Volkswagen Executive Faces Jail Time After Guilty Plea (arstechnica.com)

An anonymous reader quotes Ars Technica: A former Volkswagen executive has pleaded guilty to two charges related to the company's diesel emissions scandal. He is the second VW Group employee to do so, following retired engineer James Liang pleading guilty last summer. The VW Group executive, Oliver Schmidt, was based outside of Detroit and was in charge of emissions compliance for Volkswagen in the years before the company was caught using illegal software to cheat on federal emissions tests.

Schmidt, a German citizen who was 48 when he was arrested in Miami in January on vacation, was originally charged with 11 felony counts. In accepting a plea deal from US federal officials, Schmidt will only plead guilty to two charges: conspiracy to defraud the US government and violate the Clean Air Act, and making a false statement under the Clean Air Act. Schmidt will be sentenced in December. He could face up to seven years in prison, as well as fines from $40,000 to $400,000, according to the plea agreement. After that, Schmidt could also be required to serve four years of supervised release.

Comments

An even better punishment..

[SilverBlade2k]

A better punishment would be to punish the company as a whole:

- Force Volkswagaon to buy back all of the affected vehicles - at their original value, regardless of how old it is.
- Give every customer of an effected car, at minimum, $5000 extra for the inconvenience and deception.
- Every new car off the assembly line must an electric vehicle AND to be sold at the same price as a similar gas powered car. Even if it is at a loss.

Make the company bleed out a little bit. Nothing makes a company act straight other than the threat of losing money.

Re:An even better punishment..

[Anonymous Coward]

I don't want an EV.

Re:An even better punishment..

[drinkypoo]

I don't want an EV.

All VWs will be electrified soon, and lots of them will be EVs. VW is spending a bunch of money on a charging network in North America, which should boost EV adoption considerably. Of course, it doesn't take big numbers to get a big increase in the market right now. It's not their choice, but they're going to do it anyway.

It's going to be hard to find a car which is not a mild hybrid soon, because the cost difference is diminishing and the emissions benefits are substantial.

Re:An even better punishment..

[Anonymous Coward]

Make the company bleed out a little bit. Nothing makes a company act straight other than the threat of losing money.

Don't make me laugh. Companies get fined all the time, and it doesn't change behavior. They go back to doing illegal things. It's largely because companies don't act, individuals do. When punished the individuals who acted don't lose money, the stockholders do.

If all that can happen is maybe you lose your job (and normally not even that) if you get caught, no big deal. Most of the time people don't even get caught, so it's worth the gamble. But jail is another thing altogether. Suddenly you're taking the risk of going to the Big House instead of just losing a job, and just find another. You can't replace that time you lost in the slammer.

Re:An even better punishment..

[PolygamousRanchKid]

I don't want an EV.

In Germany . . . owning an EV will turn out to be a major pain in the ass . . . where do you charge it . . . ?

Lots of folks here live in rented apartments, where charging facilities just don't plain exist . . .

Re:An even better punishment..

[PoopJuggler]

Nobody wanted horseless carriages a while back either, but yet here we are.

Re: An even better punishment..

[dougdonovan]

im glad i dont own vw stock.

Re:An even better punishment..

[PolygamousRanchKid]

Nobody wanted horseless carriages a while back either, but yet here we are.

Where ever you go . . . there you are!"

Google that quote, to see where it came from!

Re:An even better punishment..

[hord]

So you want to solve an emissions scandle by digging up more metal, oil, and rare earths? Every study I've ever read says that whatever you save by switching to an EV is completely overshadowed by the industrial waste that was produced in making it. I mean, I guess if we throw everything away once it's probably ok. I hope we don't have to throw all of gen-2 away...

Re:An even better punishment..

[drinkypoo]

EVs will continue to remain relatively niche vehicles for some years, but it will very soon be difficult to find a car which is not some kind of hybrid. And while I am constantly harping on about the impending proliferation of mild hybrids, you can expect to see them all become more common. On the other hand, there are actually large markets full of people who put down just about the right number of miles who are prime for EV ownership: commuters. In the USA they are mostly Californians, but there are also a bunch of Texans. These people are commuting so that they can live in a house, and since they live in a house, they have a place to park. EV ranges are now good enough to actually be used for a commute. It's just going to get more and more expensive to drive anything else, to the point where few people will try. Fuel prices are so endlessly manipulable.

Re:An even better punishment..

[ShanghaiBill]

where do you charge it . . . ?

Public parking spaces with chargers already exist and are becoming more common. There are several within a 5 minute walk of my home. There are chargers at my local Walmart, Costco, and Safeway. My employer also provides a few EV parking spaces, and will be installing more.

Re: An even better punishment..

[ShanghaiBill]

im glad i dont own vw stock.

This may be a good time to buy at the bottom.

Re: An even better punishment..

[Anonymous Coward]

It's largely because companies don't act, individuals do. When punished the individuals who acted don't lose money, the stockholders do.

Re:An even better punishment..

[ShanghaiBill]

Putting a bunch of cars in landfills doesn't help the environment.

They won't go in landfills. They will be exported to countries with lower pollution standards. Even if they were scrapped, they would not go to landfills. Cars are 90% recyclable.

Re:An even better punishment..

[PolygamousRanchKid]

. . . until I can not plug it in to a socket to charge it . . . it ain't gonna work . . .

