19 ms·

Volkswagen Official Gets 7-Year Term in Diesel-Emissions Cheating

397 points by veidr 9y ago

ryanwaggoner 9y ago
Having been transferred back to Germany, he came to the United States for a vacation with his wife and was seized as he waited for a departing flight in Miami. That was an expensive vacation. Seriously, good to see justice served. Curious to see what Germany does to the top execs there.
- throwawayjava 9y ago
  Kind of surprising that he returned to the USA (talk about cocky!) I wonder if the USA would've gone through the diplomatic rigmarole to get him extradited. Anyone familiar with these sorts of cases have an opinion?
  - khuey 9y ago
    The article talks at length about how Germany refuses to extradite its own citizens, and even mentions an VW exec of Italian nationality arrested in Germany who is expected to be extradited.
    - throwawayjava 9y ago
      Well, that's some egg on my face. Thanks for pointing it out!
    - kuschku 9y ago
      > and even mentions an VW exec of Italian nationality arrested in Germany who is expected to be extradited. That’s very unlikely, though. The current legal consensus is that the German constitution bans any extradition of any person to a country that has death penalty (no matter if the person faces it or not)
- maxxxxx 9y ago
  "Curious to see what Germany does to the top execs there." Most likely nothing from what I can see in the news.
  - Tomte 9y ago
    That's why top executives' homes were raided? So that "nothing" will happen?
    - maxxxxx 9y ago
      Do you really think one of the big guys will go to jail? Somebody like Winterkorn? Maybe some little guy will be made the fall guy and it will end up like banks in 2008.
- IMTDb 9y ago
  > Curious to see what Germany does to the top execs there. Around as much as the US doe to rich politically linked US execs. Practical example: remind me how much was GM fined, and how long did the exec serve for emission cheating ?
  - WillPostForFood 9y ago
    GM hasn't been found to have cheated yet. So far there is a class action lawsuit by a private firm that has tested one truck.
    - rosege 9y ago
      What about their ignition scandal - did anyone go to jail for that?
      - Aloha 9y ago
        I'd argue there is a difference between making a faulty product and then failing to fix it, and intentionally making a device to circumvent the law. GM also paid 900 million dollars to the government as a fine and set aside 600 million to pay victims of the car. A report was commissioned which basically says GM failed to understand its own cars enough to understand why the failure was important. Another apparent compounding factor was the 2008 bankruptcy of GM. http://www.beasleyallen.com/webfiles/valukas-report-on-gm-redacted.pdf http://www.beasleyallen.com/webfiles/valukas-report-on-gm-re...
      - CydeWeys 9y ago
        Intent matters as far as the law is concerned. A lot.
- smartician 9y ago
  German-American here, I haven't followed the case in the German media extensively, but there is a widespread public opinion that this was a welcome opportunity to punish a pesky German competitor, by throwing the book at them by the US government working together with the US auto lobby. If the same had been done by GM for example, they don't think anyone would have went to prison for even a day. The other half is asking when the German justice system will finally start their prosecution.
  - pcurve 9y ago
    "If the same had been done by GM for example, they don't think anyone would have went to prison for even a day" I don't disagree that the government went after VW hard, and it's very likely that the fine would've been much lower had the same crime been perpetrated by GM. However, I think government took a tougher stance because VW was a foreign company, period; not because VW was viewed as a competitor to domestic car makers. People don't cross shop domestic and VW.
    - sanderjd 9y ago
      > People don't cross shop domestic and VW. Huh? Don't most people just shop for ... cars?
      - rootusrootus 9y ago
        Anecdotally, not so much. My next door neighbors won't buy anything but Toyota. The guy across the street is committed to Mopar. Friend of mine only looks at Subarus. My mom hasn't bought a car that wasn't from GM in decades, if ever. I'm the black sheep of the family in this regard, having owned one of almost every brand. Except VW, haven't tried something from them yet.
        rgbrenner 9y ago
        there are stats for this: https://www.kbb.com/car-news/all-the-latest/this-week-in-car-buying-brand-loyalty-bumps-up-ford-lengthens-loans/2100000592/ https://www.kbb.com/car-news/all-the-latest/this-week-in-car... People do comparison shop and change brands.
- jamoes 9y ago
  > good to see justice served I believe his participation in fraud should have repercussions, but I hardly feel like caging him up for 7 years is "justice". I'm not saying I know what the perfect justice would be, but I think it should be closer to restitution to those he harmed, rather than just punishment. Ultimately, I think incarceration is a savage practice, and I hope for the day we're able to deliver justice without resorting to locking someone up. I think humanity will eventually look back at our practice of mass incarceration as quite primitive.
  - s73ver_ 9y ago
    Unfortunately, I really believe that jail is the only deterrent for these people. Fines aren't going to do anything; they already have enough money that they never have to work, and you're never going to fine them enough for that to change.
  - hueving 9y ago
    What do you propose to do with criminals that pose a direct risk to society? (e.g. serial killers)
  - tajen 9y ago
    And we also have to note that competitors may have been between the allowed bounds, but still polluting. Everyone is guilty of pollution, VW is only guilty of cheating.
    - rz2k 9y ago
      If a people and their state have decided that a million cars are beneficial enough to cost 100 statistical deaths through pollution, it isn’t up to executives at the manufacturer to decide that they really meant 200 deaths. It’s the same with other faulty products on an individual scale. People make daily decisions based on vague ideas about the risks involved, not with the idea that they avoid all risk. For example you aren’t allowed to pack a parachute incorrectly on the basis that skydiving is dangerous anyway.
  - avar 9y ago
    If I kill someone and rob them of the next 50 years of their life, how long should I be in prison for? This guy, statistically, was involved in a scheme that robbed a whole lot more people of a whole lot more years than that due to the effects if pollution on public health.
- djsumdog 9y ago
