Photographer: Patrick T. Fallon/Bloomberg

VW U.S. Court Monitor to Triple Staff to Halt Rerun of Scandal

  • Former U.S. deputy attorney general set for three-year role
  • Previous integrity chief’s January ouster highlights challenge

Volkswagen AG’s U.S. court-appointed monitor might roughly triple the number of experts supervising the German car manufacturer to 60 staffers as investigations into its diesel-emissions scandal weigh on the company almost two years after the cheating emerged.

The overseer’s office will work full-time on reviewing documents and conducting employee interviews to get an overview of VW’s sprawling industrial operations and its compliance systems, said Larry Thompson, the monitor.

“My first impression is that the company is taking this very seriously,” Thompson told reporters at VW’s headquarters in Wolfsburg on Tuesday. “The rank and file of VW workers, they really feel that they’ve been let down by the company. If we can help this company to become better, than this is well worth my time.”

VW was forced to accept an external watchdog for three years as part of its settlement with the U.S. Department of Justice and Environmental Protection Agency to resolve claims following the company’s admission that it rigged engine-control software to bypass emissions tests for diesel cars. Granting an outsider access to the carmaker’s inner circles and processes is an unfamiliar experience for VW, a company run largely by corporate veterans where a small group of power-players keeps a tight grip on strategic decisions.

Thompson’s monitoring will stretch across all 12 auto brands, but that might eventually be narrowed down, he said at the press briefing after attending a gathering of VW Wolfsburg car plant workers and an earlier, five-day “boot camp” with managers to gain an overview of the company.

Full Access

“We will have access to all of Volkswagen’s outside counsel” and data, though there could be some restrictions related to ongoing probes, Thompson said. Volkswagen hasn’t published the full findings of an investigation by U.S. law firm Jones Day, though the DOJ included some portions in a statement of facts for the settlement signed in January.

VW’s corporate governance has been a longstanding concern among investors and analysts. Outsiders’ struggles for influence were highlighted by the abrupt departure in January of Volkswagen’s legal and compliance chief Christine Hohmann-Dennhardt after less than a year on the job.

The carmaker’s compliance systems have faced scrutiny ever since the revelation about 10 years ago that worker representatives had visited brothels at the company’s expense. Volkswagen’s admission in September 2015 that it rigged as many as 11 million diesel engines to cheat on emissions tests, after initial denials to U.S. authorities of any wrongdoing, provided new ammunition to critics. Fallout continues to come to light, with the Audi luxury brand and Porsche SE, Volkswagen’s majority owner, the subject of widening prosecutors’ probes in Germany.

Thompson will be tasked with certifying that VW’s compliance program is able to detect something like the diesel scandal and prevent it from happening again. He picked Jonny Frank from StoneTurn Group, a forensic-accounting firm, as deputy for the VW mandate. Frank also acts as a monitor at Deutsche Bank AG.

Thompson joined U.S. law firm Finch McCranie LLP in 2015 after serving as U.S. deputy attorney general between 2001 and 2003. He’s currently a professor for corporate and business law at the University of Georgia.

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE