VW Emissions Cheating Ran Deep

Volkswagen AG's emissions cheating spanned more than a decade and arose from deliberate efforts by dozens of employees to mislead regulators and consumers about diesel-powered vehicles, according to a lawsuit from New York's top law-enforcement official.

The decision to use software to manipulate emissions tests traced back as far as 1999, when engineers at the company's Audi luxury unit developed technology to quiet diesel vehicles, according to a lawsuit filed Tuesday by New York Attorney General Eric Schneiderman. The technology, rolled out in 2004, made vehicles exceed European emissions standards, so the engineers added software they called “acoustic function" to turn it off during emissions tests, the lawsuit said.

Volkswagen eventually developed the software, known as defeat devices, for diesel vehicles sold in the U.S. starting in 2008. The German auto maker in September admitted to U.S. environmental regulators that the vehicles used software that allowed them to pollute on the road up to 40 times the amount allowed. The Environmental Protection Agency's subsequent disclosure of the cheating sparked probes across the globe and forced the resignation of Chief Executive Martin Winterkorn.

The latest lawsuit cites emails and other documents to allege a prolonged effort among dozens of Volkswagen employees in the U.S. and Germany to equip vehicles with the devices and stonewall inquiries from regulators. The deception went far beyond the “couple of software engineers" whom Michael Horn, then Volkswagen's top U.S. executive, blamed in October, according to the lawsuit. Some managers, engineers and executives named in the suit haven't been previously identified; others have been suspended or resigned since regulators disclosed the cheating.

In June, Volkswagen agreed to pay up to $15 billion to settle claims with environmental regulators, owners of 475,000 vehicles with two-liter diesel engines and some state authorities. The company still faces legal claims affecting more than 80,000 three-liter diesel vehicles and a U.S. Justice Department criminal probe. The software is on some 11 million vehicles world-wide, Volkswagen has said.

Mr. Schneiderman's suit seeks up to $450 million in civil penalties for what it calls Volkswagen's “egregious and pervasive violations" that “strike at the heart" of state environmental laws, and were “the result of a willful and systematic scheme of cheating by dozens of employees at all levels of the company." Massachusetts and Maryland filed similar lawsuits on Tuesday.

A Volkswagen spokeswoman called Tuesday's allegations “essentially not new," adding the company has been addressing them in discussions with U.S. and state authorities. “It is regrettable that some states have decided to sue for environmental claims now, notwithstanding their prior support of this ongoing federal-state collaborative process," she said. Volkswagen declined interviews with those individuals mentioned in the New York suit. Aruna Viswanatha and Mike Spector, The Wall Street Journal – July 20, 2016