  I dunno. Benefit of the doubt, let's go Stanley Milgram on this. He had people in authority telling him this was okay. Lawyers gave him the go-ahead. As stated in other comments, he didn't make a whole lot of money. I feel like this guy could have been a lot of people we know. You get asked to cook some numbers, it comes in all official, legal even signs off on it, and now you're liable. Whistle blowing is not an easy thing to do. Not when you're in that deep. I feel like the people at the top should be thrown in jail, but they can't because they're all in Germany. Meanwhile, is Germany going to let this guy rot, when really their government should offer to extradite one of the people at the top who had full knowledge and authorization over this, in exchange for commuting this patsy's sentence? Let's go back to the Stanley Milgram experiments. Say Milgram was a sick fuck and those people did administer a lethal dosage to the guy in the other room. Who would go to jail?
  - CydeWeys 9y ago
    These people committed the systematic, deliberate, and stealthy statistical murders of dozens of US citizens. They deserve no benefit of the doubt whatsoever. They knew exactly what they were doing. "Just following orders" was not a valid defense at the Nuremberg trials and it should not be here either. Throw everyone we can get our hands on in jail pour encourager les autres. Once it becomes clear that anyone participating in such a scheme, at any level, faces years in prison, it will be less likely to happen again, and as a direct result hundreds of fewer Americans will not be murdered by illegal air pollution in the future.
    - kuschku 9y ago
      > These people committed the systematic, deliberate, and stealthy statistical murders of dozens of US citizens. Every car manufacturer currently does. Some even literally killed people by cheaping out on braking systems. Yet no US car executive is in jail. This is purely a political play.
      - xbzbanna 9y ago
        VW actively deceived regulators in a coordinated manner for months after they started investigating and asking questions about the defeat devices. This is not normal behavior for a car manufacturer or any public company under investigation. They produced tons of fraudulent data, took regulators for fools, and went so far as to stage a recall they knew ahead of time wouldn't solve the problem, all while millions of cars continued spewing cancer-causing diesel fine particulates. It would be shocking if the hammer didn't come down hard in those circumstances.
ams6110 9y ago
Seems excessive to me. 7 years is more than many violent offenders get. Way more than necessary to make the point.
- rectang 9y ago
  White collar crime scales better than violent crime.
  - paulpauper 9y ago
    mail fraud and wire fraud penalties are harsh though exec fraud, such as insider trading, is much harder to punish and the sentences more lenient relative to the $ taken
- Avshalom 9y ago
  How many lives did this statistically end vs the average violent criminal, and over how many years did this have to be a conscious choice.
  - ams6110 9y ago
    Impossible to say. But we all statistically end lives by doing many ordinary things, such as driving to work. It satisfies the need revenge I guess.
    - paulpauper 9y ago
      Far more people die in accidents than from emissions, but if people stopped driving it would indirectly cost lives in terms of econ stagnation, I suppose
    - mikeash 9y ago
      That’s not comparable. A commute kills perhaps a millionth or a billionth of a person. It’s sensible to focus much more attention on individual decisions that kill hundreds or thousands.
    - 9y ago
stevenwliao 9y ago
It's interesting that the executive received more jail time than the engineer (7 years vs 40 months).
- chunsj 9y ago
  Who orders should take more responsibility.
- ams6110 9y ago
  That part seems appropriate. Executives should be more accountable than employees.
- Trav5 9y ago
  I was thinking it was interesting the engineer received jail time. I've not researched at all, but I could see someone performing a job and having management tell them that it's all good with some over-their-head legal explanation, even though it does not seem like it to the engineer. It's neat to see jail time trickle down though, seems like a better deterrent than a financial cost. It seems to me that it would be easier to believe the financial cost would not hit you, that you could get out of it or not have the cash. Where a jail time potential would make me think twice about anything potentially shady.
  - abraae 9y ago
    I think if the engineer had an email from management telling them "it's all good" then the engineer would probably be off the hook.
- ggm 9y ago
  The executive had the authority to start or stop what engineers do. The moment of decision vests with the exec. The engineer did wrong things, and I suspect would own that they broke the 'engineers code' which is pretty much the apocryphal 'try to do no harm' thing doctors don't actually sign to. The exec on the other hand, had the 'earn shareholder money' mantra stamped into their DNA like a stick of rock candy. The morality play around what executive grades think, and do regarding societal expectations is pretty well understood: thats why its the mainstream of ongoing current fiction. If you want to look to fiction for instances of people saying scientists or engineers have to make moral decisions, you're going to C.P. Snow "the search" (1959) or Neville Shute "No Highway" (1948) while I can look down any bookshelf and find 'wolf of wall street' staring me in the eyes..
Dowwie 9y ago
Is there a chance for early release? This 7 year sentence could become 10 months.
- tptacek 9y ago
  Not really; there's no federal parole, just good behavior time.
  - daveguy 9y ago
    Federal time is usually ~ 80% time served and state/local ~ 20-30% before parole.
nerdponx 9y ago
I was really cynical once I saw that only a lower-level engineer had been charged and convicted of wrongdoing so far. Glad to see that someone higher-up is also being held responsible.
- cies 9y ago
  Even higher-ups are replaceable. Gov'ts need to really catch the shareholders, they own the misbehaving company, and they push them so hard for profits that the workers/managers are lured into cheating the system.
  - throwaway613834 9y ago
    > Even higher-ups are replaceable. Gov'ts need to really catch the shareholders, they own the misbehaving company, and they push them so hard for profits that the workers/managers are lured into cheating the system. OK, I was with everyone saying higher-ups need to be held accountable, but now you're spewing utter nonsense. It's not like the shareholders knew what was going on. What are they going to be "held accountable" for? For being lied to by a cheating company? It's almost like going after taxpayers because they subsidized a criminal's public transportation.
    - throwawayjava 9y ago
      Also, lots of shareholders did lose big? Take a look at VOW 2014 - 2018. The price is basically just now recovering.
      - empthought 9y ago
