US expands VW emissions scandal

Some of Volkswagen, Germany’s top executives may find it too risky to leave Germany as US prosecutors prepare to charge more company officials. Oliver Schmidt, a senior  VW executive, was arrested in Miami in early January as he was returning to Germany from vacation. He faces charges of misleading regulators about the automaker’s diesel-emissions cheating devices.

Bloomberg reports that US prosecutors are preparing to charge more high-level German-based executives in the case, a source familiar with the matter said. Schmidt’s arrest caught many VW executives by surprise, including some who were attending an auto show in Detroit early in January.

Lawyers for some senior executives in Germany have already warned their clients not to leave the country.  The arrest and the looming charges against senior executives show that the year-long investigation into the emissions cheating was coming to a head in the final days of the Obama administration.

Volkswagen's Oliver Schmidt

A multi-billion-dollar settlement between the carmaker and the US Justice Department was expected soon, insiders said.

VW admitted last year that about 11 million diesel cars worldwide had been fitted with so-called defeat devices – embedded algorithms used to “doctor” emissions tests.

Schmidt, 48, who was VW’s liaison person with US environmental regulators, appeared in a federal court in Miami, where a judge ordered him to be held in custody as a flight risk. His lawyer sought Schmidt’s release, saying his client had alerted the government that he was visiting and was willing to speak with investigators and face charges.

Comment from the Daily Bell, a libertarian website:

“Were VW officials dishonest and manipulative? Possibly so. Did anyone get badly harmed by their emissions ‘cheating’? Any hard evidence of that? Probably not.

“This is a witch hunt seemingly of greater urgency than catching paedophile priests. Why? Because VW has money. White collar crime does pay – for the government, in the fines that they manage to extract from the perpetrators.”

What do Noseweek readers think? Let the VW men off with a modest fine, or lock them up in prison? Let us know your views.

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