U.S. federal and state prosecutors continue to probe General Motors’ deadly ignition switch fault to determine if criminal charges can be laid.
Potential criminal charges include mail and wire fraud and could hinge on whether there is evidence that GM attempted to deliberately mislead safety investigators and the public over the ignition switch issue. But a Columbia University law expert says that will be a tough case to prove.
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The ignition switch on the cars bounced out of the run position while the car was being driven, deactivating the airbags and making steering difficult. The fault resulted in at least 13 fatalities and 54 crashes.
'Let’s say that most of North America believes that General Motors was scandalously negligent in responding to the ignition problem. That however is not criminal'- Columbia law professor John Coffee
An internal probe of GM’s small cars, especially the Chevrolet Cobalt, uncovered evidence that problems with the switches were discussed at the company several times over the past 10 years.
Internal investigator Anton Valukas found there was a pattern of management deficiency and misjudgment that led to safety problems being ignored for years, but insisted there did not appear to be a cover-up at GM.
CEO Mary Barra fired 15 people over the issue and has twice appeared before Congress to testify about the switches. She'll be back before Congress Thursday, at a hearing examining "corporate accountability."
Would charges be laid?
John Coffee, a professor of law at Columbia University, says it would be precedent-setting for GM’s senior executives to face some form of prosecution, but he believes U.S. prosecutors are looking into it.
“What’s unusual and what may be in prospect here is an attempt to indict senior officers of the corporation because of the corporation’s failure to respond to a problem,” Coffee said in an interview with CBC’s The Lang & O’Leary Exchange.
“Let’s say that most of North America believes that General Motors was scandalously negligent in responding to the ignition problem. That however is not criminal,” he added.
In cases such as Worldcom CEO Bernard Ebbers or Enron CEO Jeffrey Skilling, the top executive of the company was indicted. But then prosecutors were able to prove that both were running companies whose business model was based on fraud.
The GM case is different, Coffee said. In order to press a criminal case, prosecutors would have to find that someone made a false statement to a regulatory agency or covered up by destroying documents or obstructing justice.
“This case, you need more than a charge, more than a theory that is specific, you’re going to need actual witnesses. You can’t make this kind of case just with emails and documents. You’re going to need some officer willing to testify against fellow officers,” Coffee said.
He said there may be a public appetite to take down someone at the top as a deterrent for other companies.
However, Barra's behaviour, testifying before Congress and opening an embarrassing investigation for public scrutiny, may help avert criminal charges against individuals.
There is precedent for a criminal proceeding against a major automaker over a safety defect. Toyota Motor Corp. reached a $1.2-billion settlement with the U.S. Department of Justice, after a four-year criminal investigation focused on unintended acceleration of its vehicles. It was forced to admit that it misled U.S. consumers over the safety issues, though no charges were laid against individuals within the company.
GM has already paid a $35-million fine for failure to report a safety defect in a timely manner. But, as in the case of banks who paid large fines related to the selling of subprime mortgages, there is opportunity for a further criminal fine.
Unlike a civil court case, GM's 2008 bankruptcy would offer no protection against criminal charges.