What did the President know and when did he know it? Former Senator Fred Thompson wrote those lines, when he was a staffer on the Senate Watergate Committee. His boss, Senator Howard Baker, then uttered them during the Watergate Hearings. Since that time, these two lines have been a mainstay of any scandal or corruption investigation because the cover-up is almost always perceived to be worse for the participants than the underlying crime.
I thought about those questions when I read about the recent remarks of Volkswagen Chairman Hans Dieter Pötsch and Chief Executive Matthias Müeller in a Press Conference given in Wolfsburg Germany last week. Pötsch explained “There was not one single mistake, but rather a chain of errors that was never broken.” However, he stressed that it was “the misconduct and shortcomings of individual employees” coupled with a “mind-set in some areas of the company that tolerated breach of rules.”
What he clearly did not say was who in the company ordered the defeat devices to be installed in the VW autos at issue, when the installation of the defeat devices began and who was involved in the cover-up over the now 10 year period that the defeat devices were used. It is still not clear how VW will answer these questions, when they will do so and if any employees will shed light on these questions.
One thing that I believe VW can count on is the negative response to such platitudes from the US government, particularly in light of the Yates Memo refocusing prosecution efforts at individuals and the public outcry after the Justice Department settled with General Motors, for a Deferred Prosecution Agreement only, for its ignition scandal.
All of the above clearly begs the question of whether a large multi-national organization which has engaged in years long process to evade legal standards it is required to meet is capable of investigating itself. The tone that both Pötsch and Müeller took at the news conference was rather defiant but they may be using an old playbook which is no longer valid for US regulators.