Business First Look

Volkswagen to pay another $157 million for emissions cheating

The German automaker, which has already paid more than $20 billion in buybacks, repairs, and fines over their diesel emissions scandal, has agreed to settle environmental lawsuits with 10 states that follow California's clean air standards.

A giant logo of the German car manufacturer Volkswagen sits atop a factory building in Wolfsburg, Germany.
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The price tag of Volkswagen emissions scandal is continuing to grow, as the company agreed to pay another $157.45 million to settle environmental claims from 10 US states on Thursday. The money for the latest settlement will go to Connecticut, Delaware, Maine, Massachusetts, New York, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington.

The new agreement is separate from a similar settlement agreement in 2016, in which Volkswagen agreed to pay $603 million to 44 states. While the amount for the recent settlement is much smaller, New York Attorney General Eric Schneiderman said his state's $32.5 million share of the settlement is New York’s largest-ever air pollution fine.

This settlement "makes clear that no company – however large or powerful – is above the law,” said Mr. Schneiderman.

The new deal also breaks records in Massachusetts, where the $20 million share is that state’s largest-ever environmental civil penalty. But the total amount is still significantly less than what the states sought when they sued Volkswagen last year, when the state of Washington alone planned to impose a $176 million fine.

The company said the new deal "avoids further prolonged and costly litigation as Volkswagen continues to work to earn back the trust of its customers, regulators, and the public."

Volkswagen caused widespread public outrage when it was revealed that the company put software in 580,000 diesel-powered cars in the US in order to cheat legal emissions requirements. Over a six-year period, the program allowed cars to pass emissions tests while the vehicles emitted up to 40 times the legally allowable level of pollution.

When this became public, lawsuits and arrests followed, as did the ousting of the top emissions compliance manager at Volkswagen, Oliver Schmidt, as The Christian Science Monitor reported in January:

For more than a year after researchers at West Virginia University first raised questions over the diesel motors in 2014, [Mr.] Schmidt and other VW officials repeatedly cited false technical explanations for the discrepancy. Only in September 2015 did the company admit the cars were programmed to cheat the tests.

The first VW employee to be arrested on charges of conspiracy was a VW engineer in southern California, James Liang. Mr. Liang pleaded guilty in September to charges that included conspiracy to defraud the federal government and violating the Clean Air Act. He faces up to five years in federal prison.

Liang’s grand jury indictment shows a 10-year conspiracy by Volkswagen employees in the US and Germany to trick US regulators by using the emissions software. According to the Associated Press, the indictment detailed emails between Liang and coworkers that “initially admitted to cheating in an almost cavalier manner but then turned desperate after the deception was uncovered.”

Earlier this March, Volkswagen pleaded guilty to fraud, obstruction of justice, and falsifying statements as part of a $4.3 billion settlement with the US Justice Department. The company has also agreed to aggressive reforms, new audits, and independent oversight for three years.

In addition to legal payments, Volkswagen has already paid out $20 billion to buy back or repair cars affected by the scandal, and a criminal investigation against the company in its home country of Germany is still ongoing.

This report includes material from the Associated Press and Reuters.