VW continues to provide a case-study in how a corporation can dig an even deeper hole for itself once it engages in misconduct.
First VW cheated on its EPA emissions tests for years.
Then VW hid its misconduct from its own board.
Then VW publicly understated the scope of the problem.
Then, according to the US DOJ, VW allegedly “impeded and obstructed” investigators and regulators, providing “misleading information.”
Now it is refusing to turn over internal emails to criminal investigators in the United States, claiming that it is prohibited from doing so under German privacy laws. While that is probably true – European privacy laws are much stricter than similar laws in the United States – this only exacerbates the negative impression VW is leaving with investigators in the US.
As the DOJ’s principles on corporate prosecutions makes clear, this is exactly the type of conduct that makes a bad problem worse for a corporation under investigation. It’s also the type of conduct that can lead to charges beyond those potentially warranted by the initial misconduct, like obstruction of justice.
Take a look at the factors federal prosecutors are supposed to consider when evaluating whether to charge a corporation with a criminal offense (I’ve pasted all ten below), and you’ll see that – at least from the outside – it looks like VW is just digging itself a deeper hole.
- the nature and seriousness of the offense, including the risk of harm to the public, and applicable policies and priorities, if any, governing the prosecution of corporations for particular categories of crime (see USAM 9-28.400);
- the pervasiveness of wrongdoing within the corporation, including the complicity in, or the condoning of, the wrongdoing by corporate management (see USAM 9-28.500);
- the corporation’s history of similar misconduct, including prior criminal, civil, and regulatory enforcement actions against it (see USAM 9-28.600);
- the corporation’s willingness to cooperate in the investigation of its agents (see USAM 9-28.700);
- the existence and effectiveness of the corporation’s pre-existing compliance program (see USAM 9-28.800);
- the corporation’s timely and voluntary disclosure of wrongdoing (see USAM 9-28.900);
- the corporation’s remedial actions, including any efforts to implement an effective corporate compliance program or to improve an existing one, to replace responsible management, to discipline or terminate wrongdoers, to pay restitution, and to cooperate with the relevant government agencies (see USAM 9-28.1000);
- collateral consequences, including whether there is disproportionate harm to shareholders, pension holders, employees, and others not proven personally culpable, as well as impact on the public arising from the prosecution (see USAM 9-28.1100);
- the adequacy of remedies such as civil or regulatory enforcement actions (see USAM 9-28.1200); and
- the adequacy of the prosecution of individuals responsible for the corporation’s malfeasance (see USAM 9-28.1300)