        Not really a loss unless they had to sell in that timeframe. Earnings and dividends are a more appropriate metric for impact to shareholders.
        beagle3 9y ago
        No, that's not really how that works. They have had a loss, which they may or may not have felt (e.g. if they had to sell, they most certainly did; If those shares were collateral, which is extremely common, they most certainly did). And then there was a gain, which they only had if they did not have to sell. There's also the issue of opportunity cost. Really, the only way economics make sense is if you assume that everything is valued at its real value at any time -- not just when it changes hands.
mcv 9y ago
Good. Too often, top executives seem to be above the law. They need to be held accountable. But I can't help but get the impression that many countries only seem to punish foreign companies. I don't think Germany is punishing German executives, are they? Nor the US punishing American executives?
- ehnto 9y ago
  It was my understanding that the investigation in Germany is ongoing and being quite thorough, which is why it feels like nothing is happening. It might just be taking some time.
  - tajen 9y ago
    It’s encouraging that it’s the second exec jailed, with significant duration (=not probation, not a few months, real years).
  - Tomte 9y ago
    And of course there is much more to investigate. Many more suspects in Germany, many more offices to raid, many more documents to read. That the US trials were faster is no surprise.
- loeg 9y ago
  It doesn't seem he was a top executive based on his pay ($130k salary and ~$40k bonus).
- BurningFrog 9y ago
  I'm also reminded by all the $B fined the EU keep demanding from American companies for various crimes.
- randyrand 9y ago
  I don't buy this. Aren't top executives the ones most likely to be held accountable for company fuck ups? Could you provide some examples where a lower level person is punished when a higher level person should have been? It seems like there is a presumed guilt of executives. That's unhealthy IMO.
jfaucett 9y ago
Its odd to me how many people in this thread are either for or against this decision, not based on a fixing a problem rationale but on moral grounds that this person deserved or didn't deserve the punishment. Does your computer program deserve to be debugged, fixed, and recompiled when it has thrown an error? What would that even mean? Was it evil or bad because it didn't perform how we wanted it to?
- thomasmeeks 9y ago
  To my recollection there was a meaningful amount of evidence that this wasn’t a bug. Rather it was optimizing for the test in such a way that it essentially faked the results, and the company was aware it had been done. So, yeah, where I sit this is a good thing. If it were simply a bug that the company was open and honest about, then lets fix it and move on. If they cover it up, then there’s a solid ethical case for severe consequences in my mind.
- Zigurd 9y ago
  The sentence was severe for a non-violent crime in part because restitution is not practically possible. The damage has been done to the environment. Lives were shortened in amounts that are fairly precisely quantifiable. Competitors were economically disadvantaged. The market for fuels was distorted by a criminal act. This was all done intentionally, to cheat a system that was supposed to improve air quality, throwing such efforts into doubt.
- geofft 9y ago
  I do not understand how the second paragraph of your reply is related to the first. Computer programs (currently) do not respond to incentives, nor do they react to available resources in any way other than the way in which the resource provider explicitly changes them. So the idea of "deserving" does not apply, but it does apply to entities that respond to incentives or consume and make use of resources in complex/emergent ways. If we had strong AI, then yes, certain strong AIs would be more deserving of resources from the commons than others - that's exactly what MIRI is working on. And if you step back from "program" to "project" (meaning the whole system of code + the autonomous decisions of humans, including groups of humans working as companies, to continue developing the code), then yes, certain projects do deserve to be fixed more than others do. A particularly difficult crash in Python 3.6 is much more worth debugging than one in Python 2.4, which in turn is much more worth debugging than one in GW-BASIC, because the net benefit for humanity in exchange for the opportunity cost varies widely.
foobar1962 9y ago
I'm thinking the only suitable punishment for something like this is to ban the company's products from sale for a long period of time. VW-corp isn't hurting from some executive or engineer being incarcerated.
- tim333 9y ago
  It's estimated it's cost VW-corp $30bn which probably even they notice http://money.cnn.com/2017/09/29/investing/volkswagen-diesel-cost-30-billion/index.html http://money.cnn.com/2017/09/29/investing/volkswagen-diesel-...
- Arg0naut 9y ago
  No. That would negatively impact all the employees that had no input or knowledge. Punish the decision makers and the ones who knew about it.
  - tmnvix 9y ago
    > Punish the decision makers and the ones who knew about it. I agree. Though I think there is also a case to be made for punishing further up the 'chain of responsibility' - ultimately including the shareholders (who were punished by the market - and rightly so).
  - watwut 9y ago
    All of them benefited from cheating exactly the same way they would be "punished" now. If we don't punish institution itself, companies are motivated to hire and promote the people ok with small risk of jail in exchange of money and status. Which is exactly what is happening.
loeg 9y ago
> He had a base salary of $130,000, received bonuses of at least $40,000, and had a net worth over $1 million That's executive pay at VW?
- maxxxxx 9y ago
  No. The CEO makes more than 10 million Euro.
  - maxxxxx 9y ago
    Despite the down votes. Top executives at VW really make salaries in the million dollar range. The VW CEO was for a while the highest paid manager in Germany. A guy making 130k is just a middle manager.
- bkanber 9y ago
  Is that in the article? I don't see it -- maybe it was removed as inaccurate?
  - loeg 9y ago
    I believe it was in the article, but I'm not seeing it now either. Not seeing it in NewsDiff either: http://newsdiffs.org/article-history/https%3A/www.nytimes.com/2017/12/06/business/oliver-schmidt-volkswagen.html http://newsdiffs.org/article-history/https%3A/www.nytimes.co... Perhaps the original link was http://www.detroitnews.com/story/business/autos/foreign/2017/12/06/vw-dieselgate-executive-sentenced/108374880/ http://www.detroitnews.com/story/business/autos/foreign/2017... and it was changed to the NYT story later? For some reason that article shows up in my history. That article attributes the quote to the presiding District Judge: > He had a base salary of $130,000, received bonuses of at least $40,000, and had a net worth over $1 million, Cox said Wednesday.
