In a week of bombshell corruption news, one of the biggest was the announcement of the indictment of former Volkswagen CEO Martin Winterkorn for his role in the company’s 2015 emissions-testing scandal. VW, after having shelled out some $25 billion in fines, penalties, costs and damages, now faces the prospect of having the line of knowledge and authority reach all the way up to the CEO’s chair. This will only make things worse for the company.
Winterkorn is charged with having actual knowledge of the defeat device installed to provide fraudulent emissions readings for the deiseal vehicles manufactured by the company. Even worse, he is alleged to have instructed company employees to continue deceiving regulators about the fraud. However, Winterkorn is a German citizen, residing in Germany. An important question is whether he will ever answer to these charges in a United States courtroom.
Germany does not extradite its citizens to the United States for economic crimes so at this point it appears far from likely Winterkorn will ever answer the charges at trial in the United States. A spokesman for the German justice ministry confirmed that the government would not extradite Winterkorn. Of course, if he travels outside Germany to another European Union country or any other country with an extradition treaty, he could easily be swooped up and transported to the United States. Winterkorn may decide the rest of his vacations should be in the German countryside.
We wonder what effect this U.S. indictment will have on German prosecutors. Will Germany have the will to indict and try the former head of the world’s largest auto manufacturer and pride of Germany?
Chancellor Angela Merkel and her party are allies with the firm. If German prosecutors are unable or unwilling to indict Winterkorn, it could send a very strong and negative signal to the German manufacturing sector, particularly the elite, that you will not be prosecuted, no matter how bad it looks internationally.