Open Letter to Attorney General Lynch: Prosecution or Guilty Pleas for Corporate Crime
By Ralph Nader
January 10, 2017
Dear Attorney General Loretta Lynch:
News outlets are reporting that you are about to settle the criminal case with Takata airbag defect case for nearly $1 billion and the Volkswagen emissions cheating case for nearly $2 billion.
On the VW case, the New York Times reported that “the company or one of its corporate entities is expected to plead guilty to criminal charges as part of the deal.”
On the Takata case, the New York Times reported that “one point that remains unresolved is whether there will be any guilty plea to criminal misconduct, either by the company or one of its subsidiaries.”
Takata’s defective airbags have been linked to at least 11 deaths and more than 180 injuries in the United States.
As you know, Clarence Ditlow, an engineer and lawyer who headed the Center for Auto Safety for many decades, passed away last year.
In early 2016, Mr. Ditlow appeared on my weekly radio program – The Ralph Nader Radio Hour – and called for criminal charges to be brought against Takata and VW and its executives.
Ditlow called the Volkswagen diesel case one of the most egregious corporate crime cases in history.
“This is one of the most egregious corporate crimes I have ever seen,” Mr. Ditlow said. “When the Environmental Protection Agency set tough new standards for diesel engines, Volkswagen quickly discovered that its technology wouldn’t meet the new standards. But, what they did is, instead of sending their engineers to work, designing a new system to clean up the diesel, they sent their engineers to work developing a computer program that would instruct the diesel engine to only work the emission controls during the test procedure. And, when the diesel is out in the real world on the highway, to turn off the emission controls. So, in order to do this you have to have engineers who deliberately programmed into the computer system a cheat device, which would turn off the emission controls. Clear knowledge. Clear intent. And they got caught.”
Ditlow said that “in the U.S. there are nearly 500,000 of these diesels with the cheat devices on them.”
“Across the world there are many millions, as many as 11 million vehicles in every country, polluting the atmosphere, causing adverse health effects. And, one study here in the U.S. said that there be as many as 60 deaths due to this corporate crime by Volkswagen.”
“I mean, we’re not talking about a petty crime here. What we’re talking about is a gross corporate crime. These diesels emit up to 40 times the amount of emissions that they are allowed to. And, it’s very fine particulates that are coming out of the diesel. It’s nitrogen oxides. And, it’s going into the lungs of individuals, and if you’re particularly sensitive you are quite likely to suffer disease and illness and ultimately death.”
“The government in the U.S. the governments throughout Europe and the rest of the world … send the responsible executives to jail,” Ditlow said. “This is not something that a rogue engineer did. This is something that management approved, because, you cannot sell a car unless you get it certified by EPA. And, top management always looks at that. Because, if it can’t sell the car, you’re not going to make money. And, the way they made money this time was they cheated.”
On Takata, Mr. Ditlow said this: “Up through the year 2000, almost every airbag inflator made worldwide, including by Takata, used sodium azide as a propellant. Very stable. If it broke down it just simply degraded and there were no adverse effects. If you had to replace it, you had to replace it. But, what Takata did in the beginning of 2001 was to change the propellant to ammonium nitrate, an incredibly powerful explosive. It’s what Terry McVeigh used to bring down the government office building in Oklahoma City. It’s what a lot of terrorists in the Mideast are using in the improvised explosive devises. And so, yet this propellant that Takata used, it was known to degrade, known to explode, they put it into the airbag inflator to save, once again, a few pennies per inflator. And so, they knew immediately, once these inflators were put into production that they were failing, they were exploding, and when they exploded they sent the shrapnel of the housing into the occupant compartment. And, if you’re behind the steering wheel and you had no other choice at that time, you are very likely to be killed or seriously injured.”
To bring justice to the victims of the Takata and VW criminal actions, I ask that you not just fine the companies and agree to deferred prosecution agreements, or a guilty plea against some subsidiary of the company – but bring the full weight of the criminal law – against both the parent company and responsible executives.
The recent trend of settling major corporate crime cases with deferred or non prosecution agreements has undermined the criminal justice system and sent a message that we live in a society with a two tier system of justice – deferred and non prosecutions for the powerful, guilty pleas and jail for the powerless.
Whoever it was that leaked to the New York Times that “one point that remains unresolved [in the Takata case] is whether there will be any guilty plea to criminal misconduct, either by the company or one of its subsidiaries” was testing the public’s sentiment on this issue.
Whatever your next stop in the legal field – be it corporate law firm, Wall Street, academia, or public interest group – rest assured your judgment in these cases will go a long way to help define your legal legacy as Attorney General.