A top Volkswagen official knew the automaker was cheating on its emissions tests more than a year ago, according to documents released Wednesday.
Michael Horn, the company’s U.S. chief, knew about the scheme as early as spring 2014 and revealed it to the Environmental Protection Agency on Sept. 3, the documents say. The EPA made its investigation into VW’s “defeat devices” public on Sept. 18. Horn is scheduled to testify in front of the House Energy and Commerce Committee about the scandal.
“I was informed that EPA regulations included various penalties for non-compliance with the emissions standards and that the agencies can conduct engineering tests which could include ‘defeat device’ testing or analysis,” Horn will say, according to prepared testimony.
Volkswagen told the EPA about the “defeat device” on Sept. 3, more than two weeks before the EPA announced its investigation.
Horn said the company takes full responsibility for the scandal and pledges to work cooperatively with investigators.
“I did not think that something like this was possible at the Volkswagen Group,” he will tell the committee. “We have broken the trust of our customers, dealerships and employees, as well as the public and regulators.”
The EPA is working with the Department of Justice to figure out how much Volkswagen benefited from the emissions test cheat installed on millions of cars worldwide.
The “defeat devices” are more than 100 million lines of software code in some of Volkswagen’s most popular “clean diesel” vehicles. Those devices allowed popular models, such as the Jetta, to tell when they were undergoing emissions testing.
The software could tell if a test was taking place based on the position of the vehicle’s steering wheel, the speed the vehicle was traveling, how long the engine was being used and barometric pressure, according to the EPA.
The vehicles would reduce emissions of nitrogen oxide during testing and then spew 40 times the legal limit during normal use.
In prepared testimony released in advance of the hearing, Chris Grundler, director of EPA’s Office of Transportation and Air Quality, said the agency is working closely with Justice investigators.
“Determinations regarding potential penalties and other remedies will be assessed as part of the investigation,” Grundler will tell committee members.
Also under investigation is just how much Volkswagen stood to benefit by cheating on these tests.
The Senate Finance Committee is investigating if the company fraudulently applied for a program that allowed customers to receive tax credits to buy fuel-efficient vehicles. Diesel-burning vehicles, popular in Europe, typically get higher gas mileage than gasoline-burning vehicles, but the nitrogen oxide emissions are often not low enough to meet EPA standards.
Senators charge that Volkswagen lied to consumers and the government about the environmental friendliness of its vehicles.
Consumers who bought two models of the Jetta in 2009 qualified for tax credits that could have cost the United States as much as $50 million, according to a letter sent to Volkswagen. Those sales may have brought VW profits for vehicles that otherwise would have been illegal
Those possible profits, and the costs of pollution, are also under the EPA’s microscope.
“We intend to assess the economic benefit to VW of noncompliance and pursue appropriate penalties,” Grundler will say Thursday, “as well as assess the excess pollution from VW’s violations and appropriate ways to mitigate that harm.”
Horn can expect to be grilled about the extent of the scheme to get around emissions tests, according to committee documents.
EPA officials believe as many as 482,000 vehicles in the United States are programmed with the defeat devices. The agency can level a $37,000 fine for each vehicle programmed to avoid emissions tests, so the company can face a maximum fine of about $18 billion.
The company estimates about 9.5 million vehicles around the world contain the defeat device.
The scandal has been a catastrophe for the German automaker. Its stock price has plummeted, top executives have been forced to resign and the company’s reputation has taken a major blow.
VW officials in Germany have announced that a recall will begin in 2016, but a U.S. spokeswoman said the company is still working with the EPA and California Air Regulation Board to determine the timeline for a potential U.S. recall.
At this point, the “clean diesel” vehicles are safe to drive and are not being recalled in the United States.
