VW Bosses Told Full Emissions Costs Months Before Coming Clean: Report

Throughout the entirety of Volkswagen’s diesel emission scandal, the automaker has changed its tune on several occasions. After evading scrutiny from regulators for years, it finally admitted to installing illegal defeat devices designed to fool U.S. emission testing in late 2015. However, it assured the public that no high-ranking executive had complete knowledge of the misdeed until news of the scandal broke to outraged consumers.

Obviously, that was a lie. But no damning evidence came out indicating anyone above mid-level management had prior knowledge of the devices or any idea they would be so harmful to the company. But now a Volkswagen manager arrested earlier this year claims the automaker’s former chief executive and other top managers had been told the carmaker’s diesel emissions violations could cost up to $18.5 billion, well before the September 2015 announcement.

German newspaper Bild am Sonntag is reporting Oliver Schmidt, a VW executive arrested in Miami in January, informed ex-CEO Martin Winterkorn about the financial implications of the defeat devices on August 25, 2015. The newspaper said Schmidt told Winterkorn about the maximum possible penalty during an emergency meeting that also included Heinz-Jakob Neusser, VW’s then development chief, and Herbert Diess, VW’s current brand chief.

Citing documents relating to the continued U.S. investigation of Volkswagen, Bild am Sonntag also reported Winterkorn and Diess were informed VW had been using defeat devices at a meeting on July 27, 2015.

Germany will be keen to use this information in its own ongoing investigations into VW’s upper management. The country’s securities law mandates all firms publish any market-sensitive news swiftly and accurately. However, VW’s annual report for 2016 indicated its board members had been informed the costs associated with emissions scandal would be “controllable overall with a view to the business activities of Volkswagen Group.”

In Germany, the Stuttgart prosecutor’s office has been conducting a sweeping investigation into employees working Porsche, Audi, and Volkswagen. The probe now includes numerous members of Volkswagen Group’s top brass. Since Germany doesn’t extradite its citizens, the majority will be safe from U.S. prosecutors. That leaves local authorities to do much of the heavy lifting.

Last week, German prosecutors arrested Giovanni Pamio, an Audi employee and Italian national, on suspicion of fraud and false advertising. Pamio, who remains in custody, is also being sought by the U.S. Justice Department for his alleged role directing employees to design software allowing Audi vehicles to cheat U.S. emissions tests. His remains the only arrest outside of the United States.

[Image: Volkswagen]