Give me EV charging stations, like gas stations, and I will be with you!

Re:An even better punishment..

[ShanghaiBill]

Every study I've ever read says ...

Vacuously true?

Re:An even better punishment..

[drinkypoo]

In probably 5-8 years, all vehicle will be self-driving EVs (and some hybrids).

The average age of the American fleet is over eleven years and rising. (The average age of cars in the EU is almost eleven years, as well.) The average car is somewhere around $33,000, and rising. Employment is falling worldwide, with a number of nations in full-on crisis and more on the way. Even if we had self-driving EVs on sale tomorrow, and even banned selling anything else new (you can't reasonably ban used sales) it would still take minimum ten and more like twenty years for them to proliferate.

Re:An even better punishment..

[whoever57]

They won't go in landfills. They will be exported to countries with lower pollution standards.

In the USA, the settlement with VW prohibits sending the cars to other countries with lax standards.

Re:An even better punishment..

[Rei]

And in fact, that is what's happening. Charging infrastructure is expanding exponentially. It's really amazing how quickly it's spreading. I think most people don't even notice it because they never look for it. But pull up, say, Plugshare and look at your city. Then compare to a year ago, or two.

Beyond destination chargers (at homes, at workplaces, at stores, curbside, etc), the current semi-global fast charging network (Tesla's - I don't consider CCS or CHAdeMO to be "fast charging") is set to triple by the end of next year. And it's apparently going to be joined by another one - Volkswagen's, which looks to also be a true fast charge network (150-350kW).

BTW, concerning Germany: they're probably the most backwards place in Europe in terms of EV charging infrastructure. But they're playing catch-up.

Re:An even better punishment..

[Ol Olsoc]

A better punishment would be to punish the company as a whole:

Nah - if a few CEO's get to spend some time in jail, and if others know this can happen to them, it won't take long at all for companies to have wonderful ethics.

Otherwise, he just gets to shrug his shoulders and lament about that custodian that "caused" the whole problem.

I'd love to see one of these turds get a life sentence. Problem cured in a minute.

Re:An even better punishment..

[Ol Olsoc]

I don't want an EV.

Well for god's sake, don't buy one!

Re:An even better punishment..

[Ol Olsoc]

I don't want an EV.

In Germany . . . owning an EV will turn out to be a major pain in the ass . . . where do you charge it . . . ?

Lots of folks here live in rented apartments, where charging facilities just don't plain exist . . .

Truly an insurmountable problem with no solutions possible.

Re:An even better punishment..

[Rei]

I have no interest in a charging network. I'm not going to sit around all day, every couple of days charging my car.

You have a strange impression of what charging entails. Fast charging today is half an hour to 80%. Next generation chargers - higher power, and with offboard sources of chilled coolant rather than having cars cool themselves with ambient-temperature coolant - will bring this down. As will next-generation batteries, with higher ion mobility. And unless you drive great distances every day, it's not "every couple days". Even the shortest range Tesla is 220 miles highway range.
  More city range.

In any event electric cars cost way more than equivalent ICE cars

Not against others in their class. The Tesla Model 3, for example, is designed to compete with the BMW 3-series and similar. Comparing base models, it's faster, more agile, more passenger room, more storage room, more standard features (bringing the 3-Series up to the standard features of the Model 3 requires thousands of dollars of options), and cheaper, without accounting for tax credits and the money saved on maintenance and fuel. And it's received rave reviews from virtually every journalist that test drove it thusfar.

They're not targeting a Yaris, they're targeting BMW, Audi and Mercedes. Toyota, Honda, etc are also on their hitlist, but several years down the road (Model 3 is a midrange sedan, while the next release will be Model Y, a midrange crossover, and a Tesla semi. After that they're looking at a pickup, a low-end sedan, and a second generation Roadster)

your electricity bill will cost way more

Driving an EV is vastly cheaper than driving a gasoline car. Do the math yourself - the Model S charges at about 1/4 kWh per highway mile (less per city mile). It of course depends on your local gas and electricity prices; even where electricity is expensive and gas is cheap, it's cheaper to drive an EV; in places where I am where electricity is average priced but gasoline very expensive, it costs 1/10th as much to drive an EV.

and you'll be stuck needing to buy batteries (or new car) much sooner than you'd need to replace major components on an ICE.

Tesla Model 3 has a 8 year / 100k (or 120k for the long-range) mile warranty on the battery pack. Model S and X have the same 8 years but unlimited mileage. And for the record, the batteries don't just die - the rate of degradation slows over time.

When there is a breakthrough new battery technology

Not needed - the future is now. Heck, even the old weight canard is gone - a Tesla Model 3 weighs approximately the same as a BMW 3-Series.

Re:An even better punishment..

[Rei]

Every study I've ever read says

And in what journal were those zero studies published? Because I've read plenty of actual, peer-reviewed studies, which say exactly the opposite. Which should be patently obvious to anyone who takes half a second to think about it. A typical gasoline car burns its weight in gasoline every year, up in smoke. And the mass of a car gets largely recycled at end-of-life. The more valuable the material in a car, the more likely it is to be recycled.