- djsumdog 9y ago
  I could see that. There is way less income disparity in Germany. An engineer that goes for $160k in Seattle or $200k in the Bay Area would only go for about 55k€ in Berlin. It's also affordable to live there, and all their cities big and small have the rail infrastructure the US lost decades ago.
tantalor 9y ago
Nit: I don't like use of "official" for a non-governmental position. What public office does this person hold? Use "executive" instead.
donatj 9y ago
While the actions were certainly dishonest, I have misgivings about the actually illegalality of it. Certainly the court disagrees with me, but in my mind it ran to standards within the requirements of the test, it meets the requirements. Seems like the test is flawed to me.
- brandonbloom 9y ago
  That's not how the law works; intent matters. It's not enough for the tests to pass or for some proof to hold. These things are artifacts of some underlying human objectives.
  - donatj 9y ago
    Was the intent though not to meet the requirements? There are lots of cases where things meet the word of the law but just and it’s fine; word of the law matters as well as intent.
    - beagle3 9y ago
      If I understand correctly (and I might be wrong), the intent was to pass the test, despite failing in the real world conditions that the test is supposed to control for.
tempestn 9y ago
It's good that people are being held accountable, but I'm unsure that prison is an effective mechanism here (or for many other crimes, for that matter). I mean, what's the goal exactly? I'd say the risk of recidivism is about nil, so it's not about protecting society from him, or about rehabilitation. So the goal must be to discourage others from committing similar offenses. Fair enough, but there must be a better and more efficient way to accomplish that than locking people in a compound for several years. In this case, the financial penalties imposed on the companies themselves seem like a more effective tool.
- danielbarla 9y ago
  Why can't we have both (which seems to be happening in this case)? It seems like it's appropriate and efficient, and will actively discourage people from similar activities, at the individual level.
  - theWatcher37 9y ago
    OP seems to dance around saying the idea that punishing people is wrong. OP is wrong. We want cultural and financial incentives not to do wrong. We also want raw primal fear, if you do this evil shit they’re gonna get you and lock you away forever type fear... if you do this stuff.
    - tempestn 9y ago
      I don't believe that punishing people is wrong. I believe that punishing people is a waste of resources unless it accomplishes useful goals, such as discouraging that person or others from behaving in a similar manner in the future. And if you accept that that is the goal, it is then logical to put resources toward the most efficient means of accomplishing it, to maximize your chances of success. I find it unlikely that long prison terms are that most efficient means in most cases (an exception might be dangerous likely re-offenders), given considerable evidence that it is ineffective in discouraging most forms of crime, and in some cases can increase likelihood of engagement in crime by ex-convicts. Edit: there probably is value in some amount of prison time as a deterrent though, as I elaborate on in the comment below. My main point is that I highly doubt there is anything like a linear relationship, if any relationship at all, between the length of prison sentences and the effectiveness of the deterrent. And given that (if in fact it's true,) we might as well keep sentences reasonably short, and use the resources saved more effectively.
zerr 9y ago
Interesting, in US do white-collar criminals have separate prisons, or do they sit with murderers, rapists, mobsters, etc..?
partycoder 9y ago
7 years is not enough. This is a global-scale fraud including long term environmental side-effects. Those vehicles are still out there and will be circulating for at least 10 more years. This guy should dry in jail.
roflcake11 9y ago
Nice. What about Equifax? Or only European enterprises are to be held accountable?
sambeau 9y ago
It's worth bearing this statistic in mind as we discuss this: 38,000 people a year die early because of diesel emissions testing failures. https://www.theguardian.com/environment/2017/may/15/diesel-emissions-test-scandal-causes-38000-early-deaths-year-study https://www.theguardian.com/environment/2017/may/15/diesel-e...
- dumbneurologist 9y ago
  thank you for bringing this up; I wasn't aware exactly how high the costs of cheating really were. but it's tremendously important: what would we say about a person who killed or contributed directly to the killing of 38,000 people? your fact seems less "real" because it's a statistical individual, but they are morally equivalent.
coldtea 9y ago
> Mr. Schmidt did not identify any Volkswagen superiors who might have pressured him to lie to regulators. So, a guy that takes the fall so that the superiors can get scratch free. This can involve anything from some guarantees of financial security post-prison and favorable push for "early exit" from prison, to blackmail and threats for the person's family.
- jstanley 9y ago
  OK, and how would it look if that weren't the case? If superiors hadn't pressured him? It would look exactly the same.
  - GrumpyNl 9y ago
    This is how the costa nostra works, its a very well proven working strategy.
  - coldtea 9y ago
    Yes, but the probability of such a show of loyalty to, nothing really, except maybe the principle of not being a snitch, would be dropping very low.
    - jstanley 9y ago
      What I'm saying is how do you know the guy isn't telling the truth? How do you know it wasn't his idea all along?
      - coldtea 9y ago
        Because it doesn't make sense. This is about the car-maker, the company, saving money. Why would we have an idea about that without being either told and/or compensated for it? He was worried that VW pays too much for proper emissions tech, even though it didn't concern him personally in any financial stake?
SCdF 9y ago
> Having been transferred back to Germany, he came to the United States for a vacation with his wife and was seized as he waited for a departing flight in Miami. Why he risked arrest by traveling to the United States remains a mystery. Because he presumed that he was untouchable?
erikb 9y ago
It sounds to me like a German name, is he from there? Then how is it possible that the US judges this single person directly in the US? He should be sent back to Germany, trialed there, and the US can only sue the company. Everything else is a huge violation according to US thinking even. Think about China would jail and trial a US citizen that is doing on business for Google in China.
sftp 9y ago
Really glad consequences are being held for a person who also benefited from it before.

