The Senate Finance Committee will open its own investigation into Volkswagen to examine whether the company cost the federal government millions of dollars by cheating on emissions to achieve fuel efficiency, which helped those vehicles qualify for tax credits.
Using diesel fuel allowed the vehicles to achieve higher gas mileage and lower carbon dioxide emissions. However, burning diesel fuel means more nitrogen oxide emissions. Volkswagen used a software cheat to help its cars get around those nitrogen oxide emissions tests, allowing the company sell cars that let buyers benefit from tax credits.
In a letter sent to Volkswagen Tuesday, Chairman Orrin Hatch, R-Utah, and Sen. Ron Wyden, D-Ore., wrote that Volkswagen certified in 2009 that Jetta TDI Sedan and SportWagen vehicles qualified for the Alternative Motor Vehicle Tax Credit, which let buyers qualify for $1,300 in tax credits.
“This activity raises questions of whether Volkswagen made false representations to the U.S. government in its certification for federal tax subsidies,” Hatch and Wyden said in a joint statement.
The Jetta models were among the vehicles that were identified as having “defeat devices,” or 100 million lines of software code, that allowed the vehicles to cheat emissions tests. The software could detect when it was tested and reduce emissions, but when it was driving under normal conditions the “clean diesel” vehicles would emit up to 40 times more nitrogen oxide than legally allowed.
“The vehicles in which Volkswagen installed ‘defeat devices’ included those that the company certified as qualifying for the advanced lean-burn technology motor vehicle credit,” the letter states.
“While investigations are ongoing, the Volkswagen Supervisory Board has confirmed that the company installed ‘defeat devices’ on as many as 11 million vehicles marketed as model years 2009 through 2015,” it added. “This activity raises questions of whether Volkswagen made false representations to the U.S. government in its certification for federal tax subsidies.”
The letter asks for all certifications and quarterly reports about whether the Jetta qualified for the tax credits, as well as the names of employees who were responsible for submitting the certifications for the credits to the government.
Hatch and Wyden also want to know if VW made false or misleading statements to the U.S. government, the dates of meetings between VW and the Department of Treasury, all documents related to VW applying for the tax credits and other communications between top VW employees about the tax credits.
Last month, the EPA announced it was investigating Volkswagen for using the defeat devices.
It’s been a catastrophic few weeks for VW since the announcement, with its stock price plummeting and the resignation of the company’s CEO, Martin Winterkorn, coming in the week following the scandal.
The scam may affect up to 482,000 vehicles in the United States alone and about 11 million vehicles worldwide. The EPA may be able to levy a fine of $18 billion against the company for the violations in the United States.
No recall has been issued to bring the VW models affected by the scheme into compliance, which the committee plans to ask about at Thursday’s hearing.
Volkswagen’s scandal is already under congressional investigation. On Thursday, Volkswagen’s chief in the United States, Michael Horn, is set to testify in front of the House Committee on Energy and Commerce.
