Congress Takes Aim at Volkswagen Over Emissions Violations

Wednesday, October 7, 2015
Congress Takes Aim at Volkswagen Over Emissions Violations
The logo of German manufacturer Volkswagen is seen outside a dealership in Battersea, Sept. 25, 2015, in London.

The top U.S. official for Volkswagen will appear before a congressional panel this week and is expected to apologize for the company's emissions violations.

Michael Horn, Volkswagen Group of America's president and CEO, will answer questions Thursday from lawmakers about the automaker's software that cheated U.S. emissions tests.

"We have broken the trust of our customers, dealerships, and employees, as well as the public and regulators," Horn will say, according to his testimony. "We are determined to make things right."

Rep. Tim Murphy (R-PA), the chairman of the House Energy oversight subcommittee, said in a statement, "These are serious issues raised by reports that Volkswagen installed so-called 'defeat devices' in some of their diesel vehicles to circumvent decades old rules in place to protect public health. The American people want to know these devices were in place, how the decision was made to install them, and how they went undetected for so long. We will get them those answers."

Volkswagen's former CEO Martin Winterkorn resigned in late September as the scandal over Volkswagen's use of the defeat devices escalated.

Earlier this week, Matthias Mueller, Winterkorn's replacement, told a German newspaper the company will launch a recall of the vehicles that have been installed with the controversial diesel engine software in January. The goal is to fix all the vehicles by the end of 2016.

The beleaguered German automaker, accused by U.S. regulators of using an illegal "cheat device" to evade emissions regulations, has said as many as 11 million vehicles across several of its brands were sold to drivers with the diesel engine software in question.

So far, about three dozen class-action lawsuits have been filed against the manufacturer in the United States alone.

Representatives from the Environmental Protection Agency will also appear before the committee and plan to discuss the scope of Volkswagen's violations.

"Put simply, these cars contain software that turns off or significantly reduces the effectiveness of emissions controls while driving normally, and turns them on when the car is undergoing an emissions test," Chris Grundler, the director of the agency's office of transportation and air quality, will say tomorrow, according to his testimony.

The EPA is working with the Justice Department to investigate Volkswagen's violations and determine specific penalties for the German company.

But Volkswagen's dealings with Washington policymakers won't end with Thursday's hearing.

The Senate Finance Committee on Tuesday began investigating whether the company received tax subsidies for fuel-efficient vehicles under false pretenses.

The committee said some of the hundreds of thousands of Volkswagen vehicles sold in the U.S. that included defeat devices could have been purchased using the Alternative Motor Vehicle Credit, which was created for qualifying fuel-efficient vehicles. Four Volkswagen models were deemed eligible for the credit, which amounted to $1,300 per vehicle purchase.

Committee Chairman Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR) said they are looking into how Volkswagen received the credit for those cars when some of them may have included defeat devices.

"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 wrote in the letter.

The senators requested documents that could help answer questions including whether Volkswagen made false or misleading assertions to the U.S. government regarding the eligibility of its vehicles for fuel-efficient tax credits; which employees were responsible for submitting such certifications; and whether Volkswagen employees met with anyone at the Treasury Department, IRS or DOE regarding the certification.

Volkswagen was asked to respond to the request by Oct. 30.

"I'm concerned about whether the consumer has been defrauded and whether the company has gotten credits that it shouldn't have," Wyden told ABC.

Volkswagen did not immediately respond to a request for comment on the Senate investigation.

ABC's Daniel Steinberger contributed to this report.

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