Coming on the heels of the GM settlement for defective ignition switches where there were no prosecutions of individuals, the VW scandal will be a test for the Department of Justice and its new policy announced a few days ago with the Yates Memo.
The DOJ said it will now go after individuals involved in corporate malfeasance which results in criminal actions.
Indeed Point Number 1 in the Yates Memo was titled, “To be eligible for any cooperation credit, corporations must provide to the Department all relevant facts about the individuals involved in corporate misconduct.” The emphasis of the word ‘any’ was in the original Memo.
Today the CEO of VW, Martin Winterkorn, resigned his position from the company. His resignation came after meetings on Monday and Tuesday by the Presidum, which is the corporate governing body of VW.
As reported in the New York Times, the Presidium said in a prepared statement: “In the view of the presidium, irregularities occurred which could be relevant under criminal law.” The statement went on to note “Volkswagen would cooperate fully with any investigation.”
The statement also said “The members of the presidium have determined that Prof. Dr. Winterkorn had no knowledge of manipulation of emission values.”
Obviously this raises the question of why Mr. Winterkorn needed to resign if he had not known about the manipulation. One answer might be that Volkswagen has long been known as a top-down organization, where even relatively minor decisions require approval from the high-rise executive office building, topped by a giant VW grill ornament, which looms over the company’s vast main factory in Wolfsburg, Germany.
Mike Scher’s post on VW’s compliance screw up discussed environmental compliance in the context of this VW matter. Whether it is environmental compliance or good, old-fashioned don’t lie to the government and consumers compliance, it will be very interesting to see if the DOJ goes after VW senior management.
Perhaps the more interesting query will be whether VW turns over information on culpable senior management.
While the Presidium seems to have already determined that the former CEO had no knowledge of the fraud and deception, the Times article noted, “Volkswagen’s command-and-control structure probably made it difficult for Mr. Winterkorn to escape responsibility.”
________
Thomas Fox is a contributing editor of the FCPA Blog and a Compliance Week columnist. He’s the founder of the Houston-based boutique law firm tomfoxlaw.com. A popular speaker on compliance and risk-management topics, Fox is also the creator and writer of the widely followed FCPA Compliance Report. His book Lessons Learned on Compliance and Ethics topped Amazon’s bestseller list for international law. He can be contacted here.
Comments are closed for this article!