Oh, and as for the whole "rare earths" canard? Teslas, for example, don't use rare earths. Neither in the batteries nor in the motors. They use AC induction motors - that is, aluminum and copper. The battery cell cathodes are varying combination of nickel, cobalt, aluminum and oxygen; the anodes carbon with optional silicon; there's thin separator membranes and organic electrolytes; and of course, lithium which intercalates in the anode and cathode, of which most is mined in the least environmentally destructive manner imaginable (from drying salar brine - even more to the point, many of the salars flood annually and reclaim the drying ponds every year).

More to the point... nor are rare earths actually rare. Want to know something that's actually rare? Precious metals in your catalytic converter and spark plugs. They don't use much, of course - but they're mined from ores in ppb quantities, so you have to move a lot of ore to get those small quantities.

Oh, and by the way, if you want to raise an issue of copper usage (you can also use aluminum, but we'll ignore that)... ironically Tesla's vehicles may be using less copper than gasoline vehicles. One thing Tesla has been very aggressive about is reducing the wiring harness, which has grown into huge, heavy complicated mass on conventional vehicles. The Model S's was 3km (the average car today is 4km). The Model 3's wiring harness is 1,5km. And they're looking to get the Model Y down to a tiny 100m, and raise the voltage, which means less copper. The thing will weigh almost nothing.

Re:An even better punishment..

[fluffernutter]

Oh and Walmart, Costco and Safeway don't mind if the fella who lives in the apartment down the street parks there and charges? Generally they expect a little business for the right to charge. Now you're talking about plugging in there and then feeling responsible to use the business that you may not normally used. No thanks, I'll take the gas station across the street for five minutes, pay, and done.

Re:An even better punishment..

[ShanghaiBill]

Oh and Walmart, Costco and Safeway don't mind if the fella who lives in the apartment down the street parks there and charges?

The chargers are not free. You plug in, a sensor identifies your car, and your account is debited for the amount of energy you draw.

Re:An even better punishment..

[rtb61]

The only way you can pursue those cases up the chain of command is by giving ones lower in the chain extended custodial sentences if they do no cooperate in pursuing those up the chain, not to have their sentence eliminated, just reduced. It really is kind of unfair to penalised investors who have zero involvement in the bonus pumping scam but you also don't want companies full of pigeons who do nothing but take legal blame for everything that goes wrong, whilst major investors pull the strings, you really want to get them as well.

Re:An even better punishment..

[Maxo-Texas]

Real world data is showing a likely 350,000 mile lifespan for tesla batteries.

And then they can still be used for other uses (like a home powerbank).

Re:An even better punishment..

[Maxo-Texas]

I only have a 12 gallon tank and it's not possible for me to get in and out of a gas station in under 10 minutes.

Also, new charging technology is in production that brings a 25% charge down to 5 minutes and an 80% charge down to 15 minutes.

As the percentage of EV's increase and ICE's decrease, gasoline will become more expensive (because the overhead remains the same and less gallons are produced, delivered, and pumped).

Automobiles replaced horses extremely quickly. It's likely EV's will similarly hit a tipping point.

Re:An even better punishment..

[eclectro]

Make the company bleed out a little bit. Nothing makes a company act straight other than the threat of losing money.

No. This is useless and false, and does nothing to deter future crimes. Megacompanies think nothing of paying a slap-on-the-wrist fine as they merely see it as the cost of doing business. The deal as it stands is much better as long as the executives actually go to PMIA prison

This is the first time (in a very, very long while) that I have seen a notable example of a white collar criminal doing hard time. The reason why it's so important is that boardroom executives need to see that there is a very real consequence of them going to jail for being criminals and knowingly breaking the law.

The huge problem with the 2007 banking collapse is we didn't see a single banker do hard time. Instead, we saw large fines that were written off by the companies that they worked for and it was given nary a thought. The message is out, you can go ahead and break the law, and get away with it by having your company pick up the tab.

Until now, that is. Though it is a "plea deal" and not a trial, I consider this groundbreaking now not unlike the arrival of EV vehicles even.

If we saw more white collar jail-time prosecution of crime on Wall Street our financial system would be much more stable and better.

Re:An even better punishment..

[thegarbz]

at their original value

That makes no sense. Cars have changed hands. Cars have been written off. Cars have had all their value extracted from over use. Some cars have stayed in garages and are still at the original value.

Your proposal unfairly distributes fines to people unequally. Better to just fine them a fixed fee that goes to the government and benefits the people who were affected (drivers of VWs are just a small portion of the people affected by pollution of VWs).

AND to be sold at the same price as a similar gas powered car. Even if it is at a loss.

Not legal. Not even against a company you don't like.

Re:An even better punishment..

[mspohr]

California has been able to force VW to do much of your agenda.
- Forced VW to buy back the diesel cars at pre-scandal prices
- Forced VW to pay extra compensation to owners
- Forced VW to spend $800 million dollars to build an EV charging network in California
VW will be making EVs to use the charging network.
https://www.arb.ca.gov/msprog/...

Re:An even better punishment..

[maestroX]

• Give every customer of an effected car, at minimum, $5000 extra for the inconvenience and deception.
• Every new car off the assembly line must an electric vehicle AND to be sold at the same price as a similar gas powered car. Even if it is at a loss.

That's ridiculous, it will not bleed the company, it will bankrupt it. Moreover, all industry will pack up and move to other countries. You didn't think VW is the only one, did you?

The top of the executives needs to be jailed hard time, Germany knows a strong hierarchy in work, the top is responsible.

