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Abu Dhabi, UAEWednesday 12 December 2018

Ex-Volkswagen CEO Winterkorn charged in US over diesel scandal

Indictment was filed in secret in March and unsealed in the US on Thursday

The former chief executive of Volkswagen AG, Martin Winterkorn is charged in the US of conspiring to cover up the German automaker’s diesel emissions cheating. EPA/FELIPE TRUEBA
The former chief executive of Volkswagen AG, Martin Winterkorn is charged in the US of conspiring to cover up the German automaker’s diesel emissions cheating. EPA/FELIPE TRUEBA

The US Justice Department has disclosed the charges against former Volkswagen AG chief executive Martin Winterkorn, accusing him of conspiring to cover up the German car maker’s diesel emissions cheating.

Mr Winterkorn, 70, is charged with conspiracy to defraud the United States, wire fraud and violating the Clean Air Act from at least May 2006 until November 2015 after the company admitted using illicit software that allowed Volkswagen diesel vehicles to emit excess pollution without detection.

The indictment, filed in secret in March, was unsealed in district courts on Thursday as Volkswagen held its annual meeting in Germany. Mr Winterkorn resigned days after the scandal over polluting vehicles in the United States became public in September 2015.

US Attorney General Jeff Sessions, Environmental Protection Administration chief Scott Pruitt and other senior Trump administration official issued statements criticising VW with the indictment, which marks a rare instance of a CEO being subjected to criminal prosecution for corporate behaviour.

“If you try to deceive the United States, then you will pay a heavy price,” Mr Sessions said.

In contrast with Volkswagen, no individuals were charged at Toyota in connection with its sudden unintended acceleration scandal or at General Motors for the cover-up of a deadly ignition switch defect.

The federal government’s decisions not to prosecute senior financial industry executives in connection with the 2007-2009 financial crisis has also drawn fire from advocates of tougher measures to deter corporate wrongdoing.

The US indictment of Mr Winterkorn is likely to be largely symbolic. As a German citizen, he is almost certain not to travel to America and will probably seek protection under German extradition law. The former CEO is also under investigation by German authorities.

Volkswagen settled criminal charges with the US Justice Department in 2017 and agreed to a $4.3 billion payment. In total, VW has agreed to spend more than $25 billion in the United States to address claims from owners, environmental regulators, states and dealers.

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The company also has offered to buy back about 500,000 polluting vehicles. Many are now stored in car parks around the United States.

Volkswagen has been fighting to move past the emissions scandal, vowing to spend billions on a number of new electric vehicles as it has seen US sales rebound. The indictment reopens the question of whether other senior VW executives knew about the scandal, which threatens to prolong the crisis.

A lawyer for Mr Winterkorn in Germany did not immediately comment.

Mr Winterkorn disclosed in January 2017 he had not been informed of the cheating early and would have halted it had he been aware, but he did not say when he first became aware of the issue.

A Volkswagen spokesman in Germany said the company “continues to cooperate with investigations” of individuals but would not comment on Thursday’s charges.

Mr Sessions said in a statement that the charges against Mr Winterkorn showed that “Volkswagen’s scheme to cheat its legal requirements went all the way to the top of the company.”