FEight years after the diesel scandal began, the first former top manager of the Volkswagen Group has pleaded guilty in court. The former Audi boss Rupert Stadler left his lawyer before the Munich Higher Regional Court a confession read out, which he himself confirmed with a brief “Yes” when asked by the judge.
This means that the legal processing of the biggest industrial scandal in decades has probably reached its peak. Because it is becoming apparent that no other former board members of the Volkswagen Group be held responsible for the fraud.
Linked to the promise of “clean diesel”, the group had sold millions of vehicles worldwide, which in reality emitted far more pollutants than permitted. This was covered up by engine control software, which ensured that the exhaust gas thresholds were met on the test bench, but not in regular operation.
In the US, the group had to pay draconian fines and take back tens of thousands of cars. At the beginning of the scandal, it was not certain whether Volkswagen would survive this crisis financially. The then CEO Martin Winterkorn and Supervisory Board Chairman Ferdinand Piëch had to vacate their posts.
Former board member Stadler was not accused of the diesel manipulation himself, but because he had not stopped selling cars with the fraudulent software when he found out about the manipulation. Instead, the manipulated Audis were resold until early 2018.
It would have taken “more care”, says Stadler’s confession. He initially relied on experts, but then failed to take further action and provide clarification. Up until this admission on the 168th day of the hearing, the 60-year-old manager had always denied any guilt.
Stadler’s deal with prosecutors and the court
However, after the court indicated that it considered his guilt partially proven, he made a deal with the public prosecutor and the court: In return for the confession, he does not have to go to prison, but receives a suspended sentence and has to pay 1.1 million euros pay. Judge Stefan Weickert wants to announce the verdict in June.
Previously, in the Munich trial, the former Audi engine boss Wolfgang Hatz and a co-accused engineer had confessed to having manipulated engines. They too had made corresponding agreements with the court.
The wording of Stadler’s confession was even agreed with Judge Weickert. In the opinion of the court, the manager had thus fully confessed to the allegations of fraud in the room, a court spokesman confirmed.
In the second major criminal proceedings against former VW managers before the district court in Braunschweig, such a solution is not yet in sight. Among other things, the former VW brand board member Heinz-Jakob Neusser is accused there.
Actually, Winterkorn should also be on trial there. But because the 75-year-old is in poor health, the judges have separated his proceedings and postponed the start of the main hearing indefinitely. It is quite possible that the ex-CEO will be spared a procedure like Stadler, who was once one of his close employees. And with it a judgement.
The head of the German Environmental Aid, Jürgen Resch, who is one of the harshest critics of the auto industry, is not satisfied with the outcome of the Audi trial. “We see once again that we need corporate criminal law in Germany,” he said in an interview with WELT.
DUH boss calls for criminal proceedings against corporations
Instead of laboriously proving that individual managers have committed a crime in criminal proceedings, the company itself should be held liable for cases such as diesel fraud. “Whether the damage is caused by intentional behavior on the part of the board of directors is secondary. In any case, he has to take responsibility,” said Resch.
Germany must get away from “giving the industry a clean bill of health“. The environmental aid is not involved in criminal or civil proceedings relating to the diesel scandal, but is suing the administrative courts against the state and its role in the investigation. This should also help the cheated customers.
“In Germany, we find it incredibly difficult to find adequate help for those affected in such scandals. Anyone who bought a clean diesel with allegedly lower CO₂ emissions in good faith has been harmed several times,” said Resch. On the one hand, he is not driving a clean vehicle, on the other hand, the resale value has fallen sharply.
Shareholders were also hurt. The diesel scandal was therefore still an issue at Volkswagen’s annual general meeting last week.
Demonstrators criticized the fraud by the company and shareholder representatives – as in previous years – accused the supervisory board of not having taken sufficient action. After all, shareholders lost billions in the scandal, VW himself estimates the total costs of the legal disputes and compensation at more than 30 billion euros.
Corporate governance professor Christian Strenger considers the consequences of the Stadler confession for the other ongoing criminal and private legal proceedings to be “simply dramatic”. Stadler and the former Audi chief engineer Wolfgang Hatz had finally admitted “what we and you have known for a long time,” he said in the direction of VW supervisory board chairman Hans Dieter Pötsch.
“The phantom picture that the Management Board and Supervisory Board had been reciting like a prayer wheel and that was already burdening the group coffers with tens of millions of euros in legal costs: ‘It was just the little people or low-ranking employees’ was finally reduced to absurdity,” said Strenger.
The fact that one of the “big ones” has now stood does not change anything from the group’s point of view. Volkswagen had agreed to pay damages with Winterkorn, Stadler and other ex-board members.
In the case of Stadler, that was a sum of 4.1 million euros. Winterkorn had to pay 11.2 million. Of course, the outstanding pensions of the managers are higher than these amounts, so that on balance they still receive money from VW.
Nothing will change about that either: “The ones from the Volkswagen AG The settlements that have been concluded contain no condition precedent or a condition subsequent and no right of withdrawal in the event of a confession or a criminal conviction of Mr. Stadler or Mr. Hatz” – this is how the group has it officially distributed.
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