397 points by veidr 9y ago

Having been transferred back to Germany, he came to the United States for a vacation with his wife and was seized as he waited for a departing flight in Miami. That was an expensive vacation. Seriously, good to see justice served. Curious to see what Germany does to the top execs there.

throwawayjava 9y ago
Kind of surprising that he returned to the USA (talk about cocky!) I wonder if the USA would've gone through the diplomatic rigmarole to get him extradited. Anyone familiar with these sorts of cases have an opinion?
- khuey 9y ago
  The article talks at length about how Germany refuses to extradite its own citizens, and even mentions an VW exec of Italian nationality arrested in Germany who is expected to be extradited.
  - throwawayjava 9y ago
    Well, that's some egg on my face. Thanks for pointing it out!
  - kuschku 9y ago
    > and even mentions an VW exec of Italian nationality arrested in Germany who is expected to be extradited. That’s very unlikely, though. The current legal consensus is that the German constitution bans any extradition of any person to a country that has death penalty (no matter if the person faces it or not)
maxxxxx 9y ago
"Curious to see what Germany does to the top execs there." Most likely nothing from what I can see in the news.
- Tomte 9y ago
  That's why top executives' homes were raided? So that "nothing" will happen?
  - maxxxxx 9y ago
    Do you really think one of the big guys will go to jail? Somebody like Winterkorn? Maybe some little guy will be made the fall guy and it will end up like banks in 2008.
IMTDb 9y ago
> Curious to see what Germany does to the top execs there. Around as much as the US doe to rich politically linked US execs. Practical example: remind me how much was GM fined, and how long did the exec serve for emission cheating ?
- WillPostForFood 9y ago
  GM hasn't been found to have cheated yet. So far there is a class action lawsuit by a private firm that has tested one truck.
  - rosege 9y ago
    What about their ignition scandal - did anyone go to jail for that?
    - Aloha 9y ago
      I'd argue there is a difference between making a faulty product and then failing to fix it, and intentionally making a device to circumvent the law. GM also paid 900 million dollars to the government as a fine and set aside 600 million to pay victims of the car. A report was commissioned which basically says GM failed to understand its own cars enough to understand why the failure was important. Another apparent compounding factor was the 2008 bankruptcy of GM. http://www.beasleyallen.com/webfiles/valukas-report-on-gm-redacted.pdf http://www.beasleyallen.com/webfiles/valukas-report-on-gm-re...
    - CydeWeys 9y ago
      Intent matters as far as the law is concerned. A lot.
smartician 9y ago
German-American here, I haven't followed the case in the German media extensively, but there is a widespread public opinion that this was a welcome opportunity to punish a pesky German competitor, by throwing the book at them by the US government working together with the US auto lobby. If the same had been done by GM for example, they don't think anyone would have went to prison for even a day. The other half is asking when the German justice system will finally start their prosecution.
- pcurve 9y ago
  "If the same had been done by GM for example, they don't think anyone would have went to prison for even a day" I don't disagree that the government went after VW hard, and it's very likely that the fine would've been much lower had the same crime been perpetrated by GM. However, I think government took a tougher stance because VW was a foreign company, period; not because VW was viewed as a competitor to domestic car makers. People don't cross shop domestic and VW.
  - sanderjd 9y ago
    > People don't cross shop domestic and VW. Huh? Don't most people just shop for ... cars?
    - rootusrootus 9y ago
      Anecdotally, not so much. My next door neighbors won't buy anything but Toyota. The guy across the street is committed to Mopar. Friend of mine only looks at Subarus. My mom hasn't bought a car that wasn't from GM in decades, if ever. I'm the black sheep of the family in this regard, having owned one of almost every brand. Except VW, haven't tried something from them yet.
      - rgbrenner 9y ago
        there are stats for this: https://www.kbb.com/car-news/all-the-latest/this-week-in-car-buying-brand-loyalty-bumps-up-ford-lengthens-loans/2100000592/ https://www.kbb.com/car-news/all-the-latest/this-week-in-car... People do comparison shop and change brands.
jamoes 9y ago
> good to see justice served I believe his participation in fraud should have repercussions, but I hardly feel like caging him up for 7 years is "justice". I'm not saying I know what the perfect justice would be, but I think it should be closer to restitution to those he harmed, rather than just punishment. Ultimately, I think incarceration is a savage practice, and I hope for the day we're able to deliver justice without resorting to locking someone up. I think humanity will eventually look back at our practice of mass incarceration as quite primitive.
- s73ver_ 9y ago
  Unfortunately, I really believe that jail is the only deterrent for these people. Fines aren't going to do anything; they already have enough money that they never have to work, and you're never going to fine them enough for that to change.
- hueving 9y ago
  What do you propose to do with criminals that pose a direct risk to society? (e.g. serial killers)
- tajen 9y ago
  And we also have to note that competitors may have been between the allowed bounds, but still polluting. Everyone is guilty of pollution, VW is only guilty of cheating.
  - rz2k 9y ago
    If a people and their state have decided that a million cars are beneficial enough to cost 100 statistical deaths through pollution, it isn’t up to executives at the manufacturer to decide that they really meant 200 deaths. It’s the same with other faulty products on an individual scale. People make daily decisions based on vague ideas about the risks involved, not with the idea that they avoid all risk. For example you aren’t allowed to pack a parachute incorrectly on the basis that skydiving is dangerous anyway.
- avar 9y ago
  If I kill someone and rob them of the next 50 years of their life, how long should I be in prison for? This guy, statistically, was involved in a scheme that robbed a whole lot more people of a whole lot more years than that due to the effects if pollution on public health.
djsumdog 9y ago
I dunno. Benefit of the doubt, let's go Stanley Milgram on this. He had people in authority telling him this was okay. Lawyers gave him the go-ahead. As stated in other comments, he didn't make a whole lot of money. I feel like this guy could have been a lot of people we know. You get asked to cook some numbers, it comes in all official, legal even signs off on it, and now you're liable. Whistle blowing is not an easy thing to do. Not when you're in that deep. I feel like the people at the top should be thrown in jail, but they can't because they're all in Germany. Meanwhile, is Germany going to let this guy rot, when really their government should offer to extradite one of the people at the top who had full knowledge and authorization over this, in exchange for commuting this patsy's sentence? Let's go back to the Stanley Milgram experiments. Say Milgram was a sick fuck and those people did administer a lethal dosage to the guy in the other room. Who would go to jail?
- CydeWeys 9y ago
  These people committed the systematic, deliberate, and stealthy statistical murders of dozens of US citizens. They deserve no benefit of the doubt whatsoever. They knew exactly what they were doing. "Just following orders" was not a valid defense at the Nuremberg trials and it should not be here either. Throw everyone we can get our hands on in jail pour encourager les autres. Once it becomes clear that anyone participating in such a scheme, at any level, faces years in prison, it will be less likely to happen again, and as a direct result hundreds of fewer Americans will not be murdered by illegal air pollution in the future.
  - kuschku 9y ago
    > These people committed the systematic, deliberate, and stealthy statistical murders of dozens of US citizens. Every car manufacturer currently does. Some even literally killed people by cheaping out on braking systems. Yet no US car executive is in jail. This is purely a political play.
    - xbzbanna 9y ago
      VW actively deceived regulators in a coordinated manner for months after they started investigating and asking questions about the defeat devices. This is not normal behavior for a car manufacturer or any public company under investigation. They produced tons of fraudulent data, took regulators for fools, and went so far as to stage a recall they knew ahead of time wouldn't solve the problem, all while millions of cars continued spewing cancer-causing diesel fine particulates. It would be shocking if the hammer didn't come down hard in those circumstances.

