Tag Archive: Jusiice

Sep 18 2015

GM Settlement: Another DOJ Failure to Prosecute Executives

Once again the Department of Justice has failed to hold executives of a large corporation criminally accountable. This week General Motors agreed to pay $900 million and entered a deferred prosecution agreement to end a U.S. Department of Justice criminal investigation into its handling of defective ignition switches in many of its vehicles. They have agreed to independent monitoring of their safety systems. If they adhere and their are no further violations, GM could have its record wiped clean. That’s hardly a satisfying agreement for the families of the 124 people who died in GM vehicles that the company knew were unsafe.

And even though General Motors will pay a $900 million penalty, it was 25 percent less than the record $1.2 billion Toyota agreed to pay last year.

“I don’t understand how they can basically buy their way out of it,” said Margie Beskau, whose daughter Amy Rademaker was killed in an October 2006 crash in Wisconsin. She added, “They knew what they were doing and they kept doing it.”

During the press conference US Attorney Preet Bharara defended the settlement and his satisfaction with the internal investigation that was conducted by a law firm with close ties to General Motors.

The two law firms hired for that inquiry, King & Spalding and Jenner & Block, had previously done legal work for G.M. And court papers show that Anton R. Valukas, the chairman of Jenner & Block, who headed the G.M. investigation, helped represent the automaker in its talks with the Justice Department.

Mr. Valukas declined to be interviewed, and several corporate lawyers said such arrangements are not unusual because an outside law firm that conducts an investigation knows the facts of a case. But Deborah L. Rhode, a professor at Stanford Law School, said the public’s interest may suffer when a law firm wears so many different hats.

“It would be nice to know that the law firm doing the internal investigation was truly disinterested and didn’t have an interest in subsequent representation” of the same company, Ms. Rhode said.

Needless to say the agreement has not satified the critics of the investigation. Senators Richard Blumenthal (D-CT) and Edward J. Markey (D-MA) called it “extremely disappointing.” However, congress holds some responsibility in the inability to prosecute the auto makers:

As Danielle Ivory and Ben Protess reported at The Times in July, federal law sets a very high standard for pursuing a criminal case against people who knowingly withhold information about the risks products pose to human life. In auto cases, prosecutors have to prove corporate officers intended to defraud someone, something they do not have to do in food and pharmaceutical cases.

If it was not clear to Congress already that the law needs to change, this case should certainly make it clear. Serious safety problems in cars can be as deadly as contamination in food or drugs, and the law should treat them similarly.

G.M. used the defective switch in numerous cars and it has been linked to 124 deaths, according to compensation claims evaluated by a G.M. fund for victims administered by the lawyer Kenneth Feinberg. The fund has determined that another 275 people deserve compensation for injuries.

This is just one more failure of the Obama Justice Department who are suppose to prosecute criminals.