Inside Volkswagen’s Extensive Effort to Lie to Regulators, American Public

When news broke of Volkswagen’s widespread use of illegal ‘defeat devices’ on its diesel vehicles back in 2015, the company sought to pin the blame on so-called ‘rogue engineers.’ This response was never remotely credible, particularly at a rigid, hierarchical company like VW, but new evidence has shed light on exactly how deep the corruption went. Most of the reporting on the story has focused on VW’s decision to adopt defeat devices in 2006, but the story of how the company brazenly lied to the California Air Resources Board and the Environmental Protection Agency is a critical component of understanding why VW was punished so harshly for engaging in behavior that other auto companies essentially got away with.

According to a book excerpt published by The New York Times, Volkswagen didn’t just ship illegal defeat devices to the United States — it also ran a deliberate campaign of misinformation against the researchers who identified problems with its vehicles and the regulators who were called in to troubleshoot the problem. Far from bringing the hammer down on a foreign auto manufacturer, CARB bent over backwards to work with VW. The regulators held a number of multi-hour (and sometimes all-day) meetings with the company in an attempt to understand why the company’s TDI diesels served up one set of results when tested in the lab and a completely different set of data when tested on the road.

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One of the test rigs that caught VW’s cheating

In exchange for its good-faith efforts to find a solution, what CARB got was foot-dragging, outright dismissal, and attacks on the credibility of their own data. Even as it engaged in this world-class gaslighting (pun intended), Volkswagen was internally discussing whether or not it should be honest with regulators about the actual problem, as well as the pros and cons of various degrees of lying.

Volkswagen ups the ante

In October 2014, VW informed CARB that it would issue updated engine software for VW diesels starting with the 2009 model year. The software was said to incorporate the latest engineering data to increase overall engine efficiency and (according to Volkswagen) reduce pollution. In return, CARB and the EPA agreed to allow VW’s 2015 diesels to go on sale. But while Volkswagen’s software did somewhat reduce pollution levels in its TDI-equipped vehicles, it didn’t remove the defeat device software already installed. Instead, the 2015 update actually enhanced the vehicle’s ability to determine if it was being tested and to alter its pollution levels accordingly.

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TDI was widely marketed as “clean” diesel, despite VW’s knowledge that such claims were garbage.

Volkswagen has claimed that its former CEO, Martin Winterkorn, wasn’t fully apprised of the problem until September 2015 when the issue went public. Court documents indicate that he received a memo identifying the issue in May 2014 (his lawyers claim he didn’t read it) and was briefed on the issue by multiple engineers on July 27, 2015 (his lawyers claim he didn’t understand the problem and wasn’t aware that his company was in violation of US law). The company contracted with US law firms to advise it on its options, and was told that previous companies caught in similar circumstances had faced fines of $ 100 million or less. Of course, none of the companies previously found to be cheating on emissions tests had continued to ship deliberately broken vehicles into the US while lying to regulators about the reasons why discrepancies existed between official test results and real-world emission measurements.

Right up to the day the cheating went public, the vehicles VW sold in the United States were designed to defeat emissions tests. On August 5, VW executives met with CARB and handed over a great deal of data claiming to explain the emission issues with TDI diesels. It took CARB engineers a full week to evaluate the highly technical information, but once they did, their report was unequivocal: Volkswagen’s “explanation” for its own engine performance was nonsense, the report said.

On August 18, VW finally admitted to CARB that it had been lying about the cause of the emissions issues for nearly two years. Over the next few weeks, more than 40 employees at VW and Audi destroyed thousands of documents, limiting the ability of investigators to understand how decisions were made and who was responsible for them. As of this writing, VW has paid out more than $ 22 billion in fines and legal settlements related to its lies, vastly more than it would’ve cost to equip its vehicles with adequate air quality control systems in the first place. VW recently began selling diesel cars in the US again, and such sales represented 12 percent of its total vehicle sales in April, down from a high of ~25 percent in the years before the scandal. It is not clear if demand for diesels in the US will recover. Clearly the cars are still enticing to some buyers, but VW’s brand took a substantial beating throughout this process.

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