ams6110 9y ago

Seems excessive to me. 7 years is more than many violent offenders get. Way more than necessary to make the point.

rectang 9y ago
White collar crime scales better than violent crime.
- paulpauper 9y ago
  mail fraud and wire fraud penalties are harsh though exec fraud, such as insider trading, is much harder to punish and the sentences more lenient relative to the $ taken
Avshalom 9y ago
How many lives did this statistically end vs the average violent criminal, and over how many years did this have to be a conscious choice.
- ams6110 9y ago
  Impossible to say. But we all statistically end lives by doing many ordinary things, such as driving to work. It satisfies the need revenge I guess.
  - paulpauper 9y ago
    Far more people die in accidents than from emissions, but if people stopped driving it would indirectly cost lives in terms of econ stagnation, I suppose
  - mikeash 9y ago
    That’s not comparable. A commute kills perhaps a millionth or a billionth of a person. It’s sensible to focus much more attention on individual decisions that kill hundreds or thousands.
  - 9y ago

stevenwliao 9y ago

It's interesting that the executive received more jail time than the engineer (7 years vs 40 months).

chunsj 9y ago
Who orders should take more responsibility.
ams6110 9y ago
That part seems appropriate. Executives should be more accountable than employees.
Trav5 9y ago
I was thinking it was interesting the engineer received jail time. I've not researched at all, but I could see someone performing a job and having management tell them that it's all good with some over-their-head legal explanation, even though it does not seem like it to the engineer. It's neat to see jail time trickle down though, seems like a better deterrent than a financial cost. It seems to me that it would be easier to believe the financial cost would not hit you, that you could get out of it or not have the cash. Where a jail time potential would make me think twice about anything potentially shady.
- abraae 9y ago
  I think if the engineer had an email from management telling them "it's all good" then the engineer would probably be off the hook.
ggm 9y ago
The executive had the authority to start or stop what engineers do. The moment of decision vests with the exec. The engineer did wrong things, and I suspect would own that they broke the 'engineers code' which is pretty much the apocryphal 'try to do no harm' thing doctors don't actually sign to. The exec on the other hand, had the 'earn shareholder money' mantra stamped into their DNA like a stick of rock candy. The morality play around what executive grades think, and do regarding societal expectations is pretty well understood: thats why its the mainstream of ongoing current fiction. If you want to look to fiction for instances of people saying scientists or engineers have to make moral decisions, you're going to C.P. Snow "the search" (1959) or Neville Shute "No Highway" (1948) while I can look down any bookshelf and find 'wolf of wall street' staring me in the eyes..

Dowwie 9y ago

Is there a chance for early release? This 7 year sentence could become 10 months.

tptacek 9y ago
Not really; there's no federal parole, just good behavior time.
- daveguy 9y ago
  Federal time is usually ~ 80% time served and state/local ~ 20-30% before parole.

nerdponx 9y ago

I was really cynical once I saw that only a lower-level engineer had been charged and convicted of wrongdoing so far. Glad to see that someone higher-up is also being held responsible.

cies 9y ago
Even higher-ups are replaceable. Gov'ts need to really catch the shareholders, they own the misbehaving company, and they push them so hard for profits that the workers/managers are lured into cheating the system.
- throwaway613834 9y ago
  > Even higher-ups are replaceable. Gov'ts need to really catch the shareholders, they own the misbehaving company, and they push them so hard for profits that the workers/managers are lured into cheating the system. OK, I was with everyone saying higher-ups need to be held accountable, but now you're spewing utter nonsense. It's not like the shareholders knew what was going on. What are they going to be "held accountable" for? For being lied to by a cheating company? It's almost like going after taxpayers because they subsidized a criminal's public transportation.
  - throwawayjava 9y ago
    Also, lots of shareholders did lose big? Take a look at VOW 2014 - 2018. The price is basically just now recovering.
    - empthought 9y ago
      Not really a loss unless they had to sell in that timeframe. Earnings and dividends are a more appropriate metric for impact to shareholders.
      - beagle3 9y ago
        No, that's not really how that works. They have had a loss, which they may or may not have felt (e.g. if they had to sell, they most certainly did; If those shares were collateral, which is extremely common, they most certainly did). And then there was a gain, which they only had if they did not have to sell. There's also the issue of opportunity cost. Really, the only way economics make sense is if you assume that everything is valued at its real value at any time -- not just when it changes hands.

