VW-Gate: 'Long
Arm of U.S. Justice' Strikes Again (Der Spiegel, Germany)
"Banks,
swindlers, FIFA officials: International transgressors get what they have
coming from U.S. investigators. … And
now it's Volkswagen - that symbol of German engineering precision. But, of all things, for environmental fraud? … From a
country that isn't exactly known as a raging climate protector? Therein lays a
bitter irony. The U.S. justice system has long left perpetrators of economic
crimes largely undisturbed - most notably the masterminds behind the financial
crisis. … Bad luck for VW: Attorney General Loretta Lynch, in office only since
April, is taking a harder line. According to an internal memo, she wants economic
crime investigators to focus more on individual responsibility. VW is to be the
first example."
New York: Banks,
swindlers, FIFA officials – and now Volkswagen: International transgressors get
what they have coming from U.S. investigators. Now they have proven the undoing
of VW Group's also-climate conscious CEO.
Great timing: Gina McCarthy had for some time planned to
attend the press
breakfast with The Wall Street Journal.
Along with senior White House economic policy advisor Brian Deese,
the head of the U.S. Environmental Protection Agency wanted to have a little
chat about the Clean
Power Plan, America's new, more stringent climate measure.
That
worked out well. During Tuesday's panel discussion, McCarthy, to illustrate the
effectiveness of the provisions which were introduced in August, was able to point
to a climate change delinquent the EPA was closing in on: Germany's Volkswagen
Group.
"This was particularly difficult for us to detect,"
she said, referring to the software VW used to manipulate the U.S. emissions
tests for its "clean" Diesel models."I'm really proud of the work that we did."
This effect of this is now snowballing. It is emerging that
the VW scandal was probably only the beginning: "We are not going to sit
around," McCarthy threatened. If other auto manufacturers, regardless of
their country of origin, are cheating in a similar fashion, "we're going
to find it."
The U.S. as global
dispenser of justice
Once again the United States is proving a very tough
dispenser of justice against global fraudsters. This has been the case many times
before: British currency swindlers, Russian money launderers or questionable
FIFA officials – all had or are getting into trouble with the United States.
Nor has the auto industry been spared: In 2014, the U.S. Justice Department
saddled Japan's Toyota Corporation with a $1.2 billion fine for a deadly
scandal involving stuck gas pedal.
And now it's Volkswagen - that symbol of German engineering precision.
But, of all things, for environmental fraud? … From a
country that isn't exactly known as a raging climate protector? Therein lays a
bitter irony.
The people of Wolfsburg were unlucky. With their emissions
trickery they were caught in a perfect storm – a rare combination of adverse
circumstances, at least from VW's point of view. An ambitious EPA, a reinvigorated
Justice Department, private environmental activists and a climate-conscious
U.S. president who has nothing to lose: All of this aggravated the situation
for VW.
This starts with the fact that America, despite its lousy
eco-image, has tougher environmental standards than most other states. In particular,
the EPA's emissions tests are more stringent than, for example, Europe.
Without impetus from private sources, the EPA would never
have ferreted out VW's cheating. The
International Council on Clean Transportation (ICCT),
a German-American climate protection organization, had noted discrepancies in VW
emissions tests last year - and alerted the California Air Resources Board
and the U.S. EPA.
Posted By Worldmeets.US
For the EPA it was perfect timing: When EPA chief McCarthy
took office in mid 2013, she became the face of President Obama's climate change
ambitions: freed from political constraints, Obama hopes to go down in history.
And McCarthy needed good news: In August, the EPA made
headlines when it accidentally
contaminated an entire river with more than eleven million liters of toxic liquids.
A change in topic, which put the agency in a positive light, was a welcomed one.
To fight polluters on the road, the EPA has powerful means
at its disposal: Under the Clean Air
Act, America's climate law, the agency has the authority to impose million-dollar
civil penalties. Meanwhile, U.S. emissions standards were just tightened in
August.
It seems that the word 'Watergate' and the scandal it references never go out of style. There are a number of events...
"They take the responsibilities that they have to
enforce the Clean Air Act very seriously," Obama spokesman Josh
Earnest said regarding the EPA's roll in the VW scandal. He said that
enforcing the environmental laws was an "economic priority."
Volkswagen as an
example
Another weapon against corporations trying to dodge U.S.
regulations is the Department of Justice. According to The Wall Street Journal, the department's environmental division
has initiated a separate criminal investigation in the VW case.
Even here that is no coincidence. The U.S. justice system
has long left perpetrators of economic crimes largely undisturbed - most
notably the masterminds behind the financial crisis. Banks were permitted to
get off by paying manageable fines, while CEOs in the worst case scenario ended
up with fat severance and retirement payoffs.
Bad luck for VW: Attorney General Loretta Lynch, in office only
since April, is taking a harder line. According to an internal memo, she wants economic
crime investigators to focus more on "individual responsibility." VW
is to be the first example.
On Tuesday, New York Attorney General Eric Schneiderman announced that several U.S. states want to
form an alliance to initiate investigations against the German carmaker.
In addition, Congress is getting involved. Two subcommittees
have already announced hearings to interrogate senior managers at VW in a
manner similar to American companies and banks.
Other companies should also be concerned – around the world.
McCarthy promised during her appearance on Tuesday that the EPA will be "upping
our game" in the fight against auto industry polluters.
That
worked out well. During Tuesday's panel discussion, McCarthy, to illustrate the
effectiveness of the provisions which were introduced in August, was able to point
to a climate change delinquent the EPA was closing in on: Germany's Volkswagen
Group.
