U.S. grand jury indicts four Audi managers in VW emissions probe

WASHINGTON (Reuters) – A federal grand jury in Detroit on Thursday indicted four managers at Volkswagen AG’s (VOWG_p.DE) luxury Audi unit as part of the U.S. government’s investigation into the German automaker’s diesel emissions cheating scandal, according to court documents.

VW admitted in September 2015 to secretly installing software in nearly 500,000 U.S. vehicles to cheat government exhaust emissions tests and pleaded guilty in 2017 to felony charges. In total, 13 people have been charged in the United States, including the four Audi managers.

Managers Richard Bauder, Axel Eiser, Stefan Knirsch and Carsten Nagel all worked in Audi’s engine development division in Germany. Bauder was head of Audi’s Diesel Engine Development department. A Justice Department spokesman said none are in custody. All are believed to be in Germany.

Lawyers for the four could not immediately be identified.

The government previously indicted one former Audi manager in July 2017, Giovanni Pamio. The new indictment is a significant expansion of the government’s criminal probe.

The four managers are charged in a 12-count indictment with conspiring to evade U.S. emissions standards in diesel vehicles sold in the United States with 3.0-liter engines. The vehicles include the 2009-2015 Audi Q7 vehicles as well as other Q5, A6, A7 and A8 diesel models and VW Touareg vehicles. They are accused of wire fraud, violating the Clean Air Act and conspiracy.

Volkswagen spokesman Pietro Zollino said the company continues “to cooperate with investigations by the Department of Justice into the conduct of individuals. It would not be appropriate to comment on individual cases.”

The indictment said the Audi managers realized they could not meet U.S. pollution standards given design constraints by Audi “including the need for a large trunk and high-end sound system.”

Audi engineers told Bauder in 2008 that unless the tank was larger “Audi had to cheat to pass U.S. emissions tests” and ensure that drivers could go 10,000 miles between dealer service visits, the indictment said.

In total, Volkswagen has agreed to pay more than $25 billion in the United States for claims from owners, environmental regulators, states and dealers, and has offered to buy back about 500,000 polluting U.S. vehicles. The buybacks will continue through 2019.

In 2017, VW also pleaded guilty to fraud, obstruction of justice and falsifying statements in a U.S. court. Under the plea deal, the automaker agreed to sweeping reforms, new audits and oversight by an independent monitor for three years.

U.S. prosecutors previously charged former VW Chief Executive Officer Martin Winterkorn, who remains in Germany. Two other former VW executives have pleaded guilty in the investigation and are in prison. Germany does not typically extradite its citizens for prosecution in U.S. courts.

Former Audi Chief Executive Rupert Stadler was not among those indicted. He is being investigated in Germany for his alleged role.

VW in October terminated Stadler’s contract against the backdrop of a criminal investigation into whether he was involved in emissions cheating.

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VW could face recall of more cars over emissions: report

BERLIN (Reuters) – Germany’s Federal Motor Transport Authority (KBA) is considering recalling more Volkswagen (VOWG_p.DE) cars due to its emissions, scandal, the Bild am Sonntag newspaper reported on Sunday.

The KBA has opened an investigation into whether a software update for 1.2-litre engine cars, including the popular Polo, enabled them to cheat emissions tests, the newspaper said, without naming its sources.

The Bild am Sonntag said prosecutors were preparing charges against unnamed Volkswagen managers for suspected fraud, noting that the company had given assurances in 2016 that the 1.2 liter engines did not use illegal emissions cheating defeat devices.

VW has had to recall hundreds of thousands of cars around the world since it admitted in Sept. 2015 to installing illegal software in diesel engines to cheat strict U.S. anti-pollution tests.

The KBA was considering forcing 30,000 affected cars in Germany off the road, although it was more likely just to order further remedial work, the newspaper said. There are 370,000 of the models under investigation in Europe in total.

Germany’s Transport Ministry, which oversees the KBA, said it was aware of the allegations, but noted that the KBA’s investigation was not yet concluded.

A Volkswagen spokesman said internal quality controls for diesel cars with 1.2 liter engines, model EA189, had revealed irregularities which were now being analyzed.

He said Volkswagen had informed the authorities and the company was in continuous dialogue with them.

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Volkswagen denies allegations chairman knew early about emissions cheating: report

FRANKFURT (Reuters) – Volkswagen (VOWG_p.DE) has denied allegations that Chairman Hans Dieter Poetsch knew about the carmaker’s emissions test cheating almost three months before U.S. authorities made it public in September 2015.