mcv 9y ago

Good. Too often, top executives seem to be above the law. They need to be held accountable. But I can't help but get the impression that many countries only seem to punish foreign companies. I don't think Germany is punishing German executives, are they? Nor the US punishing American executives?

ehnto 9y ago
It was my understanding that the investigation in Germany is ongoing and being quite thorough, which is why it feels like nothing is happening. It might just be taking some time.
- tajen 9y ago
  It’s encouraging that it’s the second exec jailed, with significant duration (=not probation, not a few months, real years).
- Tomte 9y ago
  And of course there is much more to investigate. Many more suspects in Germany, many more offices to raid, many more documents to read. That the US trials were faster is no surprise.
loeg 9y ago
It doesn't seem he was a top executive based on his pay ($130k salary and ~$40k bonus).
BurningFrog 9y ago
I'm also reminded by all the $B fined the EU keep demanding from American companies for various crimes.
randyrand 9y ago
I don't buy this. Aren't top executives the ones most likely to be held accountable for company fuck ups? Could you provide some examples where a lower level person is punished when a higher level person should have been? It seems like there is a presumed guilt of executives. That's unhealthy IMO.

jfaucett 9y ago

Its odd to me how many people in this thread are either for or against this decision, not based on a fixing a problem rationale but on moral grounds that this person deserved or didn't deserve the punishment. Does your computer program deserve to be debugged, fixed, and recompiled when it has thrown an error? What would that even mean? Was it evil or bad because it didn't perform how we wanted it to?

thomasmeeks 9y ago
To my recollection there was a meaningful amount of evidence that this wasn’t a bug. Rather it was optimizing for the test in such a way that it essentially faked the results, and the company was aware it had been done. So, yeah, where I sit this is a good thing. If it were simply a bug that the company was open and honest about, then lets fix it and move on. If they cover it up, then there’s a solid ethical case for severe consequences in my mind.
Zigurd 9y ago
The sentence was severe for a non-violent crime in part because restitution is not practically possible. The damage has been done to the environment. Lives were shortened in amounts that are fairly precisely quantifiable. Competitors were economically disadvantaged. The market for fuels was distorted by a criminal act. This was all done intentionally, to cheat a system that was supposed to improve air quality, throwing such efforts into doubt.
geofft 9y ago
I do not understand how the second paragraph of your reply is related to the first. Computer programs (currently) do not respond to incentives, nor do they react to available resources in any way other than the way in which the resource provider explicitly changes them. So the idea of "deserving" does not apply, but it does apply to entities that respond to incentives or consume and make use of resources in complex/emergent ways. If we had strong AI, then yes, certain strong AIs would be more deserving of resources from the commons than others - that's exactly what MIRI is working on. And if you step back from "program" to "project" (meaning the whole system of code + the autonomous decisions of humans, including groups of humans working as companies, to continue developing the code), then yes, certain projects do deserve to be fixed more than others do. A particularly difficult crash in Python 3.6 is much more worth debugging than one in Python 2.4, which in turn is much more worth debugging than one in GW-BASIC, because the net benefit for humanity in exchange for the opportunity cost varies widely.

foobar1962 9y ago

I'm thinking the only suitable punishment for something like this is to ban the company's products from sale for a long period of time. VW-corp isn't hurting from some executive or engineer being incarcerated.

tim333 9y ago
It's estimated it's cost VW-corp $30bn which probably even they notice http://money.cnn.com/2017/09/29/investing/volkswagen-diesel-cost-30-billion/index.html http://money.cnn.com/2017/09/29/investing/volkswagen-diesel-...
Arg0naut 9y ago
No. That would negatively impact all the employees that had no input or knowledge. Punish the decision makers and the ones who knew about it.
- tmnvix 9y ago
  > Punish the decision makers and the ones who knew about it. I agree. Though I think there is also a case to be made for punishing further up the 'chain of responsibility' - ultimately including the shareholders (who were punished by the market - and rightly so).
- watwut 9y ago
  All of them benefited from cheating exactly the same way they would be "punished" now. If we don't punish institution itself, companies are motivated to hire and promote the people ok with small risk of jail in exchange of money and status. Which is exactly what is happening.

loeg 9y ago

> He had a base salary of $130,000, received bonuses of at least $40,000, and had a net worth over $1 million That's executive pay at VW?

maxxxxx 9y ago
No. The CEO makes more than 10 million Euro.
- maxxxxx 9y ago
  Despite the down votes. Top executives at VW really make salaries in the million dollar range. The VW CEO was for a while the highest paid manager in Germany. A guy making 130k is just a middle manager.
bkanber 9y ago
Is that in the article? I don't see it -- maybe it was removed as inaccurate?
- loeg 9y ago
  I believe it was in the article, but I'm not seeing it now either. Not seeing it in NewsDiff either: http://newsdiffs.org/article-history/https%3A/www.nytimes.com/2017/12/06/business/oliver-schmidt-volkswagen.html http://newsdiffs.org/article-history/https%3A/www.nytimes.co... Perhaps the original link was http://www.detroitnews.com/story/business/autos/foreign/2017/12/06/vw-dieselgate-executive-sentenced/108374880/ http://www.detroitnews.com/story/business/autos/foreign/2017... and it was changed to the NYT story later? For some reason that article shows up in my history. That article attributes the quote to the presiding District Judge: > He had a base salary of $130,000, received bonuses of at least $40,000, and had a net worth over $1 million, Cox said Wednesday.
djsumdog 9y ago
I could see that. There is way less income disparity in Germany. An engineer that goes for $160k in Seattle or $200k in the Bay Area would only go for about 55k€ in Berlin. It's also affordable to live there, and all their cities big and small have the rail infrastructure the US lost decades ago.

