Dieselgate probe snares 5 more Volkswagen executives

January 12, 2017

Yesterday, Volkswagen and the U.S. government reached an agreement that could mark the beginning of the end of the Dieselgate scandal. Volkswagen will pay $4.3 billion in criminal and civil fines, and the company agreed to do something that most corporations accused of wrongdoing avoid these days: publicly admit guilt.

Of course, there's still the matter of figuring out how Dieselgate came to be. To that end, five of Volkswagen's German executives were indicted Wednesday on charges of conspiring to commit fraud and violating the U.S. Clean Air Act. A sixth was arrested earlier this week in Miami, as he tried to board a plane to Germany.

A not-so-small secret

The arrests mark an ironic turn of events in Volkswagen's emissions-test-cheating scandal.

Shortly after the world began hearing about Dieselgate in September 2015, then-head of Volkswagen Group of America, Michael Horn, issued a statement to apologize to VW owners. He said that cheating on emissions tests "do not reflect our values or who we are as a company".

A few months later, Volkswagen's chair, Hans Dieter Poetsch, said that the misdeeds appeared to be the work of a small group of employees, mostly lower-level. (For what it's worth, Poetsch himself has been investigated for misdeeds in the wake of the scandal.)

All of which is thrown into question with these new indictments. Yes, the number of people facing jail time is fairly small, considering Volkswagen's huge workforce. However, as we've seen, the scandal doesn't appear to have been very limited.

Reporting suggests that the defeat devices in question were created by Audi as far back as the 1990s, and German supplier Bosch likely had a hand in their development, too. At least some Volkswagen employees and managers knew about the devices in 2006, three years before they began appearing on vehicles.

So, by all appearances there were quite a few people in on the "clean diesel" joke.

Nor were those people of especially low rank. In fact, U.S. officials note that the scandal depended heavily on Volkswagen executives, including the five indicted yesterday: Richard Dorenkamp, Bernd Gottweis, Jens Hadler, Heinz-Jakob Neusser, and Jürgen Peter. The sixth, mentioned above, was Oliver Schmidt. 

According to the Department of Justice, the six are all managers involved in the development of Volkswagen engines and work regularly in the U.S. and Germany. They were directly responsible for issuing the orders to install the illegal defeat devices. 

While Schmidt remains in U.S. custody, the fate of the other five remains uncertain. Due to the close ties between America and Germany, and due to the fact that Germany itself is more than a little frustrated with Volkswagen right now, you might think that they'd be extradited in the near future. However, Germany has a longstanding policy of not extraditing its citizens to countries outside Europe. So for now, the five appear safe--confined to Germany for the rest of their lives, but safe.

Stay tuned.

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