Meanwhile, politics need to take that head out off their arse and reassess their simple-minded drive to lower CO2 at all costs (NOx) without planning and assisting for a total revision of the infrastructure, supporting electric; but that's tricky if you want to be re-elected.

Right now we have the worst combination of politics and corporation, both knew it was fishy but didn't want to know. It took power play to get this train moving, just don't be naive to think it started because of concern of health issues.

Re:An even better punishment..

[Antique Geekmeister]

> Charging infrastructure is expanding exponentially

I'm afraid that all growth curves can seem exponential when they start. There are some very real limits with existing power grids that will come into play if and as such vehicles become commonplace. The normal charging power of a current Tesla vehicle is about 7 kW. According to https://www.eia.gov/tools/faqs..., a typical US home in 2015 used about 901 kWh / month. That averages out to a home power consumption of roughly 1.2 kW. Increasing the precentage of electrical vehicle users to any significant level is going to create a _tremendous_ burden on the electrical infrastructure.

A well built, robust, stable system can absorb a few exceptional users without too much difficulty. But it cannot absorb a quintupling of peak consumption without a great deal of re-engineering.

Re:An even better punishment..

[drinkypoo]

It really is kind of unfair to penalised investors who have zero involvement in the bonus pumping scam

Nope. The investors supply the economic power. They are responsible, so it's absolutely fair. Don't like it? The simple remedy is to make an effort to invest your money ethically. Just handing it to big corporations doesn't fit the bill there.

Re:An even better punishment..

[drinkypoo]

About 1/3 of the average car's lifetime energy consumption is spent in production. For EVs, that's probably as high as 1/2. Maybe Tesla can get it back down to 1/3, but they're not going to get far beyond that.

Re:An even better punishment..

[drinkypoo]

The normal charging power of a current Tesla vehicle is about 7 kW. According to https://www.eia.gov/tools/faqs..., a typical US home in 2015 used about 901 kWh / month. That averages out to a home power consumption of roughly 1.2 kW. Increasing the precentage of electrical vehicle users to any significant level is going to create a _tremendous_ burden on the electrical infrastructure.

It won't, because the home power consumption doesn't average out. It has peaks and valleys, and one of the valleys is at night, when people aren't using their cars. You can fill in the valley with quite a number of EVs; you can get well up over 10% penetration without making any changes to the grid.

We couldn't replace 100% of our transportation needs with electric without upgrading the grid, but so what? The installed base can more than triple before we run into capacity problems. Meanwhile, we're going to need grid upgrades to make the most of wind power anyway.

Re:An even better punishment..

[Ol Olsoc]

It really is kind of unfair to penalised investors who have zero involvement in the bonus pumping scam

Nope. The investors supply the economic power. They are responsible, so it's absolutely fair. Don't like it? The simple remedy is to make an effort to invest your money ethically. Just handing it to big corporations doesn't fit the bill there.

Exactly. We are reminded on a daily basis that corporations are amoral, and geared toward making profit, and nothing else. That sounds a lot like a recipe for selling heroin and cocaine, and murdering your competition. Servicing the stockholders, you know. And dare I mention that we live in an age where the stockholders can even be serviced nicely when the fine doesn't approach the profit? Cost of doing business, perhaps.

But let's back away from that slippery but illustrative slope for a moment.

If the janitor gets caught stealing 5 grand worth of toilet paper, of course, the janitor should be fired, perhaps even prosecuted. That's pretty simple.

But when you have a systemic and obvious fraud that blatantly and purposely breaks multiple laws, and one that demands a lot of coordination to pull off, we're in a whole new regime.

So perhaps honesty, morals, and ethics on the part of the people at the top is a good idea. Since they have the power, and can enforce it, and are being paid a very comfortable salary, some responsibility is in order.

Nothing cures a problem like making it the problem of the person(s) who have the power to fix the problem.

Re:An even better punishment..

[Type44Q]

Every new car off the assembly line must an electric vehicle

Of course, because dictating what kind of new Volkswagen customers are allowed to purchase should definitely be part of the "company's punishment."

Hint: the "company" is a fictional entity created for wealth-sharing purposes; the only thing worth doing is to look past it and give the corporate veil a proper fucking piercing; those actually responsible (not this patsy) need an ass-fucking Fed-style.

Re:An even better punishment..

[Rei]

1. It's not just a curve based on past datapoints; it's also a curve based on future datapoints. Tesla is in the middle of doubling their number of chargers over the course of this year. We're talking ongoing permitting, construction, etc. By the end of next year they'll be at threefold what they are today. VW is adding in a massive, brand new network. Everyone is unrolling massive charging station deployments - not just with past datapoints, but ongoing construction and future plans. And of course, this is only expected, as the rate of EV production expansion and order reservations has also grown exponentially, which represents future consumption.

2. There have been lots of studies on this fact, and the simple fact is, the grid has no problem adding in EV charging. Take the US, for example. Every region in the US already has enough spare capacity to allow for EV charging (which occurs primarily at night, where power consumption is much lower), except for the Pacific Northwest. Local grids need improved capacity for a full conversion to EVs; however, a full conversion is something that takes place over decades, not overnight, and thus over a timescale at which grid improvements normally occur.

