Dieselgate Continues To Haunt VW As FTC Seeks Info On Destroyed Documents

The Dieselgate scandal keeps engulfing Volkswagen. This time the Federal Trade Commission has asked the court to let it seek answers as to whether there was document destruction.

With vehicle buybacks about to begin, Volkswagen found itself hit with a new round of questions involving the Dieselgate scandal. Approved by Judge Charles Breyer two weeks ago, the repurchase program is set to begin at the end of the month. And, even as the buyback program begins, the Federal Trade Commission (FTC) is trying to determine whether Volkswagen intentionally destroyed documents related to the self-inflicted emissions scandal.

Reports Surface Of Second Defeat Device In Dieselgate

Filed late Thursday, the court documents noted that the federal agency has been investigating document destruction allegations since March. The FTC told the court that it had questioned a VW witness in August. The witness could not answer many questions regarding the scandal. FTC asked for the court’s approval to interview another VW official.

Widespread Diesel Cheating

It is now fully 14 months since the automaker admitted it had engaged in a widespread emissions cheating conspiracy to make it appear as if its vehicles passed emissions tests when they did not. Indeed, the vehicles emitted up to 40 times the levels of oxides of nitrogen allowed by Environmental Protection Agency (EPA) rules.

Jeannine Ginivan, VW spokeswoman, said Friday that VW “continues to cooperate with the U.S. Department of Justice and work with other government agencies to make things right for our customers and achieve a fair resolution.”

The FTC investigation into document destruction is just another in the many threads of the Dieselgate scandal that seemed to have come unraveled in the last week. For example, investigators are looking into reports that Audi deployed cheating devices in its gasoline-engined vehicles as recently as last May, well after it had admitted it had also cheated with diesels. More egregious, the new allegations raise questions as to whether Volkswagen had adjusted carbon dioxide emissions data so that it looked as if its vehicles passed those tests, too. The importance of this case is that CO2 is a critical component of global warming.

Also, the head of Volkswagen AG’s executive board, Hans Dieter Poetsch is reportedly under probe related to stock notification irregularities. And, the head of Audi, Rupert Stadler, is reportedly facing a new round of questions from an internal probe of the automaker by Jones Day regarding the latest defeat device allegations.

Whistleblower, State Lawsuits

Volkswagen has faced document destruction complaints in a whistleblower lawsuit as well as in actions by individual states. In March, Daniel Donovan, a fired Volkswagen of America employee, filed a whistleblower lawsuit – since settled – that accused VW of obstructing justice in Dieselgate probes by deleting and destroying documents.

Donovan, an IT worker in VW’s general counsel office, said in his suit his firing nearly a year ago was “because of his refusal to participate in a course of action” that would destroy evidence and obstruct justice. After that suit’s settlement, Donovan agreed to cooperate with VW’s internal investigation.

Meanwhile, three states filed suit against the automaker in July claiming at least eight employees in VW’s engineering department had either deleted or removed incriminating data in August 2015 after a warning by a senior attorney of an impending order to preserve documents. The state lawsuits said, some but not all documents had been recovered.

In other legal action, lawyers for VW dealers are seeking payment for their legal work. Volkswagen has already agreed to pay attorneys for 2.0-liter turbodiesel owners involved in the Dieselgate class-action lawsuit $175 million in fees. This week’s action by the dealer lawyers would add another $36.2 million to that figure.

The Dieselgate scandal, already one of the largest individual cases of corporate wrongdoing in history, has cost VW billions. In the Dieselgate class-action lawsuit settlement, the automaker agreed to spend up to $10.03 billion to buy back and compensate the owners of up to 475,000 polluting turbodiesel vehicles.

Infrastructure, Mitigation Payments

Further, the automaker has agreed to pay $4.5 billion in infrastructure and mitigation payments as part of the same settlement. And, dealers are to receive $1.2 billion in a separate action as compensation for Dieselgate.

The automaker is still facing criminal actions and penalties in the U.S. Meantime, prosecutors in Germany are also conducting multiple criminal and civil probes. And, there are reportedly criminal probes ongoing in Italy, France, India and South Korea.

Sources: Reuters, Automotive News