Citing internal documents from investigators, German weekly Bild am Sonntag reported that Poetsch, VW’s finance head at the time, learned about the carmaker’s violations of the rules in late June 2015.

The paper cites a confidential presentation from the VW legal department, available to investigators in proceedings about the carmaker’s alleged market manipulation.

According to the report, a presentation dubbed “Sacramento” and dated June 24, 2015, stated that U.S. emissions rules were being violated and that the company may also have breached its supervisory obligations.

The paper also reported that, according to testimony from a leading VW lawyer, referred to as “witness P.”, Poetsch received the presentation on June 29, 2015. He was also informed then that 600,000 vehicles in the U.S. were affected and that the financial risk for VW stood at 35 billion euros ($39.8 billion).

Volkswagen said in a statement on Sunday that it had been aware of the allegations for some time.

“The presentation by the witness P. is emphatically rejected as inaccurate.”

The diesel issue was the subject of a number of discussions with Poetsch in the summer of 2015, Volkswagen said.

“However, none of these discussions had the content and quality which could have made capital markets law relevant for Mr. Poetsch.”

Volkswagen added that until the publication of the Notice of Violation by the U.S. authorities on September 18, 2015 it did not have sufficiently concrete indication of a situation that could be share price sensitive.

Poetsch became VW chairman shortly after the “Dieselgate” scandal broke in 2015.

Plaintiffs in a market manipulation lawsuit in Germany say Volkswagen failed in its duty to inform investors about the potential financial implications of the emissions test cheating, which has so far cost the company 27.4 billion euros in penalties and fines.

The company has argued it did not inform investors of the issue because it did not want to endanger the chance of reaching a settlement with the U.S. authorities.

($1 = 0.8790 euros)

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Bush Funeral, Emissions, Facebook: Your Wednesday Evening Briefing

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Good evening. Here’s the latest.

1. Five living presidents, plus family, friends and dignitaries from around the world, gathered in Washington National Cathedral, above, for a memorial service to honor George Bush, the 41st president.

In a eulogy for his father, former President George W. Bush remembered him as an imperfect, but beloved man who bestowed wisdom. “To us, his was the brightest of 1,000 points of light,” Mr. Bush said, invoking a phrase the elder Mr. Bush used.

A generation of Cold War-era leaders has now receded. Only Mikhail Gorbachev, the Soviet Union’s last leader, is alive — and he was too ill to attend the funeral. With those leaders, our White House correspondent writes, the world order they helped build is also fading.

In addition to winding down the Cold War, the elder Mr. Bush is credited by historians with helping in the reunification of Germany and Europe and the peaceful dissolution of the Soviet Union, and laying the groundwork for the World Trade Organization.

But critics argue that he didn’t do enough to address the AIDS epidemic raging during his time in office.


2. Facebook gave special access to users’ data to favored companies like Airbnb, Lyft and Netflix, emails and other internal Facebook documents show.

The documents, released by a British parliamentary committee investigating the company, shine a light on Facebook’s internal workings from roughly 2012 to 2015, as it determined how to manage the mountains of data it was accumulating on users. Above, Facebook headquarters in Menlo Park, Calif.

In a statement, Facebook said the documents were part of a “baseless” lawsuit and “only part of the story.”

In Opinion: A historian of Silicon Valley argues that the end of privacy began in the 1960s, when Congress made choices that allowed tech giants to become as powerful as they are.


3. Emissions are rising faster.

Worldwide carbon emissions are expected to rise by 2.7 percent this year, according to studies in three scientific journals. Emissions rose by 1.6 percent last year.

The spike was driven primarily by stronger demand for natural gas and oil, which surprised the researchers. “We thought oil use had peaked in the U.S. and Europe 15 years ago,” one said. Above, fracking near Epping, N.D.

The world’s largest polluters are still China, India and the U.S., which together produce almost half of the world’s carbon emissions. And U.S. emissions are expected to rise this year after several decades of declines.


4. Republican lawmakers in Wisconsin pushed through bills that strip power from the state’s incoming governor, a Democrat.

The legislation, which was the subject of protests and vehement opposition by Democrats, passed early this morning after hours of closed-door meetings. Now it awaits the outgoing governor’s signature. Above, tallying the final votes at the capitol in Madison, Wis.