3. You did your math wrong because for some bizarre reason you assume that an EV spends 24/7 charging at 7kW. Which would mean that everyone is consuming 168kWh per day, meaning that they're driving 672 miles per day. Every day. In reality, the average Model 3 will consume under 250kWh per month.

Re:An even better punishment..

[LoztInSpace]

Correct. Even the plugs are different. I have no idea how anyone thought this could be an option. Tsh!

Re:An even better punishment..

[Rei]

Simply not true. Here's one of the most recent studies on the topic. Check out figure 5a. The blue and light purple at the bottom of the graph represent energy consumption in usage. The colours above that represent energy consumption in production. Of those colours on EVs, the light blue at the top only applies to small-volume battery production; for high volume battery production (e.g. gigafactories), only the green and dark purple apply. Note how similar they are to ICE energy consumption, and how small of a fraction of the ICE's total energy they represent.

Re: An even better punishment..

[Rei]

If you drive 60 miles a day, why do you need 400? I'm not following your logic. Every day your vehicle starts with a full "tank". The *short* range Model 3 would only use a quarter of its pack for your daily drive - you'd get home 3/4ths full (and that's assuming that you're driving on the highest speed limit roads). And please tell me you don't drive 400 miles without stops - that's not safe. Regardless of your vehicle type. Attention begins to wane after a couple hours behind the wheel.

As for your area, what's already built, there's 2 CHAdeMOs in Rosarito (at La Paloma on the south side), which a Model 3 will charge at about 172 mph on. Beyond that, if we don't count crossing the border, there's 2 other chargers in Rosarito, 7 in Tijuana, 1 in Tecate, 4 in Mexicali, 4 in Ensenada, and 14 on the roads north of Ensenada. That's what's already there, not what's coming in the next couple years. And if you want to count crossing the border there's a huge number, including 260mph/340mph Tesla superchargers and lots of CHAdeMO and CCS chargers. For example, there's 2 CHAdeMOs and CCS right at the mall just across the Tijuana River. San Diego, El Centro and Yuma all have superchargers, and there's 3 more under construction right now in San Diego. Mexico appears to be a new target of Tesla's supercharger network - there's only five in the country right now, in the area around Mexico City, but by the end of the year they're going to have finished ten more, forming a network running from Texas to Mexico City; given this, their plans to triple by the end of next year will almost certainly involve a big effort in the west as well.

Re:An even better punishment..

[Ol Olsoc]

Correct. Even the plugs are different. I have no idea how anyone thought this could be an option. Tsh!

And dropping my sarcasm, for the fellow that thought this would be a big pain in the ass, even here in the US, where almost everything is too hard these days, what is happening is businesses and hotels are installing charge ports. The concept is you don't draw the batteries down so far that they need a full recharge. When you are in town, you have a charging port at home. You might even have a solar powered charger. Then you do your daily travels, maybe charge it some at work, come home and finish a charge overnight. Only inconvenient if a person finds charging a smartphone too much of a problem.

As more people start using EV's, you'll see charge ports showing up at parking meters. The concepts are already proven in Alaska where parking meters have outlets to run battery and block heaters in the winter. It won't happen overnight, but as demand increases, it will be met.

Re:An even better punishment..

[hashish]

No, this is not a better punishment as it punishes the shareholder not the perpetrator.

He'll walk . . .

[PolygamousRanchKid]

. . . jail is for poor folks . . . as every American Kid says during the morning roll call:

With freedom and justice . . . for the rich . . .

www.al-awa2el.com

[MohamedOsama1718]

Ordered to take the fall?

[140Mandak262Jamuna]

He is probably the lowest level flunky who would still be high enough for PR spin. He will probably be well rewarded for protecting the higher ups who were all in the game.

It is a German company we are talking about. Their level of documentation and verification are phenomenal. Anyone who sold software to VW would know. They store all the results of all the prior use of the software that was used. They rerun the software after every version upgrade. And they demand every difference to be explained.

No way this diesel emission scandal is some handywork of some rogue group or division. Everyone from the very top knew, they approved and they monitored the deception from the get go.

Re:Ordered to take the fall?

[Roger W Moore]

He is probably the lowest level flunky who would still be high enough for PR spin.

Actually, it sounded more like he was the only one they could get their hands on quickly. I suspect that others may well be the subject of extradition requests or at least they are now going to have far more restricted travel itineraries since they will have to avoid everywhere which has a suitable extradition treaty...and that's assuming that local EU authorities don't end up throwing them in jail first for the same crime.

Put him with Pharma Bro

[PopeRatzo]

Any time a corporate executive is jailed, for whatever reason, it's good for everyone.

I subscribe to "broken windows theory" when it comes to corporate crime. If you let one get away with even a minor crime, the rest will think it's OK to do something a little bigger, until we end up with what we've got now.

Better to make an example of a few executives. Don't put them in any country club prison, either. Use public stocks, heads on pikes, I don't care. Just let them know they are not the masters of the universe.

Re:Put him with Pharma Bro

[PopeRatzo]

If you don't rehabilitate them, lumping them together like that makes them learn how to be even worse criminals learning how to do greater crimes.

Executive white-collar criminals cannot be rehabilitated. Look it up.

Re:Put him with Pharma Bro

[PopeRatzo]

Why? I mean, the namesake theory is discredited, so you're already starting off on the wrong foot here...

It's discredited when it comes to neighborhoods. It's not been discredited when it comes to corporate executives. Lock them up.

