Democrats, couldn't help himself.

"You didn't say one way or another whether even there was an investigation underway?" King asked again.

"Correct," Comey said. "I don't, especially in a public forum, we never confirm or deny a pending investigation."

"The irony of your making that statement here, I cannot avoid," King said, a clear reference to Comey's looser lips during the campaign, when he jolted the contest with a very late public revelation that his agents would renew their review of emails potentially tied to Hillary Clinton's private server.

Clinton was cleared, again, days later, but many Democrats believe the brouhaha cost her precious votes in a race that was ultimately decided by the narrowest of margins in a handful of states. Like Trump, their grudge is likely to endure.

7. The lesson: The leader of the Democratic Party is Barack Obama -- and no one else comes close

The moment: In his farewell address from Chicago on Tuesday night, the outgoing president delivered a stark warning about the challenges facing American democracy while, both in the speech and recent remarks, offering a more coherent path forward than anyone else in his party.

Obama said goodbye in much the same way he entered national politics -- with an appeal to a shared decency and common interests across the partisan divide. But a decade on from the beginning of his brief Senate stay, the twice-elected president addressed a country more openly at odds over race.

Watch President Obama's full farewell address

Watch President Obama's full farewell address 50:07

"After my election," Obama told supporters in McCormick Place, "there was talk of a post-racial America. Such a vision, however well-intended, was never realistic. Race remains a potent and often divisive force in our society."

Framing that divide as a "threat to our democracy," Obama pleaded with Americans to emerge from their digital bubbles and more openly engage with political opposites.

"If you're tired of arguing with strangers on the Internet," he said to laughs, "try talking with one of them in real life."

But his appeal to economic solidarity -- which sounded a lot more like Bernie Sanders than his would-be successor Hillary Clinton -- struck hardest.

"If every economic issue is framed as a struggle between a hardworking white middle class and an undeserving minority, then workers of all shades are going to be left fighting for scraps while the wealthy withdraw further into their private enclaves," he said, while pointedly encouraging Democrats to engage "the middle-aged white guy."

Whether that adds up to a winning strategy remains to be seen, but for a night at least, the departing Obama towered over the Democrats he leaves behind to take on Trump.