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Inside VW’s
Campaign of Trickery
New details emerge in Volkswagen’s broad conspiracy to
cover up a campaign aimed at deceiving pollution regulators.

By JACK EWINGMAY 6, 2017

This article is adapted from “Faster, Higher, Farther: The Volkswagen Scandal” by Jack Ewing, the European economics correspondent for The New York Times based in Frankfurt. The book, to be published May 23 by W. W. Norton, reveals new details of a broad conspiracy within Volkswagen to cover up the fact that its cars were designed to deceive pollution regulators.

FRANKFURT — Volkswagen was a little more than a month away from the biggest crisis in its history when Oliver Schmidt, a high-ranking engineer for the carmaker who dealt with regulators in the United States, wrote a reassuring email to his superiors.

Mr. Schmidt had just met with Alberto Ayala, a deputy executive officer of the California Air Resources Board, the state’s air quality enforcer. For well over a year, Mr. Ayala had been pushing Volkswagen to explain why its diesel passenger cars polluted so much more in ordinary driving than they did in California testing labs.

Mr. Schmidt’s email, which has not been previously reported, was dated Aug. 5, 2015. Hours earlier, on the sidelines of an industry conference in Michigan, Mr. Schmidt had presented Mr. Ayala with a binder full of detailed technical information which purported to offer a solution to the emissions problem.

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The meeting “went very well,” Mr. Schmidt wrote. He cautioned, however, that the information he presented might encounter “headwind” when it was examined by experts at the Air Resources Board lab in El Monte, near Los Angeles.

That was an understatement.

The experts soon concluded that the technical information Mr. Schmidt presented was yet another smoke screen — the latest in a series of maneuvers by the automaker to hide its misdeeds. A few weeks later, having run out of excuses, Volkswagen was forced to admit that the diesels it had sold in the United States since late 2008 had contained software designed to camouflage emissions that vastly exceeded legal limits.

Media reports on the scandal have usually focused on Volkswagen’s original sin: the company’s decision in 2006 to equip its diesels with illegal software.

But the most costly aspect of the wrongdoing for Volkswagen may have been the cover-up that the company orchestrated after regulators first became suspicious.

The following reconstruction, based on interviews with dozens of participants and a review of internal Volkswagen documents and communications, shows that the cover-up spanned years and lasted until days before the company’s lies were exposed. Volkswagen employees manipulated not only the engine software, but also generated reams of false or misleading data to hide the fact that millions of vehicles had been purposely engineered to deceive regulators and spew deadly gases into the air.

Documents and interviews also shed new light on the role of Mr. Schmidt, the Volkswagen compliance official who is so far the only company executive to be put behind bars. Arrested when he visited the United States for the 2016 Christmas holidays, Mr. Schmidt is being held without bail awaiting trial for fraud and conspiracy in Detroit.

Mr. Schmidt maintains that he was misled by other Volkswagen engineers and in-house lawyers. Other suspects, including five individuals indicted on federal charges, are believed to be in Germany, which does not usually extradite its citizens to states outside the European Union.

https://www.nytimes.com/2017/05/06/business/inside-vws-campaign-of-trickery.html?ref=dealbook

It's a long piece.