He might actually get some

[rsilvergun]

He committed the most grievous of sins, he cost everybody a lot of money when he got caught.

Shoulda Worked in Finance Instead...

[BarneyGuarder]

Those guys never do time

Re:Shoulda Worked in Finance Instead...

[Squirmy McPhee]

Those guys never do time

I very nearly said the same thing in my comment....

Re:Shoulda Worked in Finance Instead...

[CanadianMacFan]

Or committed a bigger crime. Maybe it's not finance but just the magnitude of their crimes that lets them get away with it.

Of course it could just be the whole German company thing. If it was Ford or GM would the US government really be going after the execs with as much energy?

Re:Shoulda Worked in Finance Instead...

[fafalone]

It wasn't that; VW screwed with the government, THAT is why they are being punished so harshly. Had they just cheated, bankrupted, lied to, and ripped off their customers by the millions, nobody would be going to jail and the worst outcome would be a tiny fine.

Re:Making it easy to profile

[hord]

In Miami... probably by the US and I don't see anything about being extradited. So it is we in the Americas that are the savages?

I can agree with holding executives accountable. Why only one, though? There should be a few more plus some board members and a whole chain of command.

Re:Making it easy to profile

[edjs]

The US indicted 6 VW execs for breaking US law. Schmidt had the misfortune of being in the US when the indictments came down. Presumably the other 5 are avoiding getting anywhere near US soil.

Oh come on...

[WolfgangVL]

This guy is not going to prison. He's gonna pay a big fine. That's all.

If on the off chance that he does go to prison, he's gonna go to country-club prison and probably collect his entire salary as hush money when he gets out anyway.

If any of this was real, it would be for more than the one guy who happened to be on vacation in the US when they decided to make an example.

I don't buy this theater for a second.

Re:Oh come on...

[Snotnose]

If on the off chance that he does go to prison, he's gonna go to country-club prison and probably collect his entire salary as hush money when he gets out anyway.

Country club prison is still prison. This guy will lose the lifestyle he's used to. He'll eat shitty food when told to. He'll sleep when told to. He'll wear shitty clothes, and let outside whenever the guards decide he can go outside. Library privileges will be limited. TV is limited. Phone calls are limited. Internet? Yeah, about that. Cell phone? More prison time if caught.

If you live in the ghetto country club prison may be no big deal. Make a 6-7 figure salary? I'm pretty sure it sux ass.

Re:Oh come on...

[drinkypoo]

If you live in the ghetto country club prison may be no big deal. Make a 6-7 figure salary? I'm pretty sure it sux ass.

No, the ass sucking is going on in the regular prison system. And that illustrates why we should only have one prison system, not a special cushy one for white collar criminals. A weak person who is poor gets thrown into the grinder with all the other poor people. A weak person who is rich doesn't. So what's the incentive for the rich to stop producing prisons which are horrible torture pits? None. Further, white collar criminals are more likely to get away without prison time at all than the hard-working criminal, so we're putting more innocent people into the worse kind of prison, too.

We will never institute prison reform as long as rich people have their own cushy prisons. The slavery and torture will continue in our names.

Amazing

[Squirmy McPhee]

Amazing to me that TWO Volkswagen execs have been found criminally liable for this, and only one exec from ALL OF THE BANKS was found criminally liable for any of the fallout of the 2008 financial crisis. Other commenters are saying that they're going to jail because they cost people money, but what Volkswagen cost people is peanuts compared to what bankers cost people, so that doesn't really square with me.

Re:Amazing

[Pinky's Brain]

That's cute, you think peons are people.

The VW clusterfuck cost the rich money, it came too sudden before they could spin most of it off on pension funds and without any bailouts to boot.

Re:Amazing

[Frank Burly]

The great recession cost a lot of rich people a lot of money in a very direct way.

But it is tough to prove that someone had criminal intent when they did their job shitily.

C-Suite to underling: make sure slicing and dicing mortgages distributes risk evenly;
--> underling to peon: give me more volume;
----> peon to sales team: volume is all that matters.

This can done with or without a nudge and a wink, but the result will be the same.

"Ladies and gentlemen of the jury, the evidence will show that Bob Peon had criminal intent when he did a shit job of underwriting mortgages, and as a result, investment firms you've never heard of lost lots of money causing a liquidity crisis that led to the great recession, which de-employed enough of you to show up for jury duty . . . etc."

It's a tough sell

Re:Amazing

[thegarbz]

The VW clusterfuck cost the rich money,

What rich person would drive a VW? Looks like a common person car in pretty much the entire western world to me.

Re:Amazing

[drinkypoo]

Don't be amazed. Volkswagen is not an American company, let alone an American bank. Add to that the mediapathic nature of their crimes in a world which is beginning to finally give a crap about air pollution — think of the babies' lungs and so on — and it's easy to see why it's easier to punish some VW execs than some American bankers. The average American can't even comprehend the intricacies of the bank bailout, but anyone can understand that more diesel emissions means a negative health impact.

Those of us who are fond of diesels are also pretty grumpy about diesel cheating, because it makes us look like assholes. Anyone want to buy a 1982 300SD?

The only appropriate punishment would be...

[ffkom]

... to let the responsible VW executives breathe the lovely fumes from their oh-so-clean Diesels. I'm sure they could modify some VW Diesel for this.

