Crime and Profits? The Story of the Most Profitable Punishment in American History

(Source) In 2015, Volkswagen admitted to engineering and rigging devices used on their diesel vehicles to skirt compliance with emissions testing and knowingly fouled the air by producing cars that were far out of compliance with emissions standards. Volkswagen’s befouling plot released 46,000 tons of nitrogen oxides, linked to an estimated 100+ deaths from the increased pollution. The repercussions for Volkswagen included pleading guilty to three criminal convictions resulting in a court-ordered criminal fine of $2.8 billion. The criminal fine was the largest ever imposed by the U.S. on an automaker. However, the criminal charges originated from the company’s acts of deceit and conspiracy against the U.S.; the charges did not stem from enforcement of the Clean Air Act (CAA) against polluters who knowingly violate it. The Act exempted “mobile source violators,” i.e., carmakers, from criminal culpability for emissions violations. In addition, thirteen executives and employees of the company and its subsidiaries faced criminal charges, with several receiving prison sentences. In the end, the company has had to pay more than $34 billion in fines and settlements, including the costs for buybacks and modifications of their rigged diesel cars. However, arguably, the most significant sanction against Volkswagen has been the [read more]