The bills limit early voting and give lawmakers — not the governor — the majority of appointments on an economic development board. They also shift more authority to lawmakers that would ordinarily be held by the state attorney general, another position about to be filled by a Democrat.


5. Michael Flynn, President Trump’s former national security adviser, helped substantially with the special counsel’s investigation into Russian election interference and should receive little to no prison time, prosecutors said on Tuesday.

Mr. Flynn was the first person from Mr. Trump’s inner circle to strike a deal with Robert Mueller, the special counsel. He pleaded guilty a year ago to lying to the F.B.I. about conversations he had with the Russian ambassador to the U.S.


6. Les Moonves, the former chief executive of CBS, destroyed evidence and misled investigators in an attempt to save his severance deal, according to a draft of a report prepared for the company’s board.

The report, by lawyers hired by the network, said CBS would be justified in denying $120 million in severance to Mr. Moonves, who was forced to step down in September.

Among the revelations: Multiple people told the outside lawyers that CBS had an employee “who was ‘on call’ to perform oral sex” on Mr. Moonves. Above, CBS headquarters in Manhattan.

The report, our business columnist writes, shows that senior executives and even board members were aware of Mr. Moonves’s alleged misconduct — and did nothing to stop him. The repercussions for that failure in corporate governance are likely to reverberate at CBS for years.


7. Eritrea is one of the world’s most closely controlled nations, where citizens aren’t allowed to leave and foreign journalists are rarely allowed in.

But now, after the end of a 20-year war with its neighbor Ethiopia, the country is slowly opening up. Above, family members reuniting.

Our reporter, whose father was born in the reclusive nation, shares the signs she found of new beginnings in photographs, video and words.


8. “You just go until you reach your own finish line.”

Ridiculously long races are growing in popularity, and female runners appear able to hold their own with men. At longer distances, experts say, the biological advantages that men have grow smaller.

Courtney Dauwalter, above, a 33-year-old with a reputation for outrunning men and shattering course records, will try to break the women’s world record for the most miles run in 24 hours this weekend, at a competition in Phoenix. She will have to run more than 161.55 miles to do so.

She already holds the American women’s record: 159.32 miles.


9. Coming soon: “Clueless, The Musical.”

Amy Heckerling, the writer and director behind the hit 1994 comedy, always thought the film should be a musical. “Two people falling in love,” she said, “well, they got to sing.”

For years, an adaptation of the movie, which was based in part on Jane Austen’s “Emma,” was considered too expensive. But Ms. Heckerling never stopped trying, and now it’s in previews Off Broadway, opening next week.

As a female director, Ms. Heckerling, above, was a woman who was somehow able to join a fraternity and thrive in it. She directed touchstone ’80s comedies like “Fast Times at Ridgemont High” and “Look Who’s Talking.” Our writer takes a look at her career and examines the ways she — like her masterpiece’s main character, Cher — has grown.


10. Finally, what’s the best movie you’ve seen this year?

Our two chief film critics share their picks, with links to reviews. One singles out “Roma,” above, a Mexican remembrance of things past; the other has a four-way tie for first place.

Separately, our chief classical music critic shares his favorite performances, accompanied by a Spotify playlist of best surprises.

Have an outstanding evening.

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Volkswagen says last generation of combustion engines to be launched in 2026

WOLFSBURG, Germany (Reuters) – Volkswagen’s (VOWG_p.DE) strategy chief said on Tuesday the German carmaker’s core brand will develop its final generation of vehicles using combustion engine technology in 2026.

Volkswagen made a strategy shift toward battery-driven vehicles in the wake of a damaging diesel-emissions cheating scandal in 2015, which forced the carmaker to pay more than 27 billion euros in fines for hiding excessive pollution.

“In the year 2026 will be the last product start on a combustion engine platform,” Michael Jost told the Handelsblatt automotive summit conference at Volkswagen’s headquarters in Wolfsburg, Germany.

A spokesman confirmed Jost’s remarks meant that VW, Europe and China’s best selling passenger car brand, will focus on electric cars instead.

VW will continue to adapt its petrol and diesel engined cars to meet environmental standards during the lifetime of those vehicles, but the German carmaker is now committed to radical steps to stop global warming, Jost said.

As a way to meet the goals of the Paris climate accord, Volkswagen has changed its car development benchmarks to include the target of radically cutting levels of carbon dioxide pollution in production as well, Jost said.

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