Not much better and not helping car owners.

[jbn-o]

Those are the kind of things that won't make a company change its practices, only retreat further into finding new ways to hide cheating software while simultaneously not helping the people who get cars (VW was hardly the only car manufacturer to engage in this cheating).

Freeing the car software by distributing complete source code and build/install instructions under a free software license plus making cars that use the same or compatible software would help the car owner far more. This is entirely reasonable to demand on its own sake as an affected vehicle owner and precisely because this case highlights the unjust power over everyone's need to breathe cleaner air. As a minor practical matter, car owners who aren't so technical could take a copy of the software to someone they trust for inspection, modification, and reinstallation (just as car owners take their cars to garages, detail cleaners, tire shops, and any other specialist firm to get work done). It's worth noting that my call is not a call for "open source" or "opening" anything. The open source development methodology is quite content to throw aside its own message if that development methodology gets in the way of business desires for control over the user (as is the heart of the case both in this scandal and in this discussion thread). The older free software social movement has the right take on things: demand respect for users' software freedom to liberate users from the control of proprietary software.

Software freedom (respecting a computer user's freedoms to run, share, and modify software at any time for any reason even commercially) is valuable for its own sake and the car manufacturers know it. That's why they're willing to pay some money or send a small number of people to jail now. Those steps protect their ability to cheat again leveraging the power of proprietary software (user-subjugating software) when they think they can get away with it.

Re:Not much better and not helping car owners.

[drinkypoo]

Freeing the car software by distributing complete source code and build/install instructions under a free software license plus making cars that use the same or compatible software would help the car owner far more.

This begs the question, will a car user actually derive more benefit from open source than they would from strong emissions standards? And the answer is obviously a resounding what the fuck are you, insane? The average person not only doesn't give a shit if they poison their neighbor, but also doesn't know which end of a wrench is which. Open source cars would do them zero good, since the cost of an Alldata subscription is a tiny portion of the costs of an automotive repair shop.

Software freedom (respecting a computer user's freedoms to run, share, and modify software at any time for any reason even commercially) is valuable for its own sake and the car manufacturers know it. That's why they're willing to pay some money or send a small number of people to jail now. Those steps protect their ability to cheat again leveraging the power of proprietary software (user-subjugating software) when they think they can get away with it.

The car companies are not sending someone to jail. The courts are doing that. It's not just German courts, either... although clearly it's not US federal courts, which give two shits about the environment, tops. The CARB, on the other hand, is holding VW's feet to the fire.

Re:Making it easy to profile

[rmdingler]

In Miami... probably by the US and I don't see anything about being extradited.

No, he came of his own volition.

So it is we in the Americas that are the savages?

I can't prove this a negative, but now I'm in the unenviable position of profiling two different nationalities in one thread.

I can agree with holding executives accountable. Why only one, though? There should be a few more plus some board members and a whole chain of command.

What are you implying? We're too advanced to accept sacrifices?

Re: Just deport him back to Germany

[wisnoskij]

Typically criminals are not granted citizenship as a matter of course. In fact he will lily be bared from visiting American (outside of a prison cell) again because of his criminal record.

Not better, far worse

[Roger W Moore]

Make the company bleed out a little bit. Nothing makes a company act straight other than the threat of losing money.

All this does is punish the shareholders and employees of the company who will lose their investment and their job respectively when the company goes bankrupt. The overwhelming majority of these people are not responsible for the crime committed. Putting the executives and employees who were responsible for the decision in jail as well as huge fines ($400k seems small given the likely salary of the executive) holds them accountable for the decisions which they are responsible for.

The more punishments like this the better because it will make executives realize that they cannot let their employees and shareholders take the hit for them if they commit crimes. The shareholders are still on the hook for the financial fallout of this crime which is reasonable because technically they are responsible for overseeing management (although the modern corporate structure makes that very hard for them to do in reality). If previous cases of corporate malfeasance had resulted in jail time and financially significant fines for the executives involved instead of just fining the company perhaps there would not have been a Volkswagen fraud case.

Re:Not better, far worse

[JaredOfEuropa]

This. And make sure those fines are paid out of their own pockets, not from the company coffers.

He can't have freedom and justice...

[Roger W Moore]

With freedom and justice . . . for the rich . . .

No matter how rich he is this guy cannot have both because justice requires denying him his freedom. Being rich just means is that he is more likely to get freedom over justice.

Bankers left room to wiggle

[Roger W Moore]

What Volkswagen did was really easy for almost everyone to understand and so very hard to wriggle out of. The problem with bankers is that the laws they violate are amazingly complex and very hard for juries to understand. This gives them a lot more wriggle room to weasel out of criminal charges.

Defence lawyers know this and use it to fiddle the jury pool. My uncle was a UK bank inspector and sometimes had to sit in on trials for bank managers he caught on the fiddle. He always used to claim that jury selection was often done by which newspaper the prospective jurors were carrying: "The Sun", "Daily Mail" or equivalent were fine but show up with "The Times" or, worse, "The Financial Times" they would hardly be in the room before some objection to them was found. After that, anyone with a university degree was the next target for removal because if you can't really understand the crime because it is so complex then there is bound to be reasonable doubt that someone committed it.

Re:Bankers left room to wiggle

[drinkypoo]

If you don't understand the complex case and the judge gives a strong hint what the verdict should be you can just go with that.

