Who Knew About Emissions Issues And When Did They Know It?

Did Herbert Diess, chief exec of Volkswagen, have knowledge of the diesel scam before it went public and resulted in the largest private criminal case in history? A story in Der Spiegel, an influential German newsmagazine, says yes.

New information, during the weekend, raises questions about when current VW Group CEO Hebert Diess may have known about emissions issues. The weekly newsmagazine, Der Spiegel asked the questions. The story also asks further questions about whether investors received the information promptly regarding the scope of the diesel emissions scandal that gripped the automaker for more than two years.

VW Denies Any Wrongdoing

Volkswagen’s senior management team, which has denied any wrongdoing, is under investigation by prosecutors in Brunswick, near VW’s Wolfsburg headquarters, for violations of financial disclosure rules. Der Spiegel’s report focused on recently unsealed documents from the prosecutor’s office in VW’s home state of Lower Saxony.

The Der Spiegel story indicates that Diess received information about the existence of emissions cheating software months before U.S regulators raised the issue. It created the Dieselgate emissions scandal. The scandal has cost the automaker more than $27 billion in penalties and fines.

And, it has resulted in the jailing of two VW engineers and a key manager in the U.S. And, the U.S has indicted at least six other current or former managers.

Although indicted, it is likely there will be no prosecution of the other six because no extradition treaty exists for these crimes. As long as they remain in Germany, where there is no extradition treaty for this type of crime, they are okay.

VW Denies Understanding Scope

Volkswagen said over the weekend that it had not violated its financial disclosure duties. Further, the automaker indicated there was no earlier notification because they didn’t grasp the scope of the fines and penalties.

According to documents unsealed by the prosecutor’s office, Diess was present July 27, 2015, at a meeting where senior engineers and managers discussed how to deal with U.S. regulators who were threatening a ban on VW due to excessive emissions. At that time, Diess was VW’s brands chief; a position he retained until he was named VW chief executive earlier this year. For those who may not know, VW owns Scania (trucks), Skoda, Audi, Porsche, Bentley, Bugatti, Lamborghini and Ducati, as well as the Volkswagen, brand.

At the time of the July meeting, the Environmental Protection Agency (EPA) was threatening to withhold certification of VW’s vehicles because the agency had found higher-than-normal pollution levels and wanted to know why.

Diess had formerly worked at BMW. He left BMW to become head of the VW brand on July 1, 2015. A meeting to discuss ways to determine a strategy that would free sales of VW cars on July 27, 2015. Diess joined the meeting which included former VW chief executive Martin Winterkorn. The meeting included CEO Martin Winterkorn. A document filed with the Brunswick court in February details this. Both Winterkorn and Diess declined to comment.

Asked About BMW Experience

After the meeting, Winterkorn asked Diess whether BMW had installed “defeat devices” in their cars. Diess replied that BMW never made use of such software, says Der Spiegel. Saturday, VW said, that the “contents of the discussion, where Martin Winterkorn and Herbert Diess were present, cannot be fully reconstructed, because the recollections of the people who were present partially deviate.” VW also said that it was the task of the authorities and courts to evaluate the different statements to assess whether individual witnesses were credible.

Sources: Reuters, Der Spiegel, research