tantalor 9y ago

Nit: I don't like use of "official" for a non-governmental position. What public office does this person hold? Use "executive" instead.

donatj 9y ago

While the actions were certainly dishonest, I have misgivings about the actually illegalality of it. Certainly the court disagrees with me, but in my mind it ran to standards within the requirements of the test, it meets the requirements. Seems like the test is flawed to me.

brandonbloom 9y ago
That's not how the law works; intent matters. It's not enough for the tests to pass or for some proof to hold. These things are artifacts of some underlying human objectives.
- donatj 9y ago
  Was the intent though not to meet the requirements? There are lots of cases where things meet the word of the law but just and it’s fine; word of the law matters as well as intent.
  - beagle3 9y ago
    If I understand correctly (and I might be wrong), the intent was to pass the test, despite failing in the real world conditions that the test is supposed to control for.

tempestn 9y ago

It's good that people are being held accountable, but I'm unsure that prison is an effective mechanism here (or for many other crimes, for that matter). I mean, what's the goal exactly? I'd say the risk of recidivism is about nil, so it's not about protecting society from him, or about rehabilitation. So the goal must be to discourage others from committing similar offenses. Fair enough, but there must be a better and more efficient way to accomplish that than locking people in a compound for several years. In this case, the financial penalties imposed on the companies themselves seem like a more effective tool.

danielbarla 9y ago
Why can't we have both (which seems to be happening in this case)? It seems like it's appropriate and efficient, and will actively discourage people from similar activities, at the individual level.
- theWatcher37 9y ago
  OP seems to dance around saying the idea that punishing people is wrong. OP is wrong. We want cultural and financial incentives not to do wrong. We also want raw primal fear, if you do this evil shit they’re gonna get you and lock you away forever type fear... if you do this stuff.
  - tempestn 9y ago
    I don't believe that punishing people is wrong. I believe that punishing people is a waste of resources unless it accomplishes useful goals, such as discouraging that person or others from behaving in a similar manner in the future. And if you accept that that is the goal, it is then logical to put resources toward the most efficient means of accomplishing it, to maximize your chances of success. I find it unlikely that long prison terms are that most efficient means in most cases (an exception might be dangerous likely re-offenders), given considerable evidence that it is ineffective in discouraging most forms of crime, and in some cases can increase likelihood of engagement in crime by ex-convicts. Edit: there probably is value in some amount of prison time as a deterrent though, as I elaborate on in the comment below. My main point is that I highly doubt there is anything like a linear relationship, if any relationship at all, between the length of prison sentences and the effectiveness of the deterrent. And given that (if in fact it's true,) we might as well keep sentences reasonably short, and use the resources saved more effectively.

zerr 9y ago

Interesting, in US do white-collar criminals have separate prisons, or do they sit with murderers, rapists, mobsters, etc..?

partycoder 9y ago

7 years is not enough. This is a global-scale fraud including long term environmental side-effects. Those vehicles are still out there and will be circulating for at least 10 more years. This guy should dry in jail.

roflcake11 9y ago

Nice. What about Equifax? Or only European enterprises are to be held accountable?

sambeau 9y ago

It's worth bearing this statistic in mind as we discuss this: 38,000 people a year die early because of diesel emissions testing failures. https://www.theguardian.com/environment/2017/may/15/diesel-emissions-test-scandal-causes-38000-early-deaths-year-study https://www.theguardian.com/environment/2017/may/15/diesel-e...

dumbneurologist 9y ago
thank you for bringing this up; I wasn't aware exactly how high the costs of cheating really were. but it's tremendously important: what would we say about a person who killed or contributed directly to the killing of 38,000 people? your fact seems less "real" because it's a statistical individual, but they are morally equivalent.

coldtea 9y ago

> Mr. Schmidt did not identify any Volkswagen superiors who might have pressured him to lie to regulators. So, a guy that takes the fall so that the superiors can get scratch free. This can involve anything from some guarantees of financial security post-prison and favorable push for "early exit" from prison, to blackmail and threats for the person's family.

jstanley 9y ago
OK, and how would it look if that weren't the case? If superiors hadn't pressured him? It would look exactly the same.
- GrumpyNl 9y ago
  This is how the costa nostra works, its a very well proven working strategy.
- coldtea 9y ago
  Yes, but the probability of such a show of loyalty to, nothing really, except maybe the principle of not being a snitch, would be dropping very low.
  - jstanley 9y ago
    What I'm saying is how do you know the guy isn't telling the truth? How do you know it wasn't his idea all along?
    - coldtea 9y ago
      Because it doesn't make sense. This is about the car-maker, the company, saving money. Why would we have an idea about that without being either told and/or compensated for it? He was worried that VW pays too much for proper emissions tech, even though it didn't concern him personally in any financial stake?

SCdF 9y ago

> Having been transferred back to Germany, he came to the United States for a vacation with his wife and was seized as he waited for a departing flight in Miami. Why he risked arrest by traveling to the United States remains a mystery. Because he presumed that he was untouchable?

erikb 9y ago

It sounds to me like a German name, is he from there? Then how is it possible that the US judges this single person directly in the US? He should be sent back to Germany, trialed there, and the US can only sue the company. Everything else is a huge violation according to US thinking even. Think about China would jail and trial a US citizen that is doing on business for Google in China.

sftp 9y ago

Really glad consequences are being held for a person who also benefited from it before.