No, that's a lot of shit. In just about every trial the judge will start by lying to the jury. They tell them that if the facts are such and such, they must deliver such and such a verdict. But that's a blatant lie to their faces. A jury can produce any verdict they like, and they are explicitly protected against punishment for delivering it.

Repeat after me: FUCK NO I WON'T DO WHAT YOU TELL ME, MOTHERFUCKERS.

Judges do sometimes make it very clear what they think the jury should decide,

And that's not their goddamned job. Thumb on the wheel of justice.

what you propose is a death penalty

[aepervius]

Making the company bleed quite a bit is what happened up to now. What you propose would kill it. Now whether you want to kill it may be up your objective, but keep in mind that 99% of the people working there had nothing to do with the scandal, it was mostly executive and engineer. That is why personally I am against punishing companies that far, I am on the other hand for punishing executive and other people doing the illegal action that far, with possibly *consecutive* penalty rather than parallel.

here is the difference

[aepervius]

What the banks did back in 2008 was maybe malicious, unethical, stupid etc.... But not illegal - that is why we tryed to change the law with, laws that republican in their immense wisdom repelled (/sarcasm). On the other hand what VW did was downright illegal. That is the main difference.

Re:here is the difference

[Antique Geekmeister]

> What the banks did back in 2008 was maybe malicious, unethical, stupid etc.... But not illegal

If I may beg to differ: a great deal of it was in fact illegal. Much of the bank fraud and real estate fraud was based on pyramid schemes, where collections of debt or of real estate were sold off to newer, lower level members of the scheme to harvest profit for higher level members of the scheme, and especially for the top members of the scheme. Other members of the scheme profited from the transaction fees paid by the lower level members: those included the real estate agents who were flipping properties at wildly inflated properties, sold to buyers whose only hope of paying the mortgages was to engage in more and more successful "flips" of the next property.

In my view, there was very little mysterious about the debacle. Related, though somewhat mechanical, abuses led the "Black Monday" in 1987, which was apparently linked to the growth of programmed high speed trading and the almost inevitable positive feedback of such systems creating its own "pyramid scheme" of overvaluation.

I'm afraid that the Great Wall Street Crash of 1929 was very much the same sort of fraud based market disaster as the crash of 2008. The act of buying and selling stock, itself, became the primary source of profit and was itself the chosen investment of millions of citizens who were fraudulently misled about its limits and potential.

Corporations aren't monolithic entities

[Solandri]

with a singular hive mind. There are bad people at VW who want to cheat, and there are good people at VW who want to do the right thing. We could institute your punishment and basically force the company into bankruptcy, punishing the good people along with the bad. The good people would have to find new jobs at other companies, if they can, and suffer financial burden while they're searching. But more crucially the bad people would scatter to other companies, free to try to cheat again in other industries.

I'd rather do what's going on here - charge the bad people and fine them or jail them. Give the bad people still out there something to think about if they're considering cheating. Give the good people remaining at VW a chance to salvage the company and turn it into something good. The corporate veil should insulate individuals from liability against financial losses and unintentional harm. But if you knowingly commit a crime or cause the company to commit a crime while working at a corporation, you should personally be criminally liable.

Re: Just deport him back to Germany

[Vinegar Joe]

"Herr Schmidt.....das ist Bubba!"

Re: Just deport him back to Germany

[davester666]

No, he'll still be rich when he gets out, so America will welcome him into her bosom. The "criminal record" stuff is only fro the poor.

Re: Just deport him back to Germany

[Antique Geekmeister]

> The "criminal record" stuff is only fro the poor.

It also affects political activists who may wish to speak in the USA or visit to consult with other political activities which the current USA administration dislikes.

Re:Wait... they're jailing a 1%er?

[hey!]

Big companies don't have national loyalties. GM and Ford assisted the Nazis in their militarization efforts all the way until Pearl Harbor, and possibly beyond, while at the same time resisting converting their plants to US military production.

Companies are bigger than national borders now. They are difficult enough to police, but there isn't the political will because of the Achilles heel of modern democracy: money.

All the people involved in this, and they get just two? They could get a lot more if they wanted. This is not enough to deter companies from doing stuff like this. Nor is the supposed billions Volkswagen "pays out"; which is peanuts to both the US and Volkswagen, and includes a lot of money Volkswagen gets to spend on itself.

Clearly this is at best a token effort; they're throwing two people out of the hundred who must have been involved under the bus.

Abacus: Small Enough to Jail

[Guppy]

Those guys never do time

There was only one bank which ended up getting prosecuted for the '08 mortgage crisis. A tiny Chinatown family-owned bank that discovered one of their loan officers taking bribes and making fraudulent mortgage applications. The managers of the bank promptly reported him to regulators -- for which the managers were indicted, with the fraudulent loan officer becoming the star witness for the prosecution against the bank.

http://www.npr.org/2017/05/18/...
"As it happens, Abacus didn't deal in subprime. The Chinatown-based bank also didn't package its mortgages into the sort of financial instruments that made The Big Short's machinations so arcane. In fact, the bank had one of the lowest default rates in the country."

Some other articles on the prosecution of Abacus:
https://www.nytimes.com/2015/0...
https://www.washingtonpost.com...
https://www